GROUP 3

Acdal, Bea Magan, Fredsel Ryan

Aquino, George Peñaranda, John Carlo Labitad
Camuta, Vincent Ridao, Dominick Makiling
Densing, April Mae R. Victoria, Khryz Kayte Dela

A. Section 5-DIVISIBEL AND IMDIVISIBLE OBLIGATION

1. ART. 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)

1. 1. Divisible Obligation:
Is one object of which, in its delivery or performance, is capable of partial fulfillment.
1. 2. Indivisible Obligation:
Is one the object of which, in its delivery or performance, is not capable of partial
fulfillment.

Partial fulfillment - it doesn't fulfill all the requirements for the degree.

1. 2. Kinds of Divisions:

1.2. a. Qualitative Division – One based on quality, not on number or

quantity of the thing that are the object of the obligation.

1. 2. b. Quantitative Division- One based on quantity rather quality.

1. 2. C.. Ideal or Intellectual division – or one which exist only in minds of

the parties.

1. 3. Kinds of Indivisibility:

1. 3. a. Legal Indivisibility – Where a specific provision of law declares as

indivisible, Obligations which, by nature, are divisible.

1. 3. b. Conventional Indivisibility- Where the will of the parties makes

indivisible, obligations which by nature are divisible.

1. 4. c. Natural Indivisibility- Where the nature of the object or prestation

does not admit of division.

2. Article 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.

3. Article 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 objects the execution of a certain number of days of work, the
accomplishment of work by metrical units or analogous things which by their nature susceptible
of partial performance, it shall be divisible.

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

In obligation not to do, divisibility or indivisibility shall be determined by the character of the
prestation in each particular case.

3. 1. Obligations deemed indivisible

(1) Obligations to give definite things

(2) Obligations which are not susceptible of partial performance.

(3) Obligations provided by the 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 physically divisible.

3. 2. 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 for their object the
accomplishment of work by metrical units.

(3) Obligations which by their nature are susceptible of partial performance

B. Section 6- OBLIGATION WITH PENAL CLAUSE

1. 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)

1.2. Meaning of principal and accessory obligations.

(1) Principal obligation is one which can stand by itself and does
not depend for its validity and existence upon another obligation.

(2) Accessory obligation is one which is attached to a principal

obligation and, therefore, cannot stand alone.
1. 3. Meaning of obligation with a penal clause.

An obligation with a penal clause is one which contains an accessory undertaking to pay a
previously stipulated indemnity in case of breach of the principal prestation intended primarily to
induce its fulfillment.

1.4. Meaning of penal clause.

A penal clause is an accessory undertaking attached to an obligation to assume greater liability on

the part of the obligor in case of breach of the obligation, i.e., the obligation is not fulfilled, or is
partly or irregularly complied with.

1.5. Purposes of penal clause.

1.5. a. To insure their performance of the obligation.

1.5. b. To substitute a penalty for the indemnity for damages and the
payment of interests in case of non-compliance

1.5.c. to punish the debtor for the non-fulfi llment or violation of his
obligation.

1.6. Penal clause and condition distinguished.

1.6. a. The first constitutes an obligation although accessory, while the latter
does not

1.6.b. The former may become demandable in default, while the latter is
never demandable

1.7. Kinds of penal clause.

1.7.a. As to its origin:

(a) Legal penal clause. — when it is provided for by law; and
(b) Conventional penal clause. — when it is provided for by
 stipulation of the parties.

1.7.b. As to its purpose:

(a) Compensatory penal clause. — when the penalty takes the
place of damages; and
(b) Punitive penal clause. — when the penalty is imposed
merely as punishment for breach.

1.7.c. As to its dependability or effect:

(a) Subsidiary or alternative penal clause. — when only the
penalty can be enforced; and
(b) Joint or cumulative penal clause. — when both the principal
obligation and the penal clause can be enforced. (8 Manresa 215.)

1.8. Liability for penalty, damages, and/or interests

1.8.a. Penalty substitutes for damages ad interests (GR)

1.8.b. Penalty and interests enforceable

1.8.c. Penalty, damages and interests enforceable

1.8.d. Requirement to make penalty enforceable

2. ART. 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 him. 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)

Right of the debtor

The general rule is the debtor cannot substitute by paying the penalty and not fulfilling the
obligation.

Exception:

When the debtor is expressly granted the right.

Ex.

PPD promises to finish the house within a stipulated period of 8 months. The contract stipulates
that in case he does not build the house at all, he is supposed to forfeit the sum of 100k pesos.
In this case, as a general rule, SC as the contractor cannot just give the sum as a substitute for the
non-performance of the obligation.

Right of the creditor

As a general rule the creditor cannot demand the penalty and the fulfillment of the obligation at the
same time.

Exception:

The creditor can only demand both when it is clearly granted to him.

3. ARTICLE 1229. The judge shall equitably reduce the penalty when the principal obligation 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.

3.1. When the penalty may be reduced by the courts.

3.1.a.When there is partial or irregular performance,- The first refers to the extent
or fulfillment, the latter, to the manner. As a general rule, an obligation is not
deemed performed unless the thing or service in which it consists has been
completely delivered or rendered.

3.1.b.When the penalty agreed upon is iniquitous or unconscionable,- Here, the

penalty may be reduced even if there is no performance at all. Even if iniquitous or
unconscionable, liquidated damages, whether intended as an indemnity or as a
penalty, are not void, but subject merely to equitable reduction.

4. ART. 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)

4.1. Effect of nullity of the penal clause.

The general principle that the accessory follows the principal and
not vice versa is illustrated in the above article.

4.2. Effect of nullity of the principal obligation.

If the principal obligation is void, the penal clause is likewise void.