Section 3. Alternative Obligations

Kinds of obligation according to object

1. Simple Obligation

An obligation where there is only one object.

Example:

• Mr. Tabinga bound himself to deliver his only dog to Mr. Ubarre.

• Mr. Ejay promised to repair the car of Mr. Jeremy

2. Compound obligation

An obligation where there are two or more objects.

Kinds of Compound obligation

1. Conjunctive obligation

An obligation where there are two or more objects and all of them are due. All of the objects must be performed to extinguish the obligation.

Example:

Mr. Sali obliged himself to give his only cell phone, only laptop, and only TV to Mr. Gonzaga on August 1, 2023. On said date, Mr. Sali must deliver all the three objects together with their accessions and accessories for his obligation to be extinguished. Otherwise, if Mr. Sali delivers only the cellphone or only the cellphone and the laptop, then his obligation is not extinguished. The rule also is “complete payment/performance.”

2. Distributive obligation

An obligation where one, two or more of the objects are due. One of the objects must be performed to extinguish the obligation.

Kinds of Distributive obligation

1. Alternative obligation 

• An obligation where two or more objects are due but the performance of one is sufficient

Example:

Mr. Dela Cruz obliged himself to give his only cell phone, or his only laptop, or his only TV to Mr. Bonete on December 31, 2023. The delivery of either of these objects will extinguish the obligation of Mr. Dela Cruz.

1. Facultative obligation

• An obligation where only one object is due but the debtor may substitute another object. 

Example:

Mr. Laurel promised to give his only parcel of land to Mr. Gatila. However, as a substitute, he will deliver his only car.

 Take note that the parcel of land is the principal object and the car is the substitute object. Delivery of any of these objects will extinguish his obligation.

Rule:

A person alternatively bound by different prestations shall completely perform one of them.

Limitation:

The creditor cannot be compiled to receive part of one and part of the other undertaking.

Example:

Mr. Harake obliged himself to give his only cell phone, or his only laptop, or his only TV to Mr. Alawi on December 31, 2022. The delivery of either of these objects will extinguish his obligation. If Mr. Harake chooses to deliver his only cell phone, he should include its charger and earphones together with the owner’s manual in conformance with the principle of complete payment or performance.

Example:

Mr. Zambales borrowed from Mr. Valencia Pl0,000. It was agreed that Mr. Zambales could comply with his obligation by giving Mr. Valencia P10,000, or a color television set, or by painting the house of Mr. Valencia.

The delivery of the P10,000 or the color television set, or the painting of the house of Mr. Valencia, is sufficient to comply with the obligation. Performance must be complete.

Mr. Valencia cannot be compelled to accept, for instance, P5,000 and half of the television, thereby establishing a co-ownership between them or P5,000 and the painting of a part of his house.

Rule: Right to Choose Prestation -> belongs to debtor, unless expressly given to creditor. 

Limitation of Debtor’s Right to Choose

1. The debtor must completely perform the prestation chosen. He cannot compel the  creditor to receive part of one prestation and a part of another.

2. He cannot choose those restations   which   are impossible, unlawful   or which could not have been the object of the obligation

Example:

Mr. Tabinga obliged himself to give his only cell phone, or his only laptop, or his only TV to Mr. Madridiano. A problem will arise if Mr. Tabinga wants to deliver the cellphone while Mr. Madridiano wants to receive the laptop. Thus, if the parties did not stipulate on who will choose, then the right to choose belongs to Mr. Tabinga, the debtor.

Exception:

The exception is when the choice has been expressly given to the creditor 

Example:

In the immediately preceding example, if Mr. Tabinga communicated to Mr. Madridiano that it will be the latter who will choose and Mr. Madridiano agreed then Mr. Madridiano can choose the laptop.

Limitation:

The debtor shall have no right to choose those prestations which are impossible, unlawful or which could not have been the object of the obligation.

Example:

Mr. Gatila binds himself to deliver item one or item two to Mr. Jake on December 10 and to communicate his choice on or before December 5. If Mr. Gatila delays in making his choice, Mr. Jake  cannot exercise the right because it is not expressly granted to him.

Communication of notice that choice has been made

1. EFFECT OF NOTICE  

➢ Converts alternative obligation to Simple Obligation

➢ No particular form required (writing, verbally) 

➢ Choice properly made and communicated is irrevocable otherwise, the other party might be exposed to damages which may arise from costly preparation in waiting for the performance of the announced prestation.

