Divisible and Indivisible Obligations

Art. 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 – one where the
object of delivery or performance is
capable of partial fulfillment.

• Indivisible obligation – one where the

object of delivery or performance is
not capable of partial fulfillment.
• What is the test to determine whether
an obligation is divisible or not?

➢ the purpose of the obligation or the

intention of the parties; and not the
possibility or impossibility of partial
prestation;
➢ Thus, while the object or service may
be physically divisible, an obligation is
indivisible if it is provided by law or
intended by the parties.
• But if the object is not physically
divisible or the service is not
susceptible of partial performance,
the obligation is always indivisible
despite the intention of the parties;
• This rule is absolute.

• Art. 1223 applies not only to real

obligations (to give or to deliver) but
also to personal obligations (to do or
to render some service).
• D agreed to pay C P10,000 in four equal
monthly installments. D’s obligation is
divisible because it is capable of partial
performance.
• But if it was agreed that D will pay C on
a certain date the full P10,000, then the
obligation is indivisible although money is
physically divisible since their intention is
that the obligation must be fulfilled at
one time and as a whole (not partially).

• Note – the divisibility of an obligation is

different from the divisibility of the thing
which is the object thereof.
• S obliged himself to deliver to B a
specific car on November 15.

• This obligation is indivisible since it is

not capable of partial performance.
The car must be delivered at one
time and as a whole.
• What if the agreement is that S will deliver
one-half of the car on November 5, and
the other half on November 30.
• Assuming B agreed on this. Will the
obligation be divisible or indivisible?

• The obligation is still indivisible and S must

deliver the whole car on November 15 or
November 30.
• Car is a definite thing that cannot be
served into parts without changing its
essence or destroying its value.
Kinds of Division:
• (1) Qualitative division –
➢ one based on quality, or on number
or quantity of the things which are
the object of the obligation;
➢ Example:
➢ A and B are heirs of C, They agreed
to divide their inheritance as follows:
to A – a house and lot and home
appliances and to B – rice field, a
car and P10,000.00 cash.
• (2) Quantitative division –
➢ one based on quantity rather than
quality;
➢ Example:
➢ In the last example, if the inheritance
consists only of a rice field, its partition
by metes and bounds into two equal
parts is a quantitative division;

➢ When A and B divide 300 cavans of

palays harvested from the rice field, or
the P10,000.00 cash.
• (3) Ideal or intellectual division –
➢ one which exists only in the minds of
the parties;
➢ Example:
➢ In the example, suppose the car and the
rice field were inherited by both A and B;
➢ As co-owners, their one-half shares in the
car are not separable in a material way
but only mentally;
➢ Also, before the land is actually divided
between A and B, they are co-owners,
and neither one of them is the absolute
owner of a specific portion thereof.
Kinds of indivisibility:
• 1. Legal indivisibility –
➢ when specific provision of law declares as
indivisible, obligations which, by their
nature, are divisible;

• 2. Conventional indivisibility –
➢ where the will of the parties makes as
indivisible, obligations which, by their
nature, are divisible; and

• 3. Natural indivisibility –
➢ where the nature of object or prestation
does not admit of division (ex. to give a
particular car, to sing a song);
• Where there is only one creditor and
one debtor.
• Art. 1223 applies only to obligations
where there is only one creditor and only
one debtor;
• When there is only one creditor and one
debtor, the debtor has to perform the
obligation in its totality, whether or not
the prestation is divisible, unless there is a
contrary express stipulation;
• Thus, the creditor cannot be compelled
partially to receive the prestations which
the obligation consists;
 Art. 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 price of the thing or of
the value of the service in which the
obligation consists. (1150)
• 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 (ex. to
pay money);
• 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.
 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.
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.
(1151a)
• Obligations deemed indivisible.

