Alternative Obligation: When It Ceases To Be One

A Paper on Articles 1199 1206

of the
Civil Code of the Philippines

In partial fulfillment of the course

Obligations and Contracts

Submitted to:
Atty. Anfred P. Panes

Submitted by:
Rica Marie P. Salinas
LLB 1-B

April 11, 2016

TABLE OF CONTENTS

Introduction...........................................................................................................................1
Article 1199............................................................................................................................5
Article 1200...........................................................................................................................8
Article 1201..........................................................................................................................10
Article 1202..........................................................................................................................12
Article 1203..........................................................................................................................16
Article 1204..........................................................................................................................17
Article 1205..........................................................................................................................19
Article 1206.........................................................................................................................22
Alternative Obligations versus Facultative Obligations....................................................24
How An Alternative Obligation Ceases To Be One............................................................25

TABLE OF AUTHORITIES

Cases
Arco Pulp and Paper Co., Inc. and Candida A. Santos vs Dan T. Lim.........................6, 11
Clara Tambunting de Legarda, et al. vs Victoria Desbarats Miailhe, substituting
William J. B. Burke......................................................................................................9, 12
Estanislao Reyes vs Sebastiana Martinez et al................................................................20
Felipe Agoncillo, and his wife, Marcela Mario vs Crisanto Javier, administrator of
the estate of the late Anastasio Alano, Florencio Alano and Jose Alano.......................4
Francisco I. Chavez vs Public Estates Authority and Amari Coastal Bay Development
Corporation..............................................................................................................7, 9, 13
Judge Ramon R. San Jose of Branch IV, Court of First Instance of Manila, The Sheriff
of Manila, and Antero Perez vs Natalio Javier and Amando Javier...........................14
Martina Quizana vs Gaudencio Redugerio and Josefa Postrado...................................22
Ong Guan Can and The Bank of the Philippine Islands vs The Century Insurance Co.,
Ltd.....................................................................................................................................10

Statutes
Section 3, Book IV of the New Civil Code of the Philippines...............................................1

Section 3, Book IV, New Civil Code of the Philippines

Introduction

Section 3, Book IV of the New Civil Code of the Philippines provides for the
provisions of law as regards alternative and facultative obligations.
The online Law Dictionary defines an alternative obligation as,
an obligation allowing the obligor to choose which of two
things he will do, the performance of either of which will
satisfy the instrument. Where the things which form the
object of the contract are separated by a disjunctive, then the
obligation is alternative.
On the other hand, a facultative obligation is defined under Article 1206 of the
Civil Code of the Philippines, thus:
When only one prestation has been agreed upon, but the
obligor may render another in substitution, the obligation is
called facultative.
Section 3, Book IV of the New Civil Code of the Philippines reads:
SECTION 3. - Alternative Obligations
Art. 1199. A person alternatively bound by different
prestations shall completely perform one of them. The
creditor cannot be compelled to receive part of one and part
of the other undertaking.
Art. 1200. The right of choice belongs to the debtor, unless