Obligations Classified According to Plurality of Object or Prestation [Arts.

1199-1206]

Q. What are the different classifications of Obligations based on PLURALITY OF OBJECTS or

PRESTATIONS?

OBLIGATIONS MAY BE CLASSIFIED BASED ON PLURALITY OF OBJECTS OR

PRESTATIONS:

1.) Conjunctive is one where debtor has to perform all the several
prestations in the contract to extinguish the obligation

2.) Alternative is one where debtor is alternatively bound by different

prestations but the complete performance of one of them is sufficient to
extinguish the obligation.

3.) Facultative is one where the debtor is bound to perform one prestation
or to deliver one with a reserved right to choose another prestation or thing
as substitute for the principal.

SECTION 3. - ALTERNATIVE OBLIGATIONS

Art. 1199. A person alternatively bound by different prestations shall completely perform
one of them.

The creditor cannot be compelled to receive part of one and part of the other undertaking.

Art. 1200. The right of choice belongs to the debtor, unless it has been expressly granted to
the creditor.

The debtor shall have no right to choose those prestations which are impossible, unlawful
or which could not have been the object of the obligation.

Q. What is an Alternative Obligation?

A. An obligation is alternative when several objects or prestations are due, but the
payment or performance of one of them would be sufficient.

Q. As a general rule who is given the right to choose which of the prestations he will perform in
an alternative obligation? Exception?

A. In ALTERNATIVE OBLIGATION, it is the DEBTOR who is given the right to choose

which of the prestations he will perform.

Exception:
a. When right is expressly granted to the creditor, or;

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 b. When it is expressly agreed upon by the parties that a 3rd person shall make
the choice

Note: Implied grant of choice to creditor or 3rd person is not allowed, as Art.
1200 grants this right to choose the prestation to be performed to the Debtor.

Q. What are the Limitations on Debtors right to choose?

a.) Debtor cannot choose part of the prestation and part of another; it must be
indivisible.

Example: A promises to deliver either 100 sacks of diamond rice OR 6 cows to B, in exchange
for Bs 100 sq.m. lot in the province. The obligation is alternative.

Q. Can A simply choose to deliver to B instead, 50 sacks of rice and 3 cows?

A. No, for this is in violation of Art. 1199. Exception: if creditor B agrees.

b.) Debtor cannot choose impossible or unlawful undertakings, or those which

could not have been the object of the obligation.

Example: A promises to deliver either 100 sacks of diamond rice or 6 cows to B, in exchange of
the latters 100 sq.m. lot. The obligation is alternative.

Q. Can A simply choose to deliver to B instead, 50 sacks of rice and 1 kilo of dried marijuana
leaves?
A. No, for this is in violation of Art. 1199.

Read Cases:
1. Agoncillo v. Javier, 30 Phil. 124 stipulation in contract that: if debt is not paid in money, it may be
paid in another specific way (e.g. house and lot, or land), is valid. Alternative obligation allowed by
law.
2. Ong Guan Can & BPI v. Century Insurance Co., 46 Phil. 592

Art. 1201. The choice shall produce no effect except from the time it has been
communicated.

Q. When does the choice of the prestation by the debtor takes effect? How should this choice
be communicated to the creditor?

Choice by debtor of prestation takes effect from the time it is communicated to

the creditor;

Communication may be made: (a.) orally, (b.) in writing,

(c.) tacitly; (d.) other unequivocal means

Choice may be given by, or to an authorized representative

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Q. Once choice by debtor is communicated to creditor, what are its effects or legal
consequences?

A. 1.) The obligation is now limited or concentrated to the object or prestation

chosen with all consequences provided by law.
2.) It becomes a simple obligation to perform the prestation chosen.
3.) It becomes irrevocable

Q. Does the law require the creditors agreement to the debtors choice?

A. No, otherwise this would be contrary to the very nature of alternative obligation
which empowers the debtor to perform completely one of the prestations pursuant
to his choice. The same principle applies if the right of choice is given to the
creditor.

Note: Disagreement by civil law authors to the SC declaration in Ong Guan Can v. Century Insurance,
46 Phil. 592 that: debtor must notify the creditor in order to give the creditor opportunity to express
his consent or to impugn the election made by the debtor. ERROR.

