Alternative Obligations (Arts. 1199-1206) (1)

Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

CHAPTER 3, SECTION 3 – ALTERNATIVE OBLIGATIONS (Articles 1193-1198) 1. There are two (2) kinds of obligations according to object or prestation : (A) SIMPLE obligation – There is only one (1) prestation.

D promised to deliver to C a 2010 model BMW car . only 1 prestation

(B) COMPOUND obligation – There are two (2) or more

prestations. Compound obligations are of two (2) kinds : (B.1) CONJUNCTIVE obligation – There are several prestations, and all of them are due. D promised to deliver to C a 2010 model BMW car and a dump truck . 2 prestations

(B.2) DISTRIBUTIVE obligation – There are several prestations, but only one or some of the prestations are due. The two (2) kinds of distributive obligations are :

 ALTERNATIVE – There are several prestations due to the creditor, but the performance by the debtor of any one of the prestations is sufficient compliance with the obligation. (Article 1199) D promised to deliver to C either a BMW car, a Jaguar or a Mercedez Benz. 3 alternative prestations to choose from

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Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

 FACULTATIVE – There is only one prestation due to the creditor, but the debtor may perform another prestation to substitute the original prestation. (Article 1206, par. 1) D promised to deliver to C a BMW, but D may deliver a Jaguar as a substitute . original prestation

substitute

prestation

2. To whom is the right of choice given in an alternative obligation? In other words, since there are several prestations due, who will choose which prestation is to be performed by the debtor? 

As a general rule, the right to choose the alternative belongs to the DEBTOR. (Article 1200, par. 1) EXAMPLE

A: On March 15, promised Kim that he her on December 15, Siamese cat, a bulldog,

2010, Gerald will deliver to 2010 either a or a tarsier.

 Since the obligation does not say to whom the right of choice is given, the debtor Gerald has the right of choice. Gerald can decide which among the alternative prestations he will deliver to Kim on December 15, 2010. If Gerald chooses and delivers to Kim a bulldog, the obligation will now be extinguished. Kim cannot insist that Gerald deliver the Siamese cat because the right of choice has not been given to the creditor. 

What are the limitations on this preferential right of the debtor to choose the alternative prestation in an alternative obligation?

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Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

(A) The creditor may exercise the right to choose the alternative prestation if the right is given to the creditor by express agreement of the parties. (Articles 1200, par. 1 & 1205)  In EXAMPLE A above, Gerald and Kim may agree that Kim will be the one to choose the alternative prestation. If Kim informs Gerald that she wants the Siamese cat, Gerald must deliver the Siamese cat on December 15, 2010. If Gerald delivers the bulldog, the obligation will not be extinguished and Kim can still demand for the delivery of the Siamese cat. (B) The debtor must choose, and completely perform, only ONE alternative prestation. He cannot choose part of one prestation and part of another prestation. (Article 1199, par. 2) EXAMPLE

B: On March 15, 2010, David promised Sarah that he will deliver to her on December 15, 2010 either 1000 sacks of dinorado rice worth P250,000, P250,000.00 in cash, 20 kilos of shabu, a mermaid from the pacific ocean, or an owner-type assembled jeepney.

 David cannot deliver to Sarah 500 kilos of dinorado rice and P125,000.00 in cash. Sarah can refuse to accept the delivery even if the total value of the delivery amounts to P250,000 – one of the alternative prestations. David has to choose only one of the alternative prestations, and he must compeletely perform the chosen prestation.

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Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

(C) The debtor cannot choose those prestations which are impossible, unlawful, or which could not have been the object of the obligation. (Article 1200, par. 2)  In EXAMPLE B above, David can choose from among any of the alternative prestations. However, David cannot choose to deliver 20 kilos of shabu because it is an unlawful prestation. Neither can he choose to deliver to Sarah a mermaid from the pacific ocean because it is a physically impossible prestation.

(D) The choice of the alternative prestation to be performed will produce legal effect only from the time it is communicated to the other party. (Article 1201)  The debtor must choose, and communicate his choice to the creditor. After the debtor has chosen the alternative prestation he wishes to perform, he must inform the creditor which among the alternative prestations he will perform.  After the debtor communicates to the creditor his choice of the alternative prestation to be performed, the alternative obligation will now be converted into a simple obligation with only one prestation which is due for performance on the maturity date of the obligation.  In EXAMPLE A above, Gerald informs Kim on May 30, 2010 that what he will deliver to her on December 15, 2010 is the tarsier. As of May 30, 2010, the alternative obligation becomes a simple obligation with only one prestation which the debtor is obliged to deliver on December 15, 2010 – the delivery of the tarsier.  Remember that it is not required that the creditor give his consent to the choice made by the debtor. The debtor’s 4

Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

right of choice would be rendered useless if he was to get the creditor’s approval of what alternative prestation to choose. (E) The debtor loses his right of choice when only one alternative prestation is practicable of performance. (Article 1202)  Assume in EXAMPLE A above that the Siamese cat and the tarsier both died on the occasion of a tsunami on November 2, 2010. This is a case when only one alternative prestation is left to be performed by the debtor. The effect is the alternative obligation is converted into a simply obligation with only one prestation. The debtor Gerald will have no other choice but to deliver to Kim the only remaining prestation (the bulldog) on December 30, 2010. 3. ARTS. 1204 & 1205. – What are the effects of the loss or impossibility of the alternative prestations BEFORE the right of choice is exercised?  Once the debtor has communicated his choice of the alternative prestation to be performed to the creditor, the obligation becomes simple. If the chosen alternative is lost without the fault of the debtor, the obligation will be extinguished (Article 1174). If the chosen alternative is lost due to the fault of the debtor, the obligation will be converted into monetary consideration in the form of damages (Article 1170).  What will be the effect then if one or some of the alternative prestations in the alternative obligation are lost before the debtor has communicated his choice to the creditor? The consequences will really depend upon whether the right of choice was given to the debtor or to the creditor. 5

Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

(A)

(1)

When the right of choice belongs to the DEBTOR If the loss is due to a FORTUITOUS EVENT

(a) If all the alternative prestations are lost, the

alternative obligation is extinguished. 1174)

(Article

(b) If two or more of the alternative prestations

remain, the debtor can still exercise his right of choice and choose from any of the remaining alternatives. (Article 1200) (c) If only one of the alternatives remain, there is no

more alternative obligation but only a simple obligation. The debtor has no choice but to perform the remaining prestation. (Article 1202) (2)

If the loss is due to the DEBTOR’S FAULT (a) If all the alternative prestations are lost, the

alternative obligation is converted into monetary consideration as indemnity for damages. The basis for the computation of the amount to be paid by the debtor will be the value of the last thing or service lost plus damages. (Article 1204, pars. 1 & 2) (b) If two or more of the alternative prestations

remain, the debtor can still exercise his right of choice and choose from any of the remaining alternatives. (Article 1200, par. 1) NOTE: Even if the loss of the other alternatives were due to the debtor’s fault, the debtor will not be liable for damages since he has the right of choice and the obligation can still be performed. This is an exception to the general rule established 6

Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

in Article 1170 regarding liability for damages arising from negligence. (c) If only one of the alternatives remain, there is no

more alternative obligation but only a simple obligation. The debtor has no choice but to perform the remaining prestation with NO liability for damages. (Article 1202)  Illustrative example and application of the rules in Articles 1204 & 1205. When the right of choice belongs to the

(B)

CREDITOR (1) If the loss is due to a FORTUITOUS EVENT – The effects are the same as where the right of choice belongs to the debtor. (2) If the loss is due to the DEBTOR’S FAULT (a) If all the alternative prestations are lost, the

alternative obligation is converted into monetary consideration as indemnity for damages. The basis for the computation of the amount to be paid by the debtor will be the value of any of the objects chosen by the creditor (because he is given the right of choice) plus damages. (Article 1205, par. 2[3]) (b) If two or more of the alternative prestations

remain, the obligation is still alternative. creditor has the option to either: (b.1.) choose alternatives; OR

from

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among

the

The

remaining

Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

(b.2.) choose the lost object. The debtor will then be liable for the value of the lost object chosen by the creditor plus damages. (Article 1205, par. 2[2]) NOTE 1: When the right of choice belongs to the creditor, and the loss is due to the debtor’s fault, the debtor is liable for damages because the creditor was deprived of his right to choose. NOTE 2: In all cases, there is NO communication of the choice made. If there was already a communication, there is no more alternative obligation. The above rules will no longer be applicable.

4. ART. 1206.  In facultative obligations, there is only one prestation due to the creditor, but the debtor may perform another prestation to substitute the original prestation. (Article 1206, par. 1)  In facultative obligations, the right of choice belongs ONLY to the DEBTOR (Article 1206, par. 1). Once the substitution is made, the obligation is converted into a simple one to deliver or perform the substituted prestation.  The substitution also becomes effective only from the time the debtor communicates to the creditor his choice to perform the substitute prestation. (Article 1201)  BEFORE substitution, the debtor is not liable if the substitute prestation is lost whether due to his fault or to a fortituitous event. This is because what is due before substitution is the original prestation. If the original prestation is lost by virtue of a fortuitous event, the obligation is 8

Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

extinguished. If the original prestation is lost due to the debtor’s fault, he will be liable for damages to the creditor.  AFTER substitution, the debtor is not liable if the original prestation is lost whether due to his fault or to a fortituitous event. This is because what is due after substitution is already the substitute prestation. If the substitute prestation is lost by virtue of a fortuitous event, the obligation is extinguished. If the substitute prestation is lost due to the debtor’s fault, he will be liable for damages to the creditor.

NOTE: For lack of material time, I will be sending the groupings for the special project tomorrow. Please keep posted. Thank you.

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