CHAPTER III

Section 2: Obligations with a Period

ART. 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when
the day comes. Obligations with a resolutory period take effect at once but terminate upon arrival of the day
certain. A day certain is understood to be that which must necessarily come, although it may not be known
when. If uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be
regulated by the rules of the preceding Section. (1125a)

Obligations with a period

· is an obligation whose demandability or extinguishment is subjected to the expiration of the term
which must necessarily come.
· There is a day certain when the obligation will arise or cease.

Period or Term
· is a future and certain event upon the arrival of which the obligation (or right) subject to it either
arises or is terminated.

Examples:
1. D is obliged to give his laptop to C on December 31, 2023
2. On January 1, 2023, D allowed C to use his laptop until December 31, 2023.

Day certain
· is that which must necessarily come although it may not be known when. (Art. 1193)

Example: Death of a person

If the obligation of D is to give C P5,000 when B dies, this is an obligation with a period.

Period Distinguished from Condition

A condition is an event that may or may not A period is an event that must necessarily come at a
happen. date known beforehand or at a time that cannot be
determined.
A condition may refer to the future or to a past A period always refers to the future.
event unknown to the parties.
A condition causes an obligation to arise or to A period merely fixes the time for the efficaciousness
cease. of an obligation.
A condition that depends upon the will of the A period that depends upon the will of the debtor
debtor which is suspensive shall annul the authorizes the court to fix its duration. (Art. 1197, par.
obligations. 2)

Kinds of period or term.

According to effect:

1. Ex die (suspensive period) – The obligation begins only from a day certain upon the arrival of the period.
Example: X promised to give P5,000 to Y on December 1, 2023.

2. In diem (Resolutory period) – The obligation is valid up to a certain day and terminates upon the arrival of
the period.

Example: X promised to give P100 per day to Y until December 1, 2023.

According to source:

1. Legal Period – is a period that is fixed by law.

2. Conventional or Voluntary Period – is a period that is fixed by the parties.
3. Judicial Period – is a period that is fixed by the court.

According to definiteness:

1. Definite period – when it is fixed, or it is known when it will come.

2. Indefinite period – when it is not fixed, or it is not known when it will come. Where the period is not
fixed but a period is intended, the courts are usually empowered by the law to fix the same.

PROBLEM

“I will pay you my debt when my means permit me to do so.”

Is this an obligation with a period or conditional obligation?

Answer:
 This is an obligation with a period.
 The remedy of the creditor is to ask the court to fix the period. (Art. 1180, 1197)
 Once the court has fixed the period, it may no longer change it as it becomes a part of the
agreement by the parties.

ART. 1194. In case of loss, deterioration or improvement of the thing before the arrival of the certain. The
rules in article 1189 shall be observed.

1. If The Thing Is Lost Without The Fault Of The Debtor, The Obligation Shall Be Extinguished
2. If The Thing Is Lost Through The Fault Of The Debtor, He Shall Be Obliged To Pay Damages; It Is
Understood That The Thing Is Lost When It Perishes, Or Goes Out Of Commerce, Or Disappears
In Such A Way That Its Existence Is Unknown Or It Cannot Be Recovered:
3. When The Thing Deteriorates Without The Fault Of The Debtor, The Impairment Is To Be Borne
By The Creditor;
4. If It Deteriorates Through The Fault Of The Debtor, The Creditor May Choose Between The
Rescission Of The Obligation And Its Fulfillment, With Indemnity For Damages In Either Case;
5. If The Thing Is Improved By Its Nature, Or By Time, The Improvement Shall Inure To The Benefit
Of The Creditor;
6. If It Is Improved At The Expense Of The Debtor, He Shall Have No Other Right Than That
Granted To The Usufructuary.
Illustration:
Michael agreed to sell his boat to Sola for half its purchase price upon Sola's graduation. Sola graduated on
time and with honors on March 30, 2016. However, Typhoon Hayan destroyed the boat the day before his
graduation. Michael's duty to sell his boat to Sola is invalid since the loss occurred before the specified date
and was caused by an unpredictable disaster.

ART. 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. (1126a)

Payment before the arrival period

 The creditor cannot unjustly enrich himself by retaining the things or money received before the
arrival of the period.

Debtor presumed aware of period

 The obligor may no longer recover the thing or money once the period has arrived but he can
recover the fruits or interests thereof from the date of premature performance to date of maturity of
the obligation.