Q. If the debtor without announcing to the creditor his choice among the prestations proceeded
to perform one of them, will this be considered as binding?

A. The fact of performance by debtor who has the right to choose is a form of an
implied or tacit selection, unless debtor performs one of the prestations by
mistake. In the latter case, there is no selection nor a binding performance of the
obligation. Debtor can recover what is given according to the law on quasi-
contracts.

Q. For the choice to be effective, what is the rule if there are several debtors or creditors?

A. If obligation is JOINT, consent of all is necessary for choice to be effective,

because none of them can extinguish the entire obligation alone.
If obligation is SOLIDARY, and without stipulation to contrary, choice of one
will be binding to all.

Q. What is the effect of delay by debtor in making a choice or selection?

A. The right to choose by debtor is not lost by mere delay in his selection. But if a
case is filed in court before any choice is made by debtor, an issue arises as to who
will make the selection or choice now? The following theories in foreign jurisprudence
may be adapted:

a.) French Theory court gives the party with right of choice to make the choice, otherwise the court
will make the choice or will give it to the other party.

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 b.) German Theory right to choose passes to the other party upon delay by party entitled to choose;
the latter is deemed to have waived his right to choose in favour of the other party who may then
exercise such right. Debtor cannot paralyze the remedy of the creditor to demand performance when
due, by simply refusing to make a selection.

The court may however in the interest of justice & equity grant the debtor a
period to make his choice before creditor is allowed to choose.

Art. 1202. The debtor shall lose the right of choice when among the prestations whereby he
is alternatively bound, only one is practicable.

Article 1202 applies only when Debtor has the right of choice.

Q. What is the legal effect, when among the prestations whereby the debtor is alternatively
bound, and only one is practicable?

A. OBLIGATION BECOMES SIMPLE & CEASES TO BE ALTERNATIVE when all prestations

are impossible, unlawful, except for one, then debtor is left with only one choice. The obligation
becomes pure and simple; it ceases to be alternative.

See: LEGARDA et al v. MIAILHE, 88 PHIL. 637 creditor has the option to get paid either in Phil. currency
or English currency when the obligation becomes due and demandable. When the time came, the only
available currency is Phil. currency or the Japanese military notes for all other currencies were
outlawed.

Apply: Art. 1202 and Art. 1200, par. 2.

NOTE: Impossibility of other prestations must not be due to creditors acts, otherwise, Art. 1203 shall
apply. (In such case, debtor may rescind contract)

Art. 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.

Q. What are the legal consequences if by Creditors acts would render debtors choice
impossible?

A. (1.) Debtor may rescind contract plus damages [ Art. 1203 ]

(2.) Debtor may also opt to select the remaining prestation, because rescission is not
automatic.

Illustrate: Ella agreed to do the interior design/decoration of James house, or, his office for a fee
of P100,000. James however, before Ella can make a choice, opted to have his fianc Kyra do
the interior decoration of his residence. The alternative prestation of doing the interior
design/decoration of James residence is now impossible due to his act. Ella is now left with one
choice, which is the simple obligation to do the interior decoration of James office.

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Q. What are the options of debtor Ella in this case?
A. 1. Do the interior design/decoration of James office, or;
2. May rescind the contract (plus damages if any)

Q. Why rescind the contract when it was clear that debtor has 2 alternative choices in the
contract?

A. Because the debtor is now deprived of her right to choose which prestation to do
by reason of creditors own acts. (Art. 1203)

Art. 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 1204 applies if Debtor has the right to choose prestation, and all the
prestations are made impossible due to the fault of debtor.

ILLUSTRATION:

Willy agreed to deliver his house in Alabang, or his gold bars, or his Monet painting to
Manny as payment for his island.

Article 1204 : NOTA BENE

1.) If all objects of alternative obligation have become impossible due to the fault
of debtor, creditor will be indemnified for damages.

2.) If the cause of impossibility is due to fortuitous event, the obligation is

extinguished and the debtor is not liable for damages, and released from
responsibility, unless there is contrary stipulation.

3.) If there are several prestations due but became impossible due to fortuitous
event, and the only one left becomes impossible due to fault of debtor, Art.
1204 will apply. Debtor is liable for damages.

