WWW Law Activity 7 & 8

Jonathan C.
Balansag BSMA III
La Consolacion College BUSINESS LAW (BAC33)
Activity No. 7
Coverage: Article 1223 - Article 1225
I. Definitions
1. Divisible Obligation - is one the object of which, in its delivery or performance, is

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

not capable of partial fulfillment.
3. Legal Indivisibility - where a specific provision of law declares as indivisible,

obligations which, by their nature, are divisible (Art. 1225, par. 3.)
II. Discussion
1. Explain: The divisibility of an obligation is different from the divisibility of the

thing which is the object thereof.
- The divisibility of an obligation refers to performance of the prestation which

constitutes the object of the obligation, whereas the divisibility of the thing which
constitutes the object if the obligation refers to the prestation itself.
2. What obligations are deemed indivisible?
a. Obligations to give definite things
b. Those which are not susceptible of partial performance (Article 1225, par. 1)
c. Those so provided by law;
d. Those things which, though physically divisible, are intended by the parties to be
indivisible (Article 1225, par. 3).
3. What obligations are deemed divisible?
a. The execution of a certain number of days of work;
b. The accomplishment of work by metrical units;
c. Analogous things which by their nature are susceptible of partial performance

(Article 1225, par. 2)
d.When the purpose of the obligation is to pay a certain amount in installment.
III. Problems
1. A and B bind themselves to pay C their loan of 10,000 on a certain date. Is the
obligation divisible or indivisible? Explain.
- Indivisible. 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., as stated on the contract that A and B bind themselves to pay
C their loan P10,000 on a certain date.
2. A, B and C obliged themselves jointly to deliver to D a particular horse on a

certain date. The agreement among A, B and C which was made known to D is
that they will contribute the amount in buying the horse. The horse was not
delivered on the due date because of the failure of B to give his share of the
purchase price. State the rights and obligations of the parties.
Held: Art. 1224, the obligation to deliver the horse is converted into money
obligation, meaning, A, B and C will contribute the amount in buying the horse. A and C
are liable to give their shares. But, A and C are not liable for the share of B. On the
other hand, B is now indebted to D. Damages may be imposed against “B” the erring
debtor if warranted by the circumstances.
3. D finds himself to pay his loan of 10,000 in four equal monthly installments. Is
the obligation D divisible or indivisible? Explain.
Held: Divisible. Art. 1225 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, loans to be paid by installments are deemed divisible obligations. However,
each installment of P2,500 is indivisible.
Activity No. 8
Coverage: Article 1226-Art.1230
I. Definitions
1. 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.
2. Penal clause – is an accessory undertaking attached to an obligation to assume

greater liability on the part of the obligor in case of breach of the obligation, i.e., the
obligation is not fulfi lled, or is partly or irregularly complied with.
3. Joint penal clause – when both the principal obligation and the penal clause can be
enforced. (8 Manresa 215.)
II. Discussions
1. What are the purposes of incorporating a penal clause to an obligation?
- According to 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), they are:
(1) To insure their performance by creating an effective deterrent against breach,

making the consequences of such breach as onerous as it may be possible. (Yulo vs.
Chan Pe, 101 Phil. 134 [1957].) This is the general purpose of a penal clause; and
(2) To substitute a penalty for the indemnity for damages and the payment of interests
in case of non-compliance (Art. 1226.); or
(3) To punish the debtor for the non-fulfillment or violation of his obligation. A penal
clause functions to strengthen the coercive force of the obligation by the threat of
greater liability in the event of breach and to provide, in effect, for what would be the
liquidated damages resulting from such a breach. The obligor would then be bound to
pay the stipulated indemnity without the necessity of proof on the existence and on the
measure of damages caused by the breach. (Ligutan vs. Court of Appeals, 376 SCRA
560 [2002]; Guatengco vs. Reyes, 574 SCRA 187 [2008].)
2. In what cases may the debtor validly object to the enforcement of the stipulated
penalty?
- According to 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), debtor may object the enforcement of
penalty if there is performance on his part or if the creditor already required fulfillment of
obligation.
III. Problems
Explain or state briefly the rule or reason for your answer:
1. X promises to deliver to Y a specific horse. Their contract contains a penal

clause that in case of non-fulfillment, X shall pay a penalty of P10,000. X wants to
just pay the penalty instead of delivering the horse. Has Y the right to refuse to
accept the penalty in lieu of the horse? Explain.
Held: Yes. According to 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), X cannot exempt himself from delivering
the horse by paying the penalty, unless this right was reserved for him.
2. In the same problem, X was able to show that Y did not suffer any damage by
X’s violation of his obligation. Can Y still enforce the penalty?
Held: Yes. According to ART. 1228. Proof of actual damages suffered by the
creditor is not necessary in order that the penalty may be demanded. Y does not have
to prove that he suffered damages in order to demand the penalty. Since X violated the
obligation, Y can enforce the penalty.

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Jonathan C.

Balansag BSMA III

La Consolacion College BUSINESS LAW (BAC33)

Coverage: Article 1223 - Article 1225

1. Divisible Obligation - is one the object of which, in its delivery or performance, is

2. Indivisible Obligation - is one the object of which, in its delivery or performance, is

3. Legal Indivisibility - where a specific provision of law declares as indivisible,

1. Explain: The divisibility of an obligation is different from the divisibility of the

- The divisibility of an obligation refers to performance of the prestation which

2. What obligations are deemed indivisible?

a. Obligations to give definite things

c. Those so provided by law;

3. What obligations are deemed divisible?

a. The execution of a certain number of days of work;

b. The accomplishment of work by metrical units;

c. Analogous things which by their nature are susceptible of partial performance

2. A, B and C obliged themselves jointly to deliver to D a particular horse on a

Coverage: Article 1226-Art.1230

1. Obligation with a penal clause – is one which contains an accessory undertaking to

2. Penal clause – is an accessory undertaking attached to an obligation to assume

1. What are the purposes of incorporating a penal clause to an obligation?

(1) To insure their performance by creating an effective deterrent against breach,

Explain or state briefly the rule or reason for your answer:

1. X promises to deliver to Y a specific horse. Their contract contains a penal

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