Example:

Minka owes Ella P10,000 which was supposed to be paid on December 31 this year. By mistake, Minka paid
his obligation on December 31 last year. Assuming that today is June 30, Minka can recover the P10,000 plus
P600 which is the interest for one half year at the legal rate of 12% or a total of P10,600. But Minka cannot
recover, except the interest, if the debt had already matured. Neither can there be a right to recovery if Minka
had knowledge of the period. The theory under solutio indebiti obviously will not apply. (Art. 2154.) Minka
is deemed to have impliedly renounced the period.
Article 1196. Whenever in an obligation a period is designated, it is presumed to have been established for
the benefit of both the creditor and the debtor, unless from the tenor of the same or other circumstances it
should appear that the period has been established in favor of one or of the other. (1127)

Presumption as to benefit of period - Presumption when a period is designated. When a period is

designated in the performance of an obligation, it is presumed that the period is intended for the benefit of
both the creditor and debtor such as a loan with interest.

Exceptions to the general rule - The tenor of the obligation or the circumstances may, however, show that it
was the intention of the parties to constitute the period for the benefit of either the debtor or the creditor. The
benefit of the period may be the subject of express stipulation of the parties.
(1) Term is for the benefit of the debtor alone. - He cannot be compelled to pay prematurely, but he can, if
he desires, do so.
(2) Term is for the benefit of the creditor. - He may demand fulfillment even before the arrival of the term
but the debtor cannot require him to accept payment before the expiration of the stipulated period.
Example: D borrowed from C P10,000.00 payable on December 31 with the stipulation that D cannot make
payment before the lapse of the period but C may demand fulfillment even before the said date.
Here, C can demand payment at any time but D cannot shorten the one-year period without the consent of C.
Ordinarily, there must be a stipulation granting the benefit of the term to only the creditor.
Computation of term or period - The Administrative Code of 1987 defines legal periods as twelve calendar
months, a month of thirty days, a day of twenty-four hours, and a night from sunset to sunrise.

Article 1197.
If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a
period was intended, the courts may fix the duration thereof. The courts shall also fix the duration of the
period when it depends upon the will of the debtor. The courts will decide in each case what time frame the
parties may have likely anticipated given the facts. The period cannot be modified by the courts once it has
been established. (1128a).

Example:

Traffic borrowed a sum of money amounting to Php 50,000.00 from Steve. It was not stated in the contract
when Traffic will pay Steve. The court may fix a period because it can be inferred from its nature and
circumstances that a period was intended.

COURT GENERALLY WITHOUT POWER TO FIX A PERIOD

 refers to a judicial period as distinguished from the period fixed by the parties in their contract
which is known as contractual period.
 if the obligation does not state a period and no period is intended, the court is not authorized to fix a
period, the courts have no right to make contracts for the parties.

CONTRACTUAL PERIOD
 A regulated tenancy’s rental period, which is the duration before the tenancy’s expiration or
termination.

JUDICIAL PERIOD
 The window of opportunity for a judicial review challenge of the granting of a planning approval is
to be extended from the current 3-month window to 6-month window.
EXCEPTIONS TO THE GENERAL RULE
 There are two situations when the court may set the length of the time in accordance with Article
1197. All of the requirements outlined in Article 1197 are inextricably linked to one another. The
court does not automatically update or change an obligation when it sets its term. It merely upholds
or executes the parties’ intentions. It cannot create a time period at random.

LEGAL EFFECT WHERE SUSPENSIVE PERIOD/CONDITION DEPEND UPON WILL OF

DEBTOR:
(1) Although the duration is entirely up to the debtor’s discretion, the presence of the obligation is unaffected.
Only the performance with regard to time is up to the debtor’s free will.
(2) If the obligation is dependent solely on the debtor’s will, then the conditional obligation is avoided
because in that situation, the debtor’s will is actually what determines whether the obligation will be fulfilled.

Article 1198. The debtor shall lose every right to make use of the period:

Five cases:
(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or
security for the debt;
(2) When he does not furnish to the creditor the guaranties or securities which he has promised;
(3) When by his own acts he has impaired (damage) said guarantees or securities after their establishment,
and when through a fortuitous event they disappear, unless he immediately gives new ones equally
satisfactory;
(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period;
(5) When the debtor attempts to abscond. (1129)

When obligation can be demanded before the lapse of period.

The general rule is that the obligation is only demandable after the lapse of the period. However, in any of
the five (5) cases mentioned in Article 1198, the debtor shall lose every right to make use of the period, that
is, the period is disregarded and the obligation becomes pure and, therefore, immediately demandable. The
exceptions are based on the fact that the debtor might not be able to comply with his obligation.

(1) When the debtor becomes insolvent.

EXAMPLE:

D owes C P10,000.00 due and payable on December 20. If D becomes insolvent, say on September 10, C, can
demand immediate payment from D even before maturity unless D gives sufficient guaranty or security.
The insolvency in this case need not be judicially declared. It is sufficient that the assets of D are less than his
liabilities or D is unable to pay his debts as they mature.

Note that the insolvency of D must occur after the obligation has been contracted.

In a case, the statement of the Chairman of the Board of Directors of the mortgagor-corporation that it
was "without funds, neither does it expect to have any funds in the foreseeable future" was held as proof of its
insolvency.