• Purpose of the obligation is the

controlling circumstance;

• This rule applies not only to

obligations to give but also to
obligations to do or not to do.
• Divisible and indivisible obligations are
not to be confused with divisible and
indivisible contracts. (Art. 1420)

• (1) Obligations to give definite things –

• Examples:
• To give a particular electric fan; to
deliver a specific house;
• Here, obligation is indivisible because of
the nature of the subject matter.
• (2) Obligations not susceptible of partial
performance –
• Examples:
• To sing a song; to dance the tinikling.
• Here, obligation is indivisible by reason
of its purpose - requires performance of
all the parts.

• Is the obligation still indivisible if there

are more than one participant?
• The obligation becomes divisible as
regards the participants because it is
capable of partial performance.
• (3) Obligations provided by law to
be indivisible even if thing or service
is physically divisible –
• Example:

• Under the law, taxes should be paid

within a definite period;
• While money is physically divisible,
the amount of tax payable must be
delivered in whole not partially.
• (4) Obligations provided by law to
be indivisible even if thing or service
is physically divisible –

• Example:

• D’s obligation is to give P1,000 to C

on a certain date;
• Money is physically divisible but the
clear intention here is for D to deliver
P1,000 at one time and as a whole.
• Suppose there are two debtors, D
and E, is the obligation still indivisible?

• The obligation becomes divisible as

far as D and E are concerned, since
the delivery of P1,000 can be done in
parts, ex. P500 by D and P500 by E.
• But as far as C is concerned, the
obligation remains indivisible since its
performance cannot be done in
parts.
• Obligations deemed divisible.

• (1) Obligations which have for their

object the execution of a certain
number of days of work –

• Example:
• D’s obligation to paint the house of
C to be finished in 10 days. Here, the
obligation need not be fulfilled at
one time.
• (2) Obligations which have for their
object the accomplishment of work
by metrical units –
• Example:
• The obligation of D to make a table,
3 feet wide and 5 feet long; and the
obligation of D and B to deliver 20
cubic meters of sand.
• The obligation of D alone to deliver
20 cubic meters of sand is indivisible.
• (3) Obligations which by their nature
are susceptible of partial performance–

• Examples:
• Obligation of D to teach “Obligations
and Contracts” for 1 year in a university;
• Obligation of E to render 3 song numbers
in a program;
• Obligation of F to pay a debt of P12,000
in 12 monthly installments of P1,000, but
each prestation to pay P1,000 is
indivisible as it is to be delivered at one
time and its totality.
• 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.
• Examples:
• (1) Indivisible obligation –
• A obliged himself to B not to sell
cigarettes in his store for one year.
Here, the obligation should be fulfilled
continuously during a certain period.
• (2) Divisible obligation –
• If the obligation of A is not to sell
cigarettes in his store only during
Sundays and holidays, the obligation
is divisible because the forbearance
is not continuous.

• Obligations “to do” and “not to do”

are generally indivisible;
• Obligations “to do” (par. 2 of Art.
1225) are divisible.
Obligations with a Penal Clause
Art. 1226. In obligations with a penal
clause, the penalty shall substitute the
indemnity for damages and the payment
of interest 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 fulfilment of the
obligation.
The penalty may be enforced only
when it is demandable in accordance
with the provisions of this Code. (1152a)
• MEANING:

• (1) Principal obligation is one which

can stand by itself and does not
depend for its validity and existence
upon another obligation.

• (2) Accessory obligation is one which

is attached to a principal obligation
and, therefore, cannot stand alone.
• An 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.

• A penal clause is an accessory

undertaking attached to an obligation
to assume greater liability in case of
breach, i.e., the obligation is not
fulfilled, or is partly or irregularly
complied with.
Purposes of penal clause:
• (1) to insure their performance;
➢ REPARATION - by creating an effective
deterrent against breach, making the
consequences of such breach as
onerous as it may be possible.

