SECTION 5:

Divisible and Indivisible Obligations

Article 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)

Divisible Obligation
Is one the object of which, in its delivery or performance,
is capable of partial fulfillment.

Indivisible Obligation
Is one the object of which, in its delivery or performance,
is capable of partial fulfillment.

Applicability of Article 1223
While Article 1223 appears to be limited to real obligations
because it speaks of things, the word is used in its broad sense as
referring to the object or prestation of the obligations, which may be
to deliver a thing or to render some service.

* Kinds of Division *
1. Qualitative Division or one based on quality, not on number or
quantity of the things which are the object of the obligation.
2. Quantitative Division or one based on quantity rather than on
quality.
3. Ideal or Intellectual Division or one which exists only in the
minds of the parties.
Ex. A car was inherited by A and B. As co-owners, their one-half
shares in the car are not separable in a material way but only
mentally.

* Kinds of Indivisibility *
1. Legal Indivisibility where a specific provision of law declares as
indivisible, obligations which, by their nature, are divisible (Art.
1225, par. 3)
2. Conventional Indivisibility where the will of the parties makes
as indivisible, obligations which, by their nature, are divisible.
3. Natural Indivisibility where the nature of the object or
prestation does not admit of division.

Where there is only one creditor and one debtor.
The provisions of Chapter 2, Title 1, regarding the Nature
and Effects of Obligations in general (Arts. 1163 to 1178.) are also
applicable to divisible or indivisible obligations. They contemplate
obligations involving only one creditor and only one debtor. Since
divisibility or indivisibility refers to the object or prestation, it does
not alter or modify said provisions.

When there is only one creditor and one debtor, the latter
has to perform the obligation in its totality, whether or not the
prestation is divisible. Unless there is an express stipulation to that
effect.

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 value of the service in which the
obligation consists.
Effect of non-compliance by a debtor in a joint indivisible
obligation.
If any one of the debtors does not comply with his
undertaking in a joint indivisible obligation, the obligation is
converted into one for damages. The creditor cannot ask for specific
performance or rescission because there is no cause of action
against the other debtors who are willing to fulfill their promises.
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 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.

* Obligations deemed Indivisible *
1. Obligations to give definite things.
2. Obligations which are not susceptible of partial performance.
3. Obligations provided by 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.

* 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 the accomplishment of
work by metrical units.
3. Obligations which by their nature are susceptible of partial
performance.

Divisibility or Indivisibility in obligations not to do.
In negative obligations not to do, the character of the
prestation in each particular case shall determine their divisibility or
indivisibility.
Indivisible Obligation (Continuously)
Divisible Obligation (Not Continuous)

SECTION 6:
Obligations with a Penal Clause

Article 1226
In obligations with a penal clause, the penalty shall
substitute the indemnity for damages and the payment of interests
in case of non-compliance, 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.

Principal Obligation
Is one which can stand by itself and does not depend for
its validity and existence upon another obligation.

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.

Penal Clause
Is an accessory undertaking attached to an obligation to
assume greater liability in case of breach.

* Purposes of Penal Clause *
To ensure their performance by creating an effective deterrent
against breach, making the consequences of such breach as
onerous as it may be possible.
To substitute a penalty for the indemnity for damages and the
payment of interests in case of non-compliance or to punish the
debtor for the nonfulfillment or violation of his obligation.

* Penal clause vs. Condition *
The first constitutes an obligation although accessory while the
latter does not; and
Therefore, the former may become demandable in default of
the unperformed obligation and sometimes jointly with it,
while the latter is never demandable.

* Kinds of Penal Clause *
As to its origin:
Legal penal clause when it is provided by law.
Conventional penal clause when it is provided for by
stipulation of the parties.
As to its purpose:
Compensatory penal clause when the penalty takes the place
of damages.
Punitive penal clause when the penalty is imposed merely as
punishment for breach.
As to its demandability or effect:
Subsidiary or alternative penal clause when only the penalty
can be enforced; and
Joint or cumulative penal clause when both the principal
obligation and the penal clause can be enforced.

Penalty substitutes for damages and interests.
As a general rule, in an obligation with a penal clause, the
penalty takes the place of the indemnity for damages and the
payment of interests in case of non-compliance. Proof of actual
damages suffered by the creditor is not necessary in order that the
penalty may be enforced.

When creditor may recover damages.
When so stipulated by the parties
When the obligor refuses to pay the penalty in which case the
creditor may recover legal interest thereon
When the obligor is guilty of fraud in the fulfillment of the
obligation, in which case the creditor may recover damages
caused by such fraud.

When penalty may be enforced
The penalty may be enforced only when it is demandable
in accordance with the provisions of the Civil Code. This means that
the penalty, as a stipulation in a contract, is demandable only if
there is a breach of the obligation and it is not contrary to law,
morals, good customs, public order, or public policy.
Thus, if the obligation cannot be fulfilled due to a
fortuitous event, the penalty is not demandable. Under Article 1229,
the penalty may be reduced if it is iniquitous or unconscionable on
in case there is partial or irregular fulfillment.

Article 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 the 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.

Penalty not substitutes for performance.
Generally, the debtor cannot just pay the penalty instead
of performing the obligation. Precisely, the purpose of the penalty is
to secure compliance with his obligation. If the debtor is allowed to
pay the penalty, this would in effect make the obligation alternative
one.
The debtor can exempt himself from the non-fulfillment of
the obligation only when this right has been expressly reserved for
him

* Penal clause presumed subsidiary *
When there is performance Once the obligation is fulfilled,
this purpose is attained and, therefore, there is no need for
demanding the penalty.
When there is no performance In case of non-compliance,
the creditor may ask for the penalty or require specific
performance.
When penal clause joint
The debtor has the right to pay penalty in lieu of
performance only when this right has been expressly reserved for
him.

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

Penalty demandable without proof of actual damages.
The creditor may enforce the penalty whether he suffered
damages or not. But he cannot recover more than the stipulated
penalty even if he proves that the amount of his damages exceeds
the penalty.

Damages recoverable in addition to penalty must be proved.
Art. 1228 applies only where the penalty is fixed by the
parties to substitute the indemnity for damages.
In any of the three exceptions when damages may be
recovered in addition to the penalty, the creditor must prove the
amount of such damages which he actually suffered resulting from
the breach of the principal obligation.

Article 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.

* When penalty may be reduced by the courts *
When there is partial or irregular performance.
When the penalty agreed upon is iniquitous or unconscionable.

Article 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.

Effect of nullity of the penal clause
If only the penal clause is void, the principal obligation
remains valid and demandable.

Effect of nullity of the principal obligation
If the principal obligation is void, the penal clause likewise
void.

Farah T. Nami