CHAPTER 3, SEC.

3 (Articles 1199-1206)

SECTION 3 – ALTERNATIVE OBLIGATIONS

(Arts. 1199-1206)

STUDY GUIDE :

1. Kinds of obligation according to object.

(A) Simple – one prestation only

(B) Compound – two or more prestations
(b.1.) Conjunctive – all prestations are due
(b.2.) Distributive – only one, or some of the several prestations, are due
(b.2.1.) Alternative (b.2.2.) Facultative

2. Distinguish between an alternative and a facultative obligation. –

(A) Alternative – one where, out of two or more prestations which may be given or
performed, only one is due, and the complete performance of one of them
extinguishes the obligation. (Art. 1199)
(B) Facultative – one where only one prestation has been agreed upon but the
DEBTOR may render another in substitution. (Art. 1206)

3. The right of choice in alternative obligations. –

(A) The general rule is that the right to choose the alternative belongs to the
DEBTOR.
(B) There are, however, limitations to this preferential right of the debtor :
(b.1.) When the right of choice is expressly given to the creditor by express
stipulation in the parties’ contract. (Art. 1200, par. 1)
(b.2.) The debtor cannot choose part of one prestation and part of another
prestation. (Art. 1199, par. 2)

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(b.3.) The debtor has no right to choose those prestations which are
impossible, unlawful, or which could not have been the object of the
obligation. (Art. 1200, par. 2)
(b.4.) The choice cannot produce any legal effect until it has been
communicated to the other party. (Art. 1201)
(b.5.) The debtor loses the right of choice when only one alternative prestation
is practicable of performance. (Art. 1202)

 READ THIS CASE IN ITS ORIGINAL TEXT : Ong Guan Can

vs. The Century Insurance Co., Ltd., G.R. No. L-22738,
December 2, 1924.

4. Art. 1203. – The debtor is given the right to rescind the contract with damages if, by
reasons attributable to the creditor’s acts, the debtor cannot exercise his right of
choice among the prestations, according to the terms of the contract.

5. In alternative obligations, what are the effects of the loss or impossibility of the
alternative prestations before the right of choice has been exercised?

(A) When the choice belongs to the debtor.

(a) If the loss is due to a fortuitous event :
(a.1.) If all are lost, the obligation is extinguished. (Art. 1174)
(a.2.) If two or more of the alternatives remain, the debtor can deliver any
of the two remaining. (Art. 1202)
(a.3.) If only one remains, there is no more alternative obligation but a
simple obligation. What he should deliver is the remaining object.
(Art. 1202)

(b) If the loss is due to the debtor’s fault :

(b.1.) If all are lost, the obligation is converted into monetary consideration
as indemnity for damages, taking into consideration the value of the
last thing/service lost plus damages. (Art. 1204, pars. 1 & 2)

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CHAPTER 3, SEC. 3 (Articles 1199-1206)

(b.2.) If two or more of the alternatives remain, the debtor can choose
which one to deliver (between the two) but NO damages. (Art.
1200, par. 1)

NOTE: The debtor is NOT liable for damages since he has the right
of choice, and the obligation can still be performed. This is an
exception to the general rule established in Article 1170 regarding
liability for damages arising from negligence.

(b.3.) If only one remains, there is no more alternative obligation but a

simple obligation. What he should deliver is the remaining object but
NO damages. (Art. 1202)

(B) When the choice belongs to the creditor.

(a) If the loss is due to a fortuitous event – The effects are the same as when
the right of choice belongs to the debtor.

(b) If the loss is due to the debtor’s fault :

(b.1.) If all are lost, the obligation is converted into monetary consideration
as indemnity for damages, taking into consideration the value of any
of the objects chosen by the creditor (because he is given the right of
choice) plus damages. (Art. 1205, par. 2[3])

(b.2.) If two or more of the alternatives remain, the obligation is still

alternative. The creditor has the option to either:
(Art. 1205, par. 2[2])

(b.2.1.) choose between the two remaining alternatives; OR

(b.2.2.) choose the lost object. In such case, the debtor will then be
liable for the value of the lost object chosen, plus damages.

