DEC. 05, 2013 Essential differentiation obligation.

of ALTERNATIVE and FACULTATIVE

The NUMBER of object or prestation. o Alternative: several objects are due and demandable. o Facultative: only one object is due and demandable, The choice is upon the discretion of the DEBTOR. A and B agreed that A will deliver his car. If he cannot deliver his car on the agreed date, he will deliver his motorcycle instead. One day before the agreed date, the car was lost by caso fortuito. Can B legally demand the delivery of the motorcycle? o FACULTATIVE: there is only one object due. o NO, B cannot legally demand the delivery of the object, as the obligation has already been extinguished. A obliged himself to deliver either Object 1, Object 2 or Object 3 on Dec. 1. What kind of obligation is that? o ALTERNATIVE: several objects are due. o On Dec. 1, A brought on Dec. 1 Object 1 and tendered it to B. Can A legally insist on the delivery of Object 1? YES. The debtor has the right of choice in the absence of any stipulations to the contrary. Can the right be granted to the creditor in a facultative obligation? o NO. Only in alternative obligation can the right be granted to anyone besides the debtor (e.g. to the creditor). A obliged himself to deliver either Object 1, Object 2 or Object 3 on Dec. 1. Then Object 1 was lost because of caso fortuito. Can the debtor be held liable? o NO, the debtor will not be liable. A obliged himself to deliver either Object 1, Object 2 or Object 3 on Dec. 1. Then Object 1 was lost because of the debtors fault. Can the debtor be held liable? o NO. There are still 2 other objects that can be delivered. o The debtor will simply select Object 2 or 3. o There is no basis for making the debtor liable. A obliged himself to deliver either Object 1, Object 2 or Object 3 on Dec. 1. Then all three objects were lost because of the debtors fault. Can the debtor be held liable? o YES. It is now impossible for him to comply with the obligation. o In the determination of the amount of damages, its basis is the value of the last object which was lost. o RATIO: it was still possible for him to comply with the obligation when he still has that last object. Only upon the loss of the remaining object that will make him liable. A obliged himself to deliver either Object 1, Object 2 or Object 3 on Dec. 1. If the right of choice now belongs to B (creditor), and then Object 1 was lost through caso fortuito, can A (debtor) be liable? o NO. B (creditor) can still select the delivery of Object 2 or 3. A obliged himself to deliver either Object 1, Object 2 or Object 3 on Dec. 1. If the right of choice now belongs to B (creditor), and then Object 1 was lost through the fault of the debtor, can A (debtor) be liable? A has a choice: 1. Select the delivery of Object 2 or 3. 2. Select Object 1, with indemnity for damages. If A chooses Object 2, can he receive damages? o NO, the obligation to deliver Object 2 can still be complied with. o It is only is the creditor has been given the right of choice and his choice was lost due to the fault of the

debtor can he recover the value of the lost thing with damages. When all objects were lost due to the fault of the debtor, then A can recover: the value of any one of them + damages. o If they were lost through caso fortuito, then B is released from the obligation / the obligation will be extinguished. Assume that A and B agreed on the delivery of specific and determinate objects: 1, 2, 3 on Dec. 1. On Nov. 27, we met, and A said he will deliver Object 1 on Dec. 1. On Nov. 29, Object 1 was lost. On Dec. 1, can B legally demand the delivery of Object 2 instead? NO. o Upon the communication of the choice of the debtor, the obligation already becomes simple. The loss of the object extinguishes the obligation. o Once a choice has been made, the legal effect of that is that the obligation ceases to be alternative. A and B entered into a contract where either A will build Bs two-storey house in Angeles City or his swimming pool in San Fernando City. Bs lot was expropriated by the government because of the road construction. What is the effect of such? o The right of choice of B is lost. o Only one option is practicable, which is to build the swimming pool. A and B entered into a contract where either A will build Bs two-storey house in Angeles City or his swimming pool in San Fernando City. B then sold his lot in Angeles City to C. what is the effect? o B would have been prejudiced as he will be left of no other choice than to build the pool. o What are the rights of B? 1. Either choose to build the swimming pool, OR 2. The rescission of the contract with the recovery of damages.