2. PROOF AND FORM OF NOTICE      

➢ Since the law requires no specific form, it is believed the choice can be communicated either orally or in writing, expressly or impliedly, such as by performance of one of the obligations. 

Note: Once notice has been made that a choice has been done, the obligation becomes a simple obligation to do or deliver the object selected. 

Also, an election once made is binding on the person who makes it, and he will not, therefore, be permitted to renounce his choice and take an alternative which was first open to him.

• The concurrence of the creditor to the choice is not required

The   original   choice among   the should  be  upon  the  debtor’s  consent of the creditor is only required when there is a change about   the choice of Prestation 

EXAMPLE:

S obliged himself to deliver to B his car, or his race horse. S chose the car and properly informed B of his choice. The obligation becomes a simple obligation to deliver the Car.

As such, neither party can change the prestation without the consent of the other. Of course, S or B may waive his right after a choice has been made. As a general rule, all rights may be waived.

• The debtor shall lose right of choice when among the prestations whereby he is alternatively bound, only one is practicable. 

• When the debtor loses the right of choice the obligation becomes simple. This article applies only when the debtor has the right to choose. 

RULE:  If more than one of the prestation’s is practicable, the obligation is still alternative because the debtor still retains the right of choice. But if ONLY ONE is practicable, obligation is converted into a simple.

Example: 

Debtor will give the creditor a dog, duck, and chicken but the dog and duck died, therefore Debtor can only deliver chicken.

Or if it suddenly became illegal to give ducks or chickens because of a disease; only dogs can deliver.

Rule: When debtor cannot choose because of creditor’s act

If through the creditor’s act the debtor cannot make a choice according to the terms of the obligation, the latter may rescind the contract with damages. May rescind – not automatically rescinded. The law implies that the debtor may allow it to remain enforced in so far as the possible choice or choices are involved

Example: 

Debtor: cake, cookies, or dog - but the creditor broke the oven, the cake and cookies can no longer be made because of the creditor's action. The dog can still be delivered but the debtor has a choice to cancel/rescind the contract due to the creditor's actions.

• The creditor is entitled to damages if the debtor is to blame for the inability to fulfill all the alternative obligations purposes.

• Unless the parties agree otherwise, the obligation is terminated, and the debtor is absolved of liability if such an impossibility is brought about by a fortuitous event.

• If the debtor is still capable of fulfilling the remaining obligations, the creditor cannot make a damage claim.

• The damages that could be recovered depend on the final object that vanished or the service that was rendered impossible. This final one becomes a straightforward requirement.

Example: 

Liza is obliged to deliver a car, ring, or necklace to Jenie. Among the three, Liza decided that the one that she would give to Jenie was the car, but before Liza could deliver the car, she got into an accident and the car was damaged. So, she decided that, as an alternative to the car, she would just give her a ring.

1. If only one thing lost - (due to fortuitous event) creditor chooses from the remainder, then debtor delivers the choice to creditor;

2. If only one remains – debtor delivers the same to the creditor;

3. If only one thing lost – (due to fault of the debtor)

a. Creditor may choose any one of the remainders;

b. Creditor may choose the price or value of the one which was lost;

c. Creditor may choose a or b plus damages.

4. If all things were lost – (due to fault of the debtor) creditor may choose the price of anyone of the things, with damages if warranted. The same rules shall be applied to obligations to do or not to do in case one, some or all of the prestations should become impossible.

Examples:

1. If lost through a fortuitous event - 

Example: Julie obliged himself to deliver to Mariane a ring, or a bracelet or a necklace. If the ring is lost through a fortuitous event, Mariane can choose from among the remainder or that which remains if two of the items are lost.

2. When a thing is lost through debtor’s fault - 

Example: If the loss of the ring occurs through the fault of Julie, Mariane may claim the bracelet or the necklace with a right to damages or the price of the ring also with a right to damages.

3. When all things are lost through debtor’s fault - 

Example: If all the items are lost through the fault of Julie, then Mariane can demand the payment of the price of any one of them with a right to indemnity for damages.

4. When all things are lost through a fortuitous event - 

Example: The obligation of Julie shall be extinguished if all the things/choices are lost  through a fortuitous event.

• If loss or deterioration happened before substitution was made, the obligor is not liable; after substitution was communicated, he was liable for loss (through delay, negligence, or fraud).

Example: 

Julie promised to give a cookie to Mariane, but it was also stipulated that Julie could give a biscuit as a substitute.