4.) But if some of the prestations due became impossible due to fault of debtor,
and the remaining prestation becomes impossible due to fortuitous event,
would this relieve debtor from any liability?

PARAS: Obligation is extinguished and the debtor is relieved from liability.

Reason Debtor is generally given the choice of how to meet the obligation in
alternative obligations. Thus, impossibility of prestations even by fault of

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 debtor, converted the obligation into simple obligation to perform the
remaining prestation. If this in turn becomes impossible to perform due to
fortuitous event, then the obligation is extinguished.

TOLENTINO: Debtor may still be held liable, but the basis will be the value of
the last thing or object which disappeared, or the service that became
impossible due to his fault (par.2). This is more just.

Reason the negligence or fault of the debtor has diminished the possibility of
the performance of the obligation. Debtors lack of diligence caused the first
prestations to become impossible. The obligation could have been complied
with, even if later fortuitous event rendered one prestation impossible.

The debtor should not be relieved from liability when his fault or negligence
concurred with the fortuitous event in making the performance impossible. This
view is also shared by modern authors like Pothier, Duranton and Demolombe.

5.) Damages other than the value of the last thing or service may also be awarded
if justified by facts of case.

Art. 1205. When the choice has been expressly given to the creditor, the obligation shall
cease to be alternative from the day when the selection has been communicated to the
debtor.

Until then the responsibility of the debtor shall be governed by the following rules:

(1) If one of the things is lost through a fortuitous event, he shall perform the
obligation by delivering that which the creditor should choose from among the
remainder, or that which remains if only one subsists;

(2) If the loss of one of the things occurs through the fault of the debtor, the creditor
may claim any of those subsisting, or the price of that which, through the fault of the
former, has disappeared, with a right to damages;

(3) If all the things are lost through the fault of the debtor, the choice by the creditor
shall fall upon the price of any one of them, also with indemnity for damages.

The same rules shall be applied to obligations to do or not to do in case one, some or all of
the prestations should become impossible.

This Article applies when it is the CREDITOR who has the right of choice.
This is an exception to general rule in Art. 1200.
The choice of creditor becomes effective from the time it is communicated to the
debtor, either expressly or tacitly. At this point, the obligation ceases to be
alternative and is turned into a simple one.

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There is TACIT selection or choice exercised by Creditor if:
a.) Creditor accepts a prestation offered by debtor;
b.) Creditor brings an action to enforce one of the prestations.

Q. In an alternative obligation where the Creditor is given the right of choice among the
prestations, will the Debtor incur in delay, if the creditor fails to make his choice within the
period fixed for the performance?

A. EFFECT OF CREDITORS DELAY - The Debtor will not incur in delay in performance
of obligation even if there is a period fixed for performance.

Reason:
o Until the obligation becomes a simple obligation by creditors
communication of his choice, debtor would not know which of the
prestations is he supposed to perform.
o Also, creditor, because of his inaction or own delay to act, is deemed to
have waived the period fixed in the obligation.

SUMMARY ALTERNATIVE OBLIGATIONS

IF CHOICE BELONGS TO THE DEBTOR :

Q. What are the RULES in case of LOSS of the THING or OBJECT or PRESTATION due?

1.) IF LOSS IS DUE TO FORTUITOUS EVENT Without Fault of Debtor:

a. When through fortuitous event or through the debtors acts, there is only
ONE prestation left, the obligation ceases to be alternative and is converted
to a pure and simple obligation. (Article 1202).

b. When ALL the things are lost due to a fortuitous event, without fault of the
debtor, the obligation is extinguished.