• (2) to substitute a penalty for indemnity

for damages and payment of interest in
case of non-compliance, or to punish
debtor for the non-fulfillment or violation
of his obligation.
➢ PUNISHMENT
Penal clause vs. Condition
• (1) Penal clause constitutes an
obligation although accessory, while
the condition does not; and

• (2) Penal clause is demandable in

default of unperformed obligation
and sometimes jointly with it, while
the condition is never demandable.
• Kinds of penal clause:

• (1) As to its origin:

• (a) Legal penal clause –

➢ when it is provided by the law; and

• (b) Conventional penal clause –

➢ when it is provided for by stipulation
of the parties.
• (2) As to its purpose:

• (a) Compensatory penal clause –

➢ when the penalty takes the place of
damages; and

• (b) Punitive penal clause –

➢ when the penalty is imposed merely
as punishment for breach.
• (3) As to its demandability or effect:

• (a) Subsidiary or alternative penal

clause –
➢ when only the penalty can be
enforced; and

• (b) Joint or cumulative penal clause –

➢ when both the principal obligation
and the penal clause can be
enforced.
• Penalty substitutes for damages and
interests.

• General rule:
➢ In 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;
• Cases when creditor may recover
damages (apart from penalty):

• (1) When so stipulated by the parties;

• (2) When the obligor refuses to pay

the penalty, in which case, creditor
may recover legal interest thereon; or

• (3) When the obligor is guilty of fraud

in the fulfillment of the obligation;
• X promised to construct a house for Y.
The contract has a penal clause that in
case of non-compliance, X would pay
a penalty of P50,000.
• X did not construct the house and, as a
result, Y suffered damage in a sum of
P40,000.

• Here, the penalty of P50,000 shall be

paid by X. Y cannot recover more than
P50,000 (penalty stipulated) even if he
proves that the damages he suffered is
say P60,000.
• The penalty substitutes the indemnity for
the damage of P40,000, unless there is
stipulation to the contrary wherein Y
may also recover the damages he may
proved.

• If X refuses to pay the penalty, Y may

recover legal interest thereon.

• If X is guilty of fraud (not mere fault) in

the fulfillment of his obligation, he is also
liable for the damages caused thereby.
• When penalty may be enforced?

• If the penalty is demandable:

• > This is when there is a breach of the
obligation and it is not contrary to
law, morals, good customs, public
order or public policy.

• If the obligation cannot be fulfilled

due to fortuitous event, the penalty is
not demandable.
 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)
• Penalty is not a substitute for
performance.

• General rule:
➢ Debtor cannot just pay the penalty
instead of performing the obligation.

• Exception:
➢ When “this (debtor’s) right has been
expressly reserved for him.”
• S is required to deliver to B certain
products; otherwise, he shall pay a
penalty in the amount of P10,000.

• Here, S cannot just pay the penalty

as a substitute for non-compliance
of the principal obligation except
when he is expressly given the right
by B to do so.
• Penal clause is presumed subsidiary:

• General rule:

• Creditor cannot demand fulfillment

of the obligation and the satisfaction
of the penalty at the same time.
• (1) Where there is performance –

➢ Once the obligation is fulfilled, there

is no need to demand penalty;
➢ Exception:
➢ When the creditor has been clearly
granted this right;

➢ Under Art. 1227, the general rule is

that a penal clause is subsidiary and
not joint.
• (2) Where there is no performance. –

➢ In non-compliance, creditor may ask for

penalty or require specific performance;
➢ These remedies are alternative and not
cumulative nor successive, except if after
the creditor has decided to require
fulfillment, the same should become
impossible without his fault;

➢ If the debtor was in fraud, the creditor

may recover the penalty and damages
for non-fulfillment.
• (1) In the earlier example, if S delivered
the products after he has incurred in
delay and B accepted the delivery, the
penalty cannot also be demanded by
B unless such right is clearly given to him
in the contract in which case the penal
clause is joint.

• (2) If S did not comply with his

obligation, B can choose between
requiring fulfillment of the principal
obligation or pay the penalty.
• (a) If B has selected fulfillment, he may
not later on demand the payment of
the penalty unless the fulfillment should
become impossible without his fault (ex.
through S’s fault).

