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SECTION 6. - Obligations With A Penal Clause

The document discusses obligations with a penal clause under Philippine law. It states that a penalty shall substitute damages and interest in cases of noncompliance, unless otherwise stipulated. Damages are still owed if the obligor refuses to pay the penalty or acts fraudulently. The penalty can only be enforced according to the Code's provisions. The debtor cannot exempt themselves from obligation by paying the penalty, unless this right is expressly reserved. The creditor cannot demand both fulfillment and satisfaction of the penalty simultaneously, unless this right is clearly granted. However, if performance becomes impossible after the creditor demands fulfillment, the penalty may still be enforced. Proof of actual damages is not needed to demand the penalty. The judge may equitably reduce

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55 views1 page

SECTION 6. - Obligations With A Penal Clause

The document discusses obligations with a penal clause under Philippine law. It states that a penalty shall substitute damages and interest in cases of noncompliance, unless otherwise stipulated. Damages are still owed if the obligor refuses to pay the penalty or acts fraudulently. The penalty can only be enforced according to the Code's provisions. The debtor cannot exempt themselves from obligation by paying the penalty, unless this right is expressly reserved. The creditor cannot demand both fulfillment and satisfaction of the penalty simultaneously, unless this right is clearly granted. However, if performance becomes impossible after the creditor demands fulfillment, the penalty may still be enforced. Proof of actual damages is not needed to demand the penalty. The judge may equitably reduce

Uploaded by

GERBGARCIA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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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)
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)
Art. 1228. Proof of actual damages suffered by the creditor is not necessary in order
that the penalty may be demanded. (n)
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)
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)

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