NOTE No. 1 : When the choice belongs to the creditor, and the loss is due to the
debtor’s fault, there is damages to be awarded because the creditor was deprived of his
right to choose.

NOTE No. 2 : In all cases, there is NO communication of the choice made. If there was
already a communication, there is no more alternative obligation. The obligation becomes

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pure after communication of the choice, and the abovementioned rules are no longer
applicable.

6. In facultative obligations, the right of choice belongs ONLY to the debtor (Art.
1206, par. 1). Once the substitution is made, the obligation is converted into a
simple one to deliver or perform the substituted thing or prestation. The substitution,
likewise, becomes effective from the time it has been communicated (Art. 1201).

7. In facultative obligations, what are the effects of the loss or deterioration of the thing?

(a) If lost before substitution. –

Principal Thing Substitute

(a) If due to a fortuitous
event, the obligation
is extinguished.
(b) If due to the debtor’s
fault, he is liable for
damages.
(a) With or without the debtor’s fault, the
obligation to deliver the substitute is
extinguished.
Rationale: What is to be delivered is the
principal object and not the substitute.
The loss of the substitute is immaterial.

(b) If lost after substitution. –

Principal Thing Substitute

(a) The debtor is not liable
whatever may be the
cause of the loss,
because it is no longer
due.
(a) If due to a fortuitous event, the
obligation is extinguished.
(b) If due to the debtor’s fault, he is liable
for damages.

8. llustrative distinction between an alternative and a facultative obligation. –

(a) Alternative – D will give prestation No. 1 or prestation no. 2. If prestation No. 1
is lost by virtue of a fortuitous event, D will still have to give prestation No. 2.

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CHAPTER 3, SEC. 3 (Articles 1199-1206)

(b) Facultative – D will give prestation No. 1, but if D wants, he may give
prestation No. 2. If prestation No. 1 is lost by a fortuitous event, the obligation is
extinguished (because the principal object has been lost), and D does not have
to give object No. 2.

APPLICATION/PROBLEMS :
1. On December 4, 2015, D obtained a loan from C in the amount of P300,000.00. It
was agreed by the parties that on June 15, 2016, D could comply with his obligation by
payment to C of the P300,000.00, or by delivering to C 150 sacks of Dinorado rice, or by
giving C 15 German Shepherd puppies. On June 15, 2016, D was short of cash so he paid
C the amount of P150,000.00. At the same time, D also delivered to C 75 sacks of Dinorado
rice which was valued at P150,000.00. C, however, refused to accept D’s payment and
delivery. Is C legally justified in rejecting D’s payment? à Clue: Art. 1199.
2. On February 11, 2016, D obliged himself to give C his emerald ring or his portable
Panasonic DVD player. It was agreed that D will deliver the emerald ring or the portable
DVD player to C’s house on or before July 15, 2016. On July 15, 2016, D arrived at the
house of C and delivered to C his emerald ring. C, however, refused to accept the emerald
ring and insisted that D deliver the portable DVD player instead. D, however, was stubborn
and insisted that C accept the emerald ring. Decide on the rights of the parties.
à Clue: Art. 1200.
3. On January 31, 2016, D obliged himself to give C, at D’s option, on April 15, 2016,
the following objects: (a) his goat from Israel worth P45,000.00; (b) his Swiss cow worth
P55,000.00; or, (c) his Australian kangaroo worth P60,000.00. On March 24, 2016, before D
had a chance to communicate his choice of the prestation to be complied with to C, both the
goat and the cow died because D’s caretaker had neglected to feed them for 2 weeks. What
will be the obligation of D to C on maturity date? What will be his liability?
à Clue: Art. 1204.

*** END ***

FOOD FOR THOUGHT

“The good Lord gave you a body that can stand most anything. It’s your mind you have to convince.”
Aristotle

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