1223. DIVISIBLE OBLIGATION - an object in which performance or delivery is capable of partial fulfillment.

Obligation to deliver 100 sacks of rice or a particular typeINDIVISIBLE OBLIGATION – object which its delivery and performance is not capable of partial fulfillment.

Obligation to deliver a particular computer set

To determine whether it is divisible or indivisible, look at the intention of the parties. Even though the object or service may be physically divisible, it is indivisible if so provided by law or intended by the parties. If the object is not physically divisible or the service is not susceptible to partial performance, the obligation is always indivisible, the intention of the parties to the contrary notwithstanding. (Rule is absolute)An obligation is presumed indivisible where the only one creditor and only one debtor.If a thing could be divided into parts and as divided, its value is impaired disproportionately, that thing is INDIVISIBLE.

Kinds of Division+ Qualitative division – based on quality, not on number or quantity of the things w/c are the object of the obligation. Ex: inheritance of heirs+ Quantitative division – based on quantity rather than on qualityEx. Cavans of palay, 10000 cash+Ideal or intellectual – which exists in the minds of the partiesEx. Co-ownership

Kinds of indivisibility+ Legal indivisibility – specifiygc provision of law declares as indivisible+ Conventional – will of the parties makes a indivisible+ Natural – nature of the object or prestation does not admit of division

1224.JOINT INDIVISIBLE OBLIGATION – the object is indivisible but the liability of the parties is joint.

The unfulfilled undertaking (duty) is converted into a monetary obligation which is no divisible.

The guilty debtor is liable for damages.

1225. The following are considered INDIVISIBLE obligations:

1. Obligation to give definite things (ex: specific house)2. Obligations which are not susceptible of partial

performance (ex: sing a song; dance)3. Even though the object or service may be physically

divisible, it is indivisible if:a. the law so provides (ex: taxes)b. when the parties intended it to be indivisible (ex:

to give 1000 on a certain date)

The following obligations are deemed DIVISIBLE:1. When the object of the obligation is the execution of a

certain number of days of work (ex: paint a house)2. When the object of the obligation is the accomplishment of

work measured in units (make a table)3. When the object of the obligation is susceptible of partial

compliance (ex: to teach)4. When the object of the obligation is such that the debtor is

required to pay in installments--- Obligation to do and not to do are generally indivisible. Indivisible (not to do) – continuous (ex. Not sell cigarettes for a year)Divisible (not) – forbearance is not continuous (not sell on holidays)

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.

1226. Principal obligation – can stand by itself and does not depend for its validity and existence upon another obligationAccessory obligation – attached to a principal obligation, cannot stand aloneObligation w/ a penal clause –w/c contains an accessory undertaking to pay a previously stipulated indemnity in case of breach.

PENAL CLAUSE - this is an accessory obligation attached to the principal obligation, which imposes an additional liability in case of breach of the principal obligation.Purposes- to insure performance by creating an effective deterrent against breach. (general purpose) **reparation- to substitute a penalty for the indemnity for damages and the payment of interest in case of non-compliance. **punishment

^^Penal clause constitutes an obligation although accessory; condition does not. Penal clause may become demandable in default of the unperformed obligation and sometimes jointly with it; condition is never demandable.Legal penal clause – provided by lawConventional penal clause – by stipulation of partiesCompensatory penal clause – penal takes place of damagesPunitive penal clause – imposed merely as punishment for breachSubsidiary or alternative penal clause – only the penalty can be enforcedJoint or cumulative penal clause – both the principal and penal clause can be enforcedGR: penalty takes the place of the indemnity for damages and the payment of interests in case of non-compliance

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. damagesb. 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 penalty2. If the debtor is guilty of fraud in the fulfillment of

the obligation3. If there is express stipulation that the other

damages or interests are demandable to the penalty in the penal clause

Penalty may be enforced only when it is demandable, only if there is a breach of the obligation and not contrary to law, etc. If the obligation can’t be fulfilled due to a fortuitous event, the penalty is not demandable.

1227. GR: the debtor cannot just pay the penalty instead of performing the obligation.If the debtor is allowed to pay the penalty this would in effect make the obligation an alternative one.

The debtor can exempt himself from non-fulfillment of the obligation only when this right has been expressly reserved for him.

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.

GR: The creditor cannot demand the stipulated fulfillment of the principal obligation and the penalty at the same time1. Where there is performance – once the obligation is fulfilled, there is no need for demanding the penalty except when the creditor was clearly given the right. GR: penal clause is subsidiary and not joint.2. Where there is no performance – the creditor may ask for the penalty or require specific performance. Remedies are alternative, not cumulative nor successive. If there was fraud on debtor, creditor may recover the penalty as well as damages for non-fulfillment.---when the creditor has demanded fulfillment of the obligation but cannot be fulfilled due to the

a. debtor’s fault – creditor may demand for penalty

b. creditor’s fault – he cannot claim the penaltyc. fortuitous event – principal obligation and

penalty are extinguishedDebtor has the right to pay penalty in lieu of performance only when this right has been expressly reserved for him.For creditor, he has the right to demand performance and payment of penalty jointly when this right has been clearly granted him.

1228. As long as the agreement or contract is breached. There is

violation by the debtor. The mere non-fulfillment of the principal obligation entitles

the creditor to the extent of penalty stipulated. Creditor may enforce the penalty whether he suffered damages or not.

The purpose of the penalty clause is precisely to avoid proving damages.

1229. JUDICIAL REDUCTION OF PENALTY

1. Principal obligation – partly complied with by the debtor (but not in indivisible obligation, because it is tantamount to non-compliance)

2. Principal obligation – complied not in accordance with the tenor of the agreement

3. 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 events2. Creditor prevented the debtor from fulfilling the

obligation3. Penalty is contrary to good morals or good

customs4. Both parties are guilty of breach of contract5. Breach of contract by the creditor6. None of the parties committed any willful or

culpable violation of the agreement

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.

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.