(2) When debtor does not furnish guarantees or securities promised.

EXAMPLE: Suppose in the same example, D promised to mortgage his house to secure the debt. If he fails
to furnish said security as promised, he shall lose his right to the period.

(3) When guarantees or securities given have been impaired or have disappeared.

EXAMPLE: If the debt is secured by a mortgage on the house of D, but the house was burned through his
fault, the obligation also becomes demandable unless D gives a new security equally satisfactory.

In this case, the house need not be totally destroyed as it is sufficient that the security be impaired by the act
of D. But in case of a fortuitous event, it is required that the security must disappear. But if the security given
deteriorates in such a manner as to become illusory, it must be deemed to have disappeared or lost as
contemplated in paragraph 3.

If the debt is secured by a bond, the failure of D to renew the bond or replace it with an equivalent guarantee
upon its expiration will likewise give C the right to demand immediate payment.

(4) When debtor violates an undertaking.

EXAMPLE:
Now, suppose that C in the example agreed to the period in consideration of the promise of D to repair the
piano of C free of charge. The violation of this undertaking by D gives C the right to demand immediate
payment of the loan.

(5) When debtor attempts to abscond.

EXAMPLE:
Before the due date of the obligation, D (debtor) changed his address without informing C (creditor) and with
the intention of escaping from his obligation. This act of D is a sign of bad faith which results in the loss of
his right to the benefit of the period stipulated. Observe that a mere attempt or intent to abscond is sufficient.

SECTION 3: ALTERNATIVE OBLIGATION

Article 1199

Alternative Obligation- is one where the debtor is alternatively bound by different prestations but the
complete performance of one of them is sufficient to extinguish the obligation.
A facultative obligation refers to only one prestation agreed upon, but the obligor may render another in
substitution. For example, I will give you my phone but I may give you my laptop as a substitute. In this
obligation, only the phone is due, Hence, the lost of the laptop will not render the obligor liable. However, if
the substitution has been made, the laptop becomes due and demandable. The loss of the laptop will render
the obligor liable.

Compound obligation - two or more prestation.

Conjuctive obligation - one or more prestation and all of them are due.
Simple obligation - One prestation
Distributive obligation - Although two or more prestation but only one due it could be either alternative or
facultative.

Article 1200
it is agreeable and in favor of the debtor
(the ones who owes money) unless there will be a contract of agreement
that states that the debtor gives the right of choice to the creditor.

ART. 1201. The choice shall produce no effect except from the time it has been communicated. (1133)
Communication of notice that choice has been made.
1.) Effect of notice. - Until the choice is made and communicated, the obligation remains alternative.
a. Once the notice of the election has been given to the creditor, the obligation ceases to be
alternative and becomes simple.
b. Such choice once properly made and communicated is irrevocable and cannot, therefore, be
renounced. Such rule is inherent in the nature of the choice its purpose being to clarify and render
definite the rights of the one exercising the choice, so that the other party may act in consequence.
c. Where the choice has been expressly given to the creditor, such choice shall likewise produce
legal effects upon being communicated to the debtor.
2.) Proof and form of notice. — The burden of proving that such communication has been made is upon him
who made the choice. The law does not require any particular form regarding the giving of notice. It may,
therefore, be made orally or in writing, expressly or impliedly.

Article 1202
 The debtor shall lose the right of choice when among the prestations whereby he is alternatively
bound, only one is practicable.
 He can be applied when a person has an obligation that can be fulfilled in many ways. If, over time,
only one of the remaining ways is possible, he will lose the right to choose and he must fulfill the
obligation using the remaining way.

Example:
(A) borrowed money from (B) and then they had an agreement that (A) could pay either cash or
gcash, in case when the time came for the payment, (A) did not have cash, so he lost his right of choice to
choose between the two, he had no choice gcash is to be paid.

Article 1203
If through the creditor's acts the debtor cannot make a choice according to the terms of the
obligation, the latter may rescind the contract with damages.
When the creditor's action prevents the debtor from choosing between different ways to fulfill an
obligation, the debtor can cancel the contract and claim damages.

Example:
Sarah is going to buy a car now, the way of fullfilment can be cash or thru installment, if the seller wants only
thru installment, Sarah can cancel the contract and file for damages which includes what she spent to acquire
the car.

ARTICLE. 1204. The creditor shall have a right to indemnity for damages when, through the fault of the
debtor, all the things which are alternatively the object of the obligation have been lost, or the compliance of
the obligation has become impossible.

The indemnity shall be fixed taking as a basis the value of the last thing which disappeared, or that of the
service which last became impossible. Damages other than the value of the last thing or service may also be
awarded.