2.) IF LOSS IS DUE TO DEBTORS FAULT:

a. When some things are lost due to the debtors fault but there are still some
things remaining, then the debtor can choose from remains.

b. When ALL the things are lost due to the debtors fault, the creditor can sue
for damages (Article 1204)

3.) IF LOSS IS DUE TO A COMBINATION OF FORTUITOUS EVENT &/or DEBTORS

FAULT:

a. When all but one of the things are lost due to a fortuitous event and the last
object is lost through the debtors fault, then the creditor can sue for damages.
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 b. When all but one of the things are lost through the debtors own acts or fault,
and the last object is lost through a fortuitous event, the obligation is
extinguished. (Paras opinion)

OR debtor is liable for damages based on the value of the last prestation or
object which disappeared or became impossible through Debtors fault. Reason:
Debtor should not be relieved from his liability when his fault coincided with the
fortuitous event that made performance impossible. (Tolentinos opinion)

4.) IF LOSS IS DUE TO CREDITORS ACT OR FAULT:

a. When the choice of the debtor is limited due to the creditors own acts, then
the Debtor may choose (i.) to opt for the remaining object or prestation, or;
(ii.) avail of the remedy of resolution or rescission [Article 1191], plus
damages [Article 1203]

IF CHOICE BELONGS TO THE CREDITOR (Article 1205)

Q. What are the RULES in case of LOSS of the THING?

1.) If thing is LOST through a FORTUITOUS EVENT:

a. One or some of the things are lost - creditor can choose from the
remainder, or that which remains if only one subsists;
b. When ALL the things are lost due to a fortuitous event, the obligation is
extinguished;

2.) If thing is LOST through the FAULT OF DEBTOR:

a. One or some of the things are lost - the creditor may (i) choose from the
remainder or that which subsists, plus damages; or (ii) get the value of any
of the object lost, plus damages;

Q. Why should debtor still pay for damages if there are still remaining things from which
creditor may still choose?
A. Because thru the fault of debtor, he deprives creditor to include this thing from his
choices given him by the agreement and the law (Art. 1205).

c. When ALL of the things are lost - the creditor can get the value of any of
the objects lost, plus damages;

3.) If ALL of the things are lost due to the CREDITORS fault, the obligation is
extinguished.

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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.

Q. What is FACULTATIVE OBLIGATION?

A. It is one where the parties to the obligation agreed that the debtor/obligor is
required to perform only one prestation, but he may perform or deliver another in
substitution. Here, the option to perform the substitute is dependent on the will of the
Obligor or Debtor.

Example: X and Z agreed in a contract that X will deliver to Z a new red Porsche Carrera sports
car, with a provision that if this is not immediately available within the period, X can replace it
with a black AUDI A4 car.

Q. What is the effect if the substitute is lost or has deteriorated, or becomes impossible due to
the fault of debtor?

A. The obligation is generally not affected. Debtor cannot be held liable for damages.
Why? The substitute is not the prestation or object that is due. Only the principal is
the one that is due and enforceable by the creditor at this point, not the substitute.

However, once debtor communicates to creditor of his choice to perform or deliver

the substitute, the substitute becomes the principal and only prestation or object of
the obligation that will be due. From this time, the debtor may be liable for the loss or
deterioration of the thing due to his delay, bad faith, negligence or fraud, even in case
of fortuitous event.

Q. Compare Facultative and Alternative Obligations?

A. i.) Facultative obligations bear a resemblance to alternative obligations particularly

when the choice in an alternative obligation is with the debtor.

ii.) But in a facultative obligation, the right of choice is always with the debtor. In
alternative obligations, it is also possible for creditor to be expressly given the choice
of prestations.

iii.) In an alternative obligation, if one of the prestations disappears or becomes

impossible, the choice of prestation may still be made from the remaining objects or
prestations. In a facultative obligation, if the principal obligation becomes impossible,
the obligation is deemed annulled, even if the substitute may still be available.

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Note:
o In theory, it is easy to distinguish a facultative obligation from an alternative
obligation. But in practice, it can be difficult since the wording of contracts may be
ambiguous or not clear enough.

Example: I promise to deliver my Honda Accord, but I reserve my right to replace this with my
Ford Pick-up. In this case, is the obligation Alternative or Facultative?

o Here, one must look at the circumstances of the obligation and intention of
contracting parties. If it is impossible to determine which one, then the doubt
should be resolved in the favor of an Alternative Obligation since its effects are
less radical than Facultative obligation.

o Why? In In an alternative obligation, if one of the prestations disappears or

becomes impossible, the choice of prestation may still be made from the
remaining objects or prestations. In a facultative obligation, if the principal
obligation becomes impossible, the obligation is deemed annulled, even if the
substitute may still be available.

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