LECT 4

SECTION 5. - Divisible and Indivisible Obligations

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)

= the nature and effects of obligation as previously discussed will apply whether or not the
obligation is indivisible or divisible.

= DIVISIBILITY – refers to the susceptibility of an obligation to be performed partially. Ex.

Obligation to deliver 100 sacks of rice or a particular type (can be 50 sacks first then the
remaining will follow)
= INDIVISIBILITY – refers to the non-susceptibility of an obligation to partial performance. Ex.
Obligation to deliver a particular computer set.
= If a thing could be divided into parts and as divided, its value is impaired
disproportionately, that thing is INDIVISIBLE. (in the example, even if the computer is
made of several parts, if one part is missing, it will not work the same way)

Art. 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. (1150)

= JOINT INDIVISIBLE OBLIGATION – This one refers to an obligation where the object is
indivisible but the liability of the parties is joint.

= There are several debtors. If one of the debtors was not ready or did not comply with the
obligations, the unfulfilled obligation is converted into a monetary obligation which is not
divisible. Each of the Innocent debtors will pay the equivalent amount of his portion in the
obligation, while the guilty debtor will be liable for damages in addition to the amount of his
portion.

= Example, A, B, C jointly obliged themselves to deliver possession of a house to D on

November 10, 2018. Come Nov. 10, A and B were ready to vacate the house but C refused to
leave. IF obligation is converted in cash (whereas, possession of the house is equivalent to
60,000) A and B will pay 20,000 each while C will pay 20,000 plus damages. C will be liable to
pay the damages.

Art. 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 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.

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.

In obligations not to do, divisibility or indivisibility shall be determined by the character of the
prestation in each particular case. (1151a)

The following are considered INDIVISIBLE obligations:

1. Obligation to give definite things
2. Obligations which cannot be partially performed
3. Even though the object or service may be physically divisible, it is indivisible if:
a. the law so provides
b. when the parties intended it to be indivisible

The following obligations are deemed DIVISIBLE:

1. When the object of the obligation is the execution of a certain number of days of work
2. When the object of the obligation is the accomplishment of work measured in units
 3. When the object of the obligation is susceptible of partial compliance
4. When the object of the obligation is such that the debtor is required to pay in installments

= If the contract is divisible, and a part of it is illegal, the illegal part is void, and the rest shall be valid
and enforceable.

= If the contract is indivisible, and a part of it is illegal, the entire contract is void.

= Partial performance of an indivisible obligation is tantamount to non-performance.

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)

PENALTY CLAUSE is an accessory obligation attached to the principal obligation, which imposes an
additional liability in case of breach of the principal obligation.
= It pushes the debtor to perform his obligation faithfully and without delay – within the period agreed
upon, or else, he suffers a fixed civil penalty without need of proving the damages of the other party.

The penalty imposable is a substitute for the indemnity for:

a. damages
b. payment of interest in case of breach of obligation

*unless the contrary is stipulated!

EXCEPTIONS – additional damages may be recovered from the following acts:

1. If the debtor refuses to pay the penalty
2. If the debtor is guilty of fraud in the fulfillment of the obligation
3. If there is express stipulation that the other damages or interests are demandable to the
penalty in the penal clause

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)

 A debtor cannot evade from payment of his principal obligation by choosing to pay the penalty
stipulated, except when the debtor is EXPRESSLY granted with the right to substitute the penalty
for the principal obligation. – an obligation with penalty clause cannot be turned to facultative
obligation unless expressly stipulated in the contract.

 The creditor cannot demand the stipulated fulfillment of the principal obligation and the penalty
at the same time, except
a. when the creditor was clearly given the right to enforce both the principal obligation and
penalty;
b. when the creditor has demanded fulfillment of the obligation but cannot be fulfilled due to the
1. debtor’s fault – creditor may demand for penalty
2. creditor’s fault – he cannot claim the penalty
3. fortuitous event – principal obligation and penalty are extinguished

Art. 1228. Proof of actual damages suffered by the creditor is not necessary in order that the
penalty may be demanded. (n)

a. As long as the agreement or contract is breached.

 b. The mere non-fulfillment of the principal obligation entitles the creditor to the penalty stipulated.
c. The purpose of the penalty clause is precisely to avoid proving damages.

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)

JUDICIAL REDUCTION OF PENALTY

 Principal obligation – partly complied with by the debtor (but not in indivisible obligation,
because it is tantamount to non-compliance)
 Principal obligation – complied not in accordance with the tenor of the agreement (refers to
irregular performance)
 Penalty – iniquitous or unconscionable

 Judge’s power to reduce penalties are limited to private contracts.

INIQUITOUS OR UNCONSCIONABLE – when it is revolting to the conscience or common sense;

grossly disproportionate to the damages suffered.

PENALTY NOT ENFORCEABLE:

1. Impossible performance of principal obligation due to fortuitous events
2. Creditor prevented the debtor from fulfilling the obligation
3. Penalty is contrary to good morals or good customs
4. Both parties are guilty of breach of contract
5. Breach of contract by the creditor
6. None of the parties committed any willful or culpable violation of the agreement

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)

Because the penal clause is only an accessory to the principal obligation, it cannot exist alone.
If the penal clause is void, the principal obligation remains enforceable.
The nullity of penal clause does not mean the nullity of the principal.
For example: In case of non-payment of P10,000, P1,000 per day as penalty shall be imposed. It is a void
contract but it is not an excuse that you don't have to pay the principal which is P10,000.