Article 1205
The right of choice belongs to the creditor, before the creditor communicate his/her choice the responsibilty
should be governed by the following rules:
1. If only one thing lost - (due to fortuitous event) creditor may choose from the remainder, then debtor
delivers the choice to creditor;
2. If only one thing lost – (due to fault of the debtor) the creditor has the right to claim or to choose among
the remainders or price of the lost item with damages.
3. If all things were lost – (due to fault of the debtor) creditor may choose the price of any of the lost item
with damages with indeminity damages.
4. If all things were lost - (due to fortuitous event) the obligation shall be extinguished. The rules are
applicable to obligation to do or not to do.

ART. 1206. When only one prestation has been agreed upon, but the obligor may render another in
substitution, the obligation is called facultative. The loss or deterioration of the thing intended as a substitute,
through the negligence of the obligor, does not render him liable. But once the substitution has been made,
the obligor is liable for the loss of the substitute on account of his delay, negligence or fraud.
This provision is defined what is facultative obligation,ang sabi only one prestation has been agreed upon but
the obligor may render another in substitution

Example: Tayao promised to give Josh a car but it was also stipulated that Tayao can give his house a
substitute.
In this Obligation only the car is due, the house is not included, because the house is just a
substitute. Its important to emphasize because the only obligation is to provide the car. The loss of the car
through Tayao's fault makes him liable in the second paragraph, the lost or deterioration of the thing intended
as a SUBSTITUTE trough the negligence of the obligor DOES not make him liable. Meaning the loss of the
thing intended as a substitute in our example tayao's house, even through his negligence the house was
damaged it will not make him liable because it is just a substitute.

Last Sentence but once the substitution has been made the obligor is liable for the loss of the
substitute and account of his delay negligence or fraud.meaning from the moment or once the substitution has
been made, that substitute that is no longer the car that will be given the house then the obligor is liable for
the loss of the substitute if its lost through his negligence delay or fraud.

(1)Number of prestation
 Alternative. various things are due but the giving of one is sufficient.
 Facultative. only one thing is principally due but the other may be given render payment or to
fulfill obligation
(2)Right of choice
 Alternative. either the creditor or debtor
 Facultative. only to the debtor
(3)Loss through fortuitous event
 Alternative. The loss of one or more alternatives does not extinguish the obligation
 Facultative. The loss of the thing extinguishes the obligation
(4)Loss through fault of debtor
 Alternative. if the right of choice belongs to the debtor,does not render him liable
 Facultative. Render him Liable
(5)if one of the prestation is illegal
 Alternative. The other prestation may be valid and the obligation remains
 Facultative. The nullity of the prestation agreed upon invalidates the obligation/ the debtor is not
bound to choose the substitute.

1. Before substitution. If the main object is lost through an unforeseen event, the obligation is extinguished;
otherwise, the debtor is liable for damages. The loss of the object provided in exchange with or without the
fault of the debtor does not render him liable.
The reason is that the thing intended in return is inappropriate. The effect of the loss is only to extinguish the
facultative nature of the obligation
2. After substitution. If the principal thing is lost, the debtor is not liable whatever may be the cause of the
loss, because it is no longer due. If the substitute is lost, the liability of the debtor depends upon whether or
not the loss is due through his fault.
3. Once the substitution is made, the obligation is converted into a simple one to deliver or perform the
substituted thing or prestation. The substitution becomes effective from the time it has been communicated.
(Art. 1201.)

Section 4: JOINT AND SOLIDARY OBLIGATIONS

ART 1207- IF THE LIABILITY IS JOINT, THEN THE FULFILLMENT OF THE OBLIGATION MUST
BE JOINTLY PROPORTIONAL TO EACH DEBTOR. THE CREDITOR IS NOT ALLOWED TO ASK
FOR FULL COMPLIANCE OF THE OBLIGATION FROM A SOLE DEBTOR.

ART 1208- THE ARTICLE IMPLIES THE GENERAL RULE WHICH PERTAINS TO THE COURT
FAVORING DEBTORS DUE TO SOLIDARY OBLIGATIONS BEING BURDENSOME, WHILE
INCREASING THE RIGHTS OF EACH CREDITOR.

Kinds of obligations according to the number of parties:

1. Individual obligation - (1) creditor (1) debtor
2. Collective obligation - multiple debtors and/or multiple creditors ● Joint obligation - payment to be
fulfilled proportionately by each debtor and/or demanded by each creditor.
● Solidary obligation - either debtors are bound to fulfill the obligation demanded by either
creditors.