SOLIDARY OBLIGATION: where each creditor is bound to the entire credit, and each of the debtors is bound to the whole debt. A, B, C are indebted to X for an amount of P12,000. Joint or solidary obligation? o JOINT. There was no express stipulation of the solidary nature of the debt. o Can X collect the entire amount from A alone? NO. A only has a proportionate share of P4,000 from the whole debt. o When parties (debtors) are jointly bound: KKB (kanya kanyang bayad ). A, B, C are jointly and severally indebted to X for an amount of P12,000. How much can X collect to A? o The entire amount (P12,000). o Individually and collectively. What if, in the promissory note, it contains: I promise to pay X. Signed, A B C? o SOLIDARY OBLIGATION: due to use of the singular I. A, B, C bound themselves to deliver an indivisible object, a car, to X. o The car cannot be partially delivered. o It is not susceptible of partial performance / delivery. o Can the parties be jointly bound? YES. It does not follow that the object is indivisible that the obligation automatically becomes solidary. In the absence of any express stipulation of the contrary, it is presumed to be joint (indivisible). In other words, if A, B, and C obligated themselves to deliver a particular horse worth P12,000 to X and Y.

Since the contract is silent, or there is no express stipulation that it is solidary or provision of law, it does not matter if the object is indivisible or not. o JOINT INDIVISIBLE OBLIGATION: does not make the obligation solidary. DEBETABLE: Can X acting alone compel A, B and C to comply? Cannot X act on behalf of Y?

Theoretically, can A be made liable to all of the debt? YES. But here, X cannot represent Y.

INCHAUSTI & CO. VS YULO (solidarity) A X Co. B C D E F P200,000 Debt is supposed to be paid in instalments with an acceleration clause. They failed to pay the first instalment, so the entire payment became demandable. X Co. then proceeded to demand payment from A while B, C, and D talked to X Co. X Co. agreed for the extension of their payment and a partial remission of the debt (P120,000). ISSUE: what effect, if any, will the agreement affect the case of X Co. against A? ANSWER: The extension of payment to B, C and D will also benefit A. How? He can only be held responsible of his and E and Fs shares because B, C, and Ds shares were not yet due. Half of debt (3/6) can only be made accountable to X Co., as of now. What is the amount A has to pay? P60,000 only. The partial remission of debt is also beneficial to all the debtors. We have to wait for the period and for the maturity of B, C, and Ds share before the full amount can be demanded.

If an act is beneficial, rather than prejudicial, can a single creditor act on behalf of creditors? TWO VIEWS.

MANRESA: Since Art. 1209 merely provides that the right of the creditors may be prejudiced only by their collective acts, it can, therefore, be inferred that should the act of a joint creditor be per se beneficial to the others, as for instance the interruption of the period of prescription, the act of one would be sufficient.

TOLENTINO: the basic underlying principle of joint and solidary obligation. In solidary, there is mutual representation. Creditor can act on behalf of others. In a joint obligation, none of the parties can represent the others. They must act together and proceed to the joint debtors. Otherwise, an act of one creditor alone is legally inefficacious.

More logical explanation. X and Y demanded a delivery of a particular object from A, B and C and the object was not delivered through the fault of C. Can X and Y recover the entire value of the object to C alone? o NO. In joint obligations, the debt is presumed to be equally and proportionally divided. o X and Y can only recover from C his [1] share of the debt and [2] damages. o If C turns out to be insolvent, then A and B are not liable for the payment of his share. All X and Y can do is to hope and pray that C will earn money. A, B, C obliged themselves to pay P12,000 to X and Y: JOINT OBLIGATION. o How many obligations in total are there? SIX. o A is obliged to pay P2,000 to X and P2,000 to Y. B is obliged to pay P2,000 to X and P2,000 to Y. C is obliged to pay P2,000 to X and P2,000 to Y. -