• (b) If B has chosen and received the

penalty, he may not later on require the
fulfillment of the obligation which is
deemed repudiated by both of them.
But he may still demand fulfillment
should S not pay the penalty.
• (c) If the non-fulfillment of obligation is
attributable to the fraud committed
by S, both the stipulated penalty and
damages suffered by B may be
recovered by him.
• When penal clause joint.

• Debtor has the right to pay penalty in

lieu of performance only when this right
has been expressly reserved for him.

• Creditor has the right to demand

performance and payment of penalty
jointly when this right has been clearly
granted him.
• This right be expressly reserved for him;
 Art. 1228. Proof of actual
damages suffered by the creditor is
not necessary in order that the
penalty may be demanded. (n)
• Penalty demandable without proof of
actual damages.

• In an obligation with a penal clause, to

enforce the penalty, creditor has only
to prove that the debtor violated the
obligation;
• Thus, creditor is not required to present
evidence to prove losses and damages
he suffered;
• Creditor may enforce penalty whether
he suffered damages or not but cannot
recover more than the agreed 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;

• But for a creditor to recover damages

in addition to the agreed penalty:
➢ He must prove the amount of damages
which he actually suffered as a result of
the debtor’s breach of the principal
obligation.
 Art. 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.
(1154a)
• When penalty may be reduced by the
courts:
• (1) When there is partial or irregular
performance –

➢ PARTIAL refers to the extent of fulfillment;

➢ IRREGULAR – to the manner of fulfillment;

➢ General rule – obligation is not deemed

performed unless the thing or service
(subject matter of contract) has been
fully delivered or rendered, as the case
may be;
• (2) When the penalty agreed upon is
iniquitous or unconscionable –

➢ Here, the penalty may be reduced

even if there is no performance at all;

➢ Even if iniquitous or unconscionable,

damages (as indemnity or as penalty)
are not void, but subject merely to
equitable reduction.
Example of Partial or Irregular
Performance:

➢ X agreed to construct the house of Y

within four (4) months for P1,000,000
according to certain specifications. The
contract stipulates that in case of non-
compliance with the obligation, X will
pay a penalty of P100,000.00.

➢ Except for some finishing touches, X

practically completed the construction
of the house after four (4) months.
• Example of Partial Performance.
➢ It is unfair for Y to exact the payment of
the full amount of P100,000 as penalty.
➢ Y benefited from partial performance of
X – the court may equitably reduce the
penalty, say to P20,000.
➢ Penalty must be proportionate with the
extent of breach of contract or damage
suffered.

• Irregular Performance – if X completed

the construction of the house but not
pursuant to the contract specifications.
Example of when Penalty is iniquitous
or unconscionable:

➢ If in the example, the value of house is

only P100,000. It is stipulated that for
every day of delay, X must pay a
penalty of P5,000.

➢ The court, in the exercise of its sound

discretion, may reduce the penalty
where it is clearly excessive and
unconscionable.
 Art. 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. (1155)
• Effect of nullity of the penal clause.

• If only the penal clause is void, the

principal obligation remains valid and
demandable;

• The penal clause is just disregarded;

• Injured party may recover indemnity for

damages in case of non-performance
of the obligation as if no penalty has
been stipulated.
• S agreed to sell merchandise to B. It
was agreed that in case of default, S
will deliver prohibited drug as penalty.

• The obligation to sell merchandise is

valid but the penalty to deliver the
prohibited drug is void.

• For failure of S to comply with his

obligation, B may recover damages.
• Effect of nullity of principal obligation.

• If the principal obligation is void, the

penal clause is likewise void;
• Reason – The clause cannot stand
alone without the principal obligation
to which it is subordinated (based).

• But if the nullity of principal obligation is

due to debtor’s fault (bad faith) where
creditor suffered damages, the penalty
may be enforced.
• S agreed to deliver to B two (2) grams
of prohibited drugs. The contract
carries a penal clause that, in case of
non-compliance with the obligations,
S would pay a penalty of P10,000.

• Here, the nullity of principal obligation

carries with that of the penal clause
although it is itself valid.