Joint and Solidary Obligations

Divisible and Indivisible Obligations

Obligations with a Penal Clause
At the end of the lecture, the students should
be able to:

1. enumerate and explain the different kinds

of obligations;

2. give examples of the different kinds of

obligations; and
3. give the effects of the different kinds of
obligations on the rights and duties of
creditors and debtors, respectively.
Primary classifications of obligations under the
Civil Code:

 pure and conditional obligations

 obligations with a period

 alternative and facultative obligations

Primary classifications of obligations under the
Civil Code:

 joint and solidary obligations

 divisible and indivisible obligations

 obligations with a penal clause

Kinds of obligations according to the number of
parties:

a. individual obligation – an obligation where

there is only one obligor and one obligee

b. collective obligation – an obligation where

there are two or more obligors and/or two
or more creditors
“joint obligation”

- an obligation where the prestation is to be

performed proportionately by the different
debtors and/or is to be demanded
proportionately by the different creditors
Example:

X and Y borrowed ₱10,000.00 from Z. They

bound themselves jointly to pay Z.

In this case, X and Y are only obliged to pay

₱5,000.00 each to Z.

Z cannot demand either X or Y to pay the full

amount of ₱10,000.00.
“solidary obligation”

- an obligation where each of the debtors is

bound to comply with the whole prestation
and/or each of the creditors has a right to
demand compliance with the whole prestation
Example:

X and Y borrowed ₱10,000.00 from Z. They

bound themselves solidarily to pay Z.

In this case, X and Y are only liable for

₱5,000.00 each. However, Z may demand
either X or Y to pay the full amount of
₱10,000.00.
“The concurrence of two or more creditors or of
two or more debtors in one and the same
obligation does not imply that each one of the
former has a right to demand, or that each one
of the latter is bound to render, entire
compliance with the prestation.”

- Article 1207, Civil Code

“If from the law, or the nature or the wording of
the obligations to which the preceding article
refers the contrary does not appear, the credit
or debt shall be presumed to be divided into as
many shares as there are creditors or debtors,
the credits or debts being considered distinct
from one another,”

- Article 1208, Civil Code

Words that indicate joint liability:

a. “pro rata”
b. “proportionately”
c. “we promise to pay”, signed by two or more
persons
Example:

X and Y borrowed ₱10,000.00 from Z. There

was no stipulation as to whether they were
jointly or solidarily liable.

In this case, the law presumes that they are only

jointly liable.
Example, continued:

Thus, in this case, there are two debts and one

credit.

Z can demand only ₱5,000.00 each from X and

Y.
Example:

X borrowed ₱10,000.00 from Y and Z. There

was no stipulation as to whether Y and Z were
joint or solidary creditors.

In this case, the law presumes that they are only

joint creditors.
Example, continued:

In this case, there is only one debt and two

credits.

Y and Z may each demand only ₱5,000.00 from

X.
“There is a solidary liability only when the
obligation expressly so states, or when the law
or the nature of the obligation requires
solidarity.”

- Article 1207, Civil Code

Words that indicate solidary liability:

a. “jointly and/or severally”

b. “solidaria”
c. “in solidum”
d. “together and/or separately”
e. “individually and/or collectively”
f. “I promise to pay” signed by two or more
persons
“Solidarity may exist although the creditors and
the debtors may not be bound in the same
manner and by the same periods and
conditions.”

- Article 1211, Civil Code

To whom can the debtor pay?

“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.”

- Article 1214, Civil Code

“The creditor may proceed against any one of
the solidary debtors or some or all of them
simultaneously.”

- Article 1216, Civil Code

“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.”

- Article 1216, Civil Code

“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.”

- Article 1217, Civil Code

“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.”

- Article 1217, Civil Code

“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.”

- Article 1217, Civil Code

De Leon, H. S. & De Leon, H. M. (2011). The
Law on Obligations and Contracts, 2011 ed.
Manila: Rex Book Store.

Jurado, Desiderio P. (2010). Comments &

Jurisprudence on Obligations and Contracts.
Manila: Rex Book Store.
“divisible obligation”

- an obligation the object of which is capable of

partial fulfillment in its delivery or performance
Example:

X borrowed ₱10,000.00 from Y. They agreed

that the amount may be repaid in five equal
monthly installments.

In this case, X’s obligation is divisible because it

is capable of partial performance.
“indivisible obligation”

- an obligation the object of which is not

capable of partial fulfillment in its delivery or
performance
When is an obligation divisible?

“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.”

- Article 1225, Civil Code

When is an obligation 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.”

- Article 1225, Civil Code

Example:

X borrowed ₱10,000.00 from Y. They agreed

that X must pay the full amount on December
25, 2015.

In this case, even though the amount is

divisible, the obligation is indivisible because
the parties intended that the obligation be
performed all at once.
When is an obligation indivisible?

“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.”

- Article 1225, Civil Code

“A joint indivisible obligation gives rise to
indemnity for damages from the time anyone of
the debtors does not comply with his
undertaking.”

- Article 1224, Civil Code

“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.”

- Article 1224, Civil Code

“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.”

- Article 1209, Civil Code

“The indivisibility of an obligation does not
necessarily give rise to solidarity. Nor does
solidarity of itself imply indivisibility.”

- Article 1210, Civil Code

“obligation with a penal clause”

- an obligation which includes an undertaking

to pay a stipulated indemnity in case of breach
of the principal prestation
“penal clause”

- an accessory undertaking to assume greater

liability in case of breach of the principal
prestation in an obligation
Example:

X promised to repair Y’s building within 3

months.

They agreed that if X fails to finish the repairs

in 3 months, X will pay ₱100,000.00 to Y.
Purposes of a penal clause:

1. to ensure the performance of the obligation

2. to punish the debtor for breach of the

obligation

3. to provide a substitute for the indemnity for

damages and the payment of interests in
case of non-compliance with the obligation
“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.”

- Article 1226, Civil Code

“Nevertheless, damages shall be paid if the
obligor refuses to pay the penalty or is guilty of
fraud in the fulfillment of the obligation.”

- Article 1226, Civil Code

The creditor may recover damages in addition
to the penalty in the following cases:

a. when so stipulated by the parties;

b. when the obligor refuses to pay the penalty;

or

c. when the obligor is guilty of fraud in the

fulfillment of the obligation.
“Proof of actual damages suffered by the
creditor is not necessary in order that the
penalty may be demanded.”

- Article 1228, Civil Code

“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.”

- Article 1227, Civil Code

“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 him.”

- Article 1227, Civil Code

“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.”

- Article 1227, Civil Code

“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.”

- Article 1229, Civil Code

What is the effect if penal clause / principal
prestation is void?

“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.”

- Article 1230, Civil Code

De Leon, H. S. & De Leon, H. M. (2011). The
Law on Obligations and Contracts, 2011 ed.
Manila: Rex Book Store.

Jurado, Desiderio P. (2010). Comments &

Jurisprudence on Obligations and Contracts.
Manila: Rex Book Store.