MANRESA: C may collect the entire amount to any solidary debtors minus the shares of the others shares that are not yet due. ART. 1213 A solidary creditor cannot assign his rights to another. PRINCIPLE: MUTUAL AGENCY AND REPRESENTATION. o A solidary creditor can act on behalf of his co-creditors. His acts are actually binding and the co-creditors might be prejudiced by acts of the solidary creditor. o If the act in in favour of his co-creditors, the law can assume trust and confidence exist in solidary creditors. What is the solidary creditor assigns his rights to a third person? The law doesnt answer that. o The parties might not accept such (Art. 5: Acts executed against the provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their validity). o JBL Reyes: it will be better if the law makes the creditor subsidiarily liable.

MIXED OBLIGATION: there is solidarity on either part of the debtor or of the creditor. A X B Y C D JOINT SOL. P12,000

ART. 1214 How much X, acting alone can collect from A? P3,000. Theoretically, can X collect the entire debt? YES. But the maximum liability is P3,000 only, his share of the debt. A X B Y C D SOL. JOINT P12,000 Example: X demands payment from A alone, even though there are other solidary debtors (B, C, D) and solidary creditors (Y). o EFFECT: if A wants to pay, he should pay to X only. o Can D pay Y? Yes, he can as there had been NO DEMAND (thus, not bound by 1214). o Supposing X went after A alone, but A pays to Y instead of X, what is the consequence? Y who has received payment, which is a VALID PAYMENT, must give to X his corresponding share.

How much can X acting alone collect from A? P6,000. ART. 1215: PRINCIPLE OF MUTUAL AGENCY

NOVATION: X and Y are to receive a particular ring that is worth P12,000 from A, B, C and D. X alone entered to an agreement that the debtors will instead deliver a particular bracelet worth P24,000. When the agreed date of delivery came, Y is now demanding the delivery of the ring. Can Y legally compel A, B, C and D to do so? o NO. Even though Y was not aware of the changes, due to mutual representation, X can bind Y to the new / substitute obligation. o Once the bracelet is delivered, how much is Ys interest / share? of the P24,000 = P12,000. o If the thing substituted (bracelet) is worth less, he gets of the P12,000 (value of the original object) = P6,000. o MORAL OF THE STORY: A solidary creditor who does not participate in the novation shares the benefits, but not the losses. COMPENSATION (quits). o A owes you P10,000 and you owe A P10,000, both payments due and demandable. o TOTAL COMPENSATION: both amounts are the same. o PARTIAL COMPENSATION: if they are not the same, only on concurrent amount. A B C D P12,000 o X Y

NO. The remission of the debt if gratuitous. Di mo siya pwedeng pagkakitaan. RESULT if yes: unjust enrichment. X does not condone the entire debt but only As (P3,000). Is that valid? YES. Effect: the debtor A is completely released from X and Y but he is still bound by his ties of co-solidarity. The P3,000 will be condoned so the maximum amount that can be collected is P9,000. A is still liable by his co-debtors. If B pays the P9,000, he can claim reimbursement from C and D. IF D becomes insolvent, the continuing liability of A comes in. The P3,000 that D cannot pay will be borne by A, B, and C.

X compelled A to pay P12,000 (the entire amount). Let us assume that under a different transaction, X became indebted to A for P12,000 and both debts became demandable LEGAL COMPENSATION. The result: the obligation was completely distinguished, but that is not the end of the story. 1. 2. A can demand reimbursement from B, C, and D. Y can ask for reimbursement from X.

CONFUSION: when one and the same person becomes the creditor and the debtor of the same obligation. A B C D P12,000 X Y

X and Y were brothers and they both perished in an accident. It turns out that their nearest relative is A. o The entire estate of X and Y now goes to A. o RESULT: A is both a creditor and a debtor. o A can demand reimbursement from B, C, D but the obligation of A to X and Y is now extinguished. REMMISSION A B C D P12,000 X Y

X happens to be interested to the sister of A and condone the entire debt. Can A demand reimbursement from B, C, and D?