Examples:
1. JD - JC
Scenario: a & b borrowed 10 pesos from c & d that is due to be paid the following week. A & b
wilfully complied with the obligation, being joint, both a & b paid 2.5 pesos each to c & d.
2. JD - SC
Scenario: A & b borrowed 10 pesos from c & d that is due to be paid the following week. Since c
& d each provided 5 pesos, as solidary creditors, they demanded the fulfillment of the obligation
which is for a & b to each pay 5 pesos to both c & d.
3. SD - JC
Scenario: A & b borrowed 10 pesos from c & d that is due to be paid the following week. As
solidary debtors, either of them can perform the fulfillment of the obligation, which in this case, a
paid 5 pesos to c and 5 pesos to d. Lastly, a can now exercise his right to reimbursement to d, and d
is now liable to pay 5 pesos to a.
4. SD - SC
Scenario: A & b borrowed 10 pesos to b & d that is due to be paid the following week. As solidary
debtors, a wilfully paid 10 pesos to the solidary creditors, specifically to c. A has the right to
reimbursement, having b liable to pay 5 pesos to a, while c being liable to provide the share of his
co-creditor.

Solidary obligation
 Is not lightly inferred and is only present when:
1.) The obligation expressly states so.
2.) The law requires
3.) Nature of the obligation requires solidarity

Kinds of solidarity
1.) According to the parties bounds:
 A.) Passive solidarity - any of the debtors can be made liable for the fulfilment of the obligation.
B.) Active solidarity - anyone among the creditors can demand the fulfillment of the obligation.
C.) Mixed solidarity - each debtor is liable to fulfill the obligation; while each creditor has the right
to demand the fulfilment of the obligation.
2.) According to source:
A.) Conventional solidarity - if solidarity is agreed upon by both parties.
B.) Legal solidarity - imposed by the law
C.) Real solidarity - imposed by the nature of the obligation

ART. 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

In case of breach of a joint indivisible obligation:

When there is plurality of debtors – compliance can be enforced by proceeding against ALL of the debtors.
If one of the debtors fails to perform,
the obligation can no longer be fulfilled because the prestation or object is indivisible. In indivisible
prestation, division is not possible

 Joint- is referring between the parties

 Indivisible- nag rerefer naman sya dun sa object

When there is plurality of creditors (but only one debtor) – the obligation can be performed only by
the delivery of the thing to all the creditors jointly. The debtor must not deliver to just one unless that
particular person has been authorized by all the creditors to receive the delivery. Otherwise, the debtor may
be liable for damages due to non-performance of the obligation in consideration of the other creditors.

ARTICLE 1210. THE INDIVISIBILITY OF AN OBLIGATION DOES NOT NECESSARILY GIVE RISE
TO SOLIDARITY. NOR DOES SOLIDARITY OF ITSELF IMPLY INDIVISIBILITY.

Indivisibility- refers to the subject matter or the object of obligation

Solidarity- refers to the tie between the parties yung relation both parties

An obligation can be indivisible and solidary at the same time. Hence, an obligation can be:
1. Solidary divisible obligation
2. Solidary indivisible obligation
3. Joint indivisible obligation
4. Joint divisible obligation

ART 1211. SOLIDARITY MAY EXIST ALTHOUGH THE CREDITORS AND THE DEBTORS MAY
NOT BE BOUND IN THE SAME MANNER AND BY THE SAME PERIODS AND CONDITIONS.
(1140)

Forms of Solidarity According to Sanchez Roman

A). Uniform Solidarity – when the debtors are bound by the same terms and conditions or stipulations.
B). Varied Solidarity – when the debtors while bound under the same obligation (like a loan) are not subject
to the same terms and conditions of payment but to different secondary stipulation or clauses.

As to parties bound, it can be active, passive or mixed. Active refers to solidarity among creditors.
Passive refers to solidarity among debtors. Mixed refers to solidarity among creditors and debtors.
Solidarity is not affected by diverse stipulation
It is possible to have solidary obligation Even if the parties are not bound with the same
stipulations. They relate to performances which by their nature have to be rendered in common by several
debtors, bound to the creditor by a single contract.

Joint obligation on one side, Solidary on the other

A joint obligation is distinguished from a solidary obligation in that the creditor in a joint obligation
can take action only against all the debtors together.

ARTICLE 1212. EACH ONE OF THE SOLIDARY CREDITORS MAY DO WHATEVER MAY BE
USEFUL TO THE OTHERS, BUT NOT ANYTHING WHICH MAY BE PREJUDICIAL TO THE
LATTER (1141A)

Act of solidary creditor useful/prejudicial to others.

 A solidary creditor may do any act beneficial or useful to the others but he cannot perform ay act
prejudicial to them. If he performs such act and as a result the obligation is extinguished, he shall
be responsible to the other for damage. As far as the debtor or debtors are concerned, the act shall
be valid and binding.

ARTICLE 1213. SOLIDARY CREDITOR CANNOT ASSIGN HIS RIGHTS WITHOUT THE CONSENT
OF THER OTHERS.

A solidary creditor cannot assign rights without the co-creditor's consent, as they represent each other and
assignees may not have original creditors' confidence, as they may not share after payment.
• If a solidary creditor did assign his right, will payment to the assignee extinguish the obligation?

Article 1213. Implies that such assignment is invalid. This rule is unjustifiable and places an unnecessary
restriction on the rights of the solidary co-creditor upon his share. The reason behind it seems to be that each
other creditor represents the others and, therefore, must have the confidence between co-creditors cannot
properly be said to exist except in the case of a solidary credit by contract.

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, PAYMENT
SHOULD BE MADE TO HIM.

ART. 1216 - THE CREDITOR MAY PROCEED AGAINST ANY ONE OF THE SOLIDARY DEBTORS
OR SOME OR ALL OF THEM SIMULTANEOUSLY. THE DEMAND MADE AGAINST ONE OF
THEM SHALL NOT BE AN OBSTACLE TO THOSE WHICH MAY SUBSEQUENTLY BE DIRECTED
AGAINST THE OTHERS, SO LONG AS THE DEBT HAS NOT BEEN FULLY COLLECTED.

RIGHT OF THE CREDITOR TO PROCEED AGAINGST ANY SOLIDARY DEBTOR.

1. Since the liability is solidary, the other, solidary debtors are not indispensable parties in a suit filed by the
creditor.
2. The bringing of an action against a solidary debtor to enforce the payment of the obligation is not
inconsistent with and does not preclude the bringing of another to compel the others to fulfill their
obligations.
3. In case of death of one of the solidary debtors, the creditor may proceed against the estate of the deceased
solidary debtor alone or against any or all of the surviving solidary debtors whose liability is independent of
and separate from the deceased debtor, instead of instituting a proceeding for the settlement of the estate of
the deceased debtor wherein his claim could be filed.
4. The choice is left to the solidary creditor to determine against whom he will enforce collection
ART. 1217 - PAYMENT MADE BY ONE OF THE SOLIDARY DEBTORS EXTINGUISHES THE
OBLIGATION. IF TWO OR MORE SOLIDARY DEBTORS OFFER TO PAY, THE CREDITOR
MAY CHOOSE WHICH OFFER TO ACCEPT.

HE WHO MADE THE PAYMENT MAY CLAIM FROM HIS CO DEBTORS ONLY THE SHARE
WHICH CORRESPONDS TO EACH, WITH THE INTEREST FOR THE PAYMENT ALREADY MADE.
IF THE PAYMENT IS MADE BEFORE THE DEBT IS DUE, NO INTEREST FOR THE INTERVENING
PERIOD MAY BE DEMANDED.

WHEN ONE OF THE SOLIDARY DEBTORS CANNOT, BECAUSE OF HIS INSOLVENCY,

REIMBURSE HIS SHARE TO THE DEBTOR PAYING THE OBLIGATION, SUCH SHARE SHALL BE
BORNE BY ALL HIS CO-DEBTORS, IN PROPORTION TO THE DEBT OF EACH.

Effects of Payment by a Solidary Debtor

1. Between the Solidary Debtors and Creditors- If one of the solidary debtors paid the whole debt, the debt is
considered settled and the obligation is considered fulfilled. When multiple debtors make payment offers,
the creditor has the discretion to select which offer to accept.
2. Among the Solidary Debtors- The debtor who paid the whole debt can ask his co-debtors for
reimbursement. If he paid on time, no interest can be added. But if he paid late, he can include interest in the
amount his co debtors need to reimburse.
3. Among the Solidary Creditors- Even if one of the solidary debtors pays the entire amount, they are still
responsible for their co-debtors' portions. If a co debtor can't pay due to insolvency, the one who paid in full
must still contribute to cover the insolvent co-debtor's share.

ARTICLE 1218. PAYMENT BY A SOLIDARY DEBTOR SHALL NOT ENTITLE HIM TO

REIMBURSEMENT FROM HIS CO-DEBTORS IF
SUCH PAYMENT IS MADE AFTER THE OBLIGATION HAS BEEN PRESCRIBED OR BECOME
ILLEGAL.”

EFFECT OF PAYMENT OF PRESCRIBED DEBT

Ex: A and B are solidary indebted to C in the amount of 5000 pesos. The debt prescribed.
If A, nevertheless, paid the debt, he cannot collect from B the share corresponding to the latter. Neither can A
recover from C. because according to article 1424.

ART. 1424 - When a right to sue upon a civil obligation has lapsed by extinctive prescription, the
obligor cannot recover what he has delivered or the value of the services he has rendered.

EFFECT OF PAYMENT OF AN ILLEGAL OBLIGATION

Ex. A and B are solidary bound to deliver C some drugs worth 100k pesos. Later, the law prohibits the
transaction of said drugs.

If A, nevertheless delivered the drugs knowing that the transaction of drugs is prohibited by law, he
cannot get any reimbursement from B because the payment was made after the obligation had become
illegal.

Article 1218 of the Philippine Civil Code addresses the principle of reimbursement among solidary
debtors. This article stipulates that when a solidary debtor makes a payment, they cannot claim
reimbursement from their co-debtors if this payment occurs after the obligation has either been
prescribed or become illegal.
 In essence, it emphasizes two critical conditions for reimbursement denial: first, the payment
must be made after the obligation's legal time limit, or prescription, has expired. Second, it applies
when the obligation itself has become illegal, such as through changes in laws or regulations.

This provision reflects the importance of timely payment and compliance with legal obligations. It
discourages solidary debtors from making payments outside the bounds of legal enforceability or when the
purpose of the obligation is rendered illegal. Consequently, it encourages due diligence and adherence to the
law in financial transactions involving multiple debtors.

This legal principle helps maintain the integrity of contractual agreements and encourages debtors
to resolve their obligations within the boundaries of legality and timeliness. It serves as a crucial element in
upholding the rule of law within the philippines’ legal system.

ART. 1219. THE REMISSION MADE BY THE CREDITOR OF THE SHARE WHICH AFFECTS ONE
OF THE SOLIDARY DEBTORS DOES NOT RELEASE THE LATTER FROM HIS RESPONSIBILITY
TOWARDS THE CO-DEBTORS, IN CASE THE DEBT HAD BEEN TOTALLY PAID BY ANYONE OF
THEM BEFORE THE REMISSION WAS EFFECTED.

*IF THE PAYMENT HAPPENED BEFORE REMISSION, THE REMISSION SHALL NOT BE
EFFECTIVE.

EXAMPLE: A AND B OWE C 3,000 PESOS. B PAYS THE DEBT IN FULL. AFTER
PAYING, C SAID THAT HE WILL FORGIVE THE 50% OF A’S DEBT. IN THIS CASE,
REMISSION IS NOT VALID BECAUSE THE DEBT IS ALREADY SETTLED.

*IF THE PAYMENT HAPPENED AFTER REMISSION, THE REMISSION SHALL BE EFFECTIVE.

EXAMPLE: A AND B OWE C 3,000 PESOS. C SAID THAT HE WILL FORGIVE THE 50%
OF A’S DEBT. B DID NOT KNOW THIS SO B PAID THE DEBT IN FULL. IN THIS CASE,
THE REMISSION IS VALID. IN ORDER TO RECOVER B'S OVERPAYMENT, A MUST
PROVE THAT THE REMISSION PRECEDED B'S PAYMENT.

ART. 1220 - THE REMISSION OF THE WHOLE OBLIGATION, OBTAINED BY ONE OF THE
SOLIDARY DEBTORS, DOES NOT ENTITLE HIM TO REIMBURSEMENT FROM HIS
CODEBTORS.

NO RIGHT TO REIMBURSEMENT IN CASE OF REMISSION

 Since the whole obligation is already remitted, even one of them has nothing to pay to the creditor,
so they have no right to ask for reimbursement.

Example:
A and B executed jointly and severally a promissory note for 2,000 in favor of C. C remmited the whole
obligation out of regard for A. A here is not entitled to reimbursement from B since A did not pay anything
to C. If only 1,300 is remmited, B is still liable to C for 700. B has no obligation to reimburse A for the 300
of B's share affected by the remmision for the same reason that no payment was made by A.
 SECTION 5: DIVISIBLE AND INDIVISIBLE OBLIGATIONS

ARTICLE 1223. The divisibility or indivisibility of the things that are the object of obligations in which
there is only one debtor and only one creditor does not alter or modify the provisions of Chapter 2 of this
Title. (1149)

Meaning of divisible and indivisible obligations.

1. A divisible obligation – is one the object of which, in its delivery or performance, is capable of partial
fulfillment.
2. An indivisible obligation – is one the object of which, in its delivery or performance, is not capable
of partial fulfillment.

Kinds of Division
1. Qualitative division - based on quality of the object of the obligation and not on the quantity of things.
2. Quantitative division - based on the quantity of the object of the obligation and not on the quality of
things.
3. Ideal or intellectual division - obligation that exist only in the minds of the parties.

Kinds of Indivisibility
1. Legal indivisibility - obligations by their nature are divisible and which the law declares are indivisible
2. Conventional indivisibility - obligations by their nature are divisible and which the will of the parties
makes it indivisible.
3. Natural indivisibility - the nature of the object or prestation does not admit of division.

ART. 1224. A joint indivisible obligation gives rise to indemnity for damages from the time anyone of the
debtors does not comply with his undertaking. The debtors who may have been ready to fulfill their promises
shall not contribute to the indemnity beyond the corresponding portion of the price of the thing or of the value
of the service in which the obligation consists.(1150)

Effect of non-compliance by a debtor in a joint indivisible obligation.

If any one of the debtors does not comply with his undertaking in a joint obligation, the obligation
is converted into one for damages. The creditor cannot ask for specific performance or rescission because
there is no cause of action against the other debtors who are willing to fulfill their promises.

ART. 1225. For the purposes of the preceding articles, obligations to give definite things and those which are
not susceptible of partial performance shall be deemed to be indivisible.

When the obligation has for its object the execution of a certain number of days of work, the
accomplishment of work by metrical units, or analogous things which by their nature are susceptible of partial
performance, it shall be divisible.

However, even though the object or service may be physically divisible, an obligation is indivisible
if so provided by law or intended by the parties.

In obligations not to do, divisibility or indivisibility shall be determined by the character of the
prestation in each particular case. (1151a) This article states the general rule for determining the divisibility or
indivisibility of an obligation.

Obligations deemed indivisible.

1. Obligations to give definite things
2. Obligations which are not susceptible of partial performance
3. Obligations provided by law to be indivisible even if thing or service is physically divisible 4. Obligations
intended by the parties to be indivisible even if thing or service is divisible

Obligations deemed divisible.

1. Obligations which have for their object the execution of a certain number of days of work 2. Obligations
which have for their object the accomplishment of work by metrical units 3. Obligations which by their
nature are susceptible of partial performance

Divisibility or indivisibility in obligations not to do

In negative obligations, the character of the prestation in each particular case shall determine their divisibility
or indivisibility.

SECTION 6: Obligations with a Penal Clause

ART. 1226. In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the
payment of interests in case of noncompliance, if there is no stipulation to the contrary. Nevertheless,
damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the
obligation. The penalty may be enforced only when it is demandable in accordance with the provisions of this
Code. (1152a)
1. Principal obligation - can stand by its own and not depending its validity and existence to other
obligation.
2. Accessory obligation - cannot stand alone for it is attached to a principal obligation.

Penal clause - accessory undertaking attached to an obligation to assume greater liability in case of breach

Purposes of penal clause:

 To insure their performance by creating an effective deterrent against breach, making the
consequences of such breach as enorous as it may be possible.
 To substitute a penalty for the indemnity for damages and payment of interest in case of non-
compliance. It may also be to punish.
Kinds of penal clause:
1) As to its origin:
a) Legal penal clause - when it is provided by law
b) Conventional penal clause - when it is provided by stipulation of the parties
2) As to its purpose:
a) Compensatory penal clause - when the penalty takes the place of damages
b) Punitive penal clause - when the penalty is imposed merely punishment for breach
3) As to its demandability or effect:
a) Subsidiary or alternative penal clause - when only the penalty can be enforced
b) Joint or cumulative penal clause - when both the principal obligation and the penal clause can
be enforced.

Creditor may recover damages when:

1. Stipulated by the parties
2. Obligor refuses to pay the penalty
3. Obligor is guilty of fraud in the fulfillment of the obligation

Article. 1227. The debtor cannot exempt himself from the performance of the obligation by paying the
penalty, save in the case where this right has been expressly reserved for him. Neither can the creditor
demand the fulfillment of the obligation and the satisfaction of the penalty at the same time, unless this right
has been clearly granted hi m. However, if after the creditor has decided to require the fulfillment of the
obligation, the performance thereof should become impossible without his fault, the penalty may be enforced.
(1153a)

Penalty not substitute for performance.

The purpose of the penalty is to secure the compliance with his obligation.

ART. 1228. Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be
demanded. (n)

Penalty demandable without proof of actual damages.

It is not necessary to cite evidences to prove losses and damages suffered by the creditor or the
extent of the same. The creditor may enforce the penalty whether he suffered damages or not. But he cannot
recover more than the stipulated penalty.

Damages recoverable in addition to penalty must be proved.

This article is applicable only where the penalty is fixed by the parties to substitute the indemnity
for damages. In any of the exceptions, the creditor must prove the exact amount of such damages which he
actually suffered resulting from the breach of the principal obligation.

ART. 1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or
irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be
reduced by the courts if it is iniquitous or unconscionable. (1154a)

Penalty may be reduced by the courts when:

1. When there is partial or irregular performance - as a general rule, an obligation is not deemed fulfilled
if the thing or service has not been completely delivered or rendered.
2. When the penalty agreed upon as iniquitous or unconscionable - even if iniquitous or unconscionable,
liquidated damages, whether intended as an indemnity or as a penalty, are subject merely to equitable
reduction.

Article 1230. The nullity of the penal clause does not carry with it that of the principal obligation. The nullity
of the principal obligation carries with it that of the penal clause. (1155)

Effect of nullity of the penal clause.

The principal obligation is still valid and demandable even if the penal clause is void. The penal clause is just
disregarded.

Effect of nullity of the principal obligation.

If the principal obligation is void, the penal clause will also be void. Because the penal clause cannot stand
alone without the principal obligation. But if it is due to the fault of the debtor, who acted in bad faith, the
penalty may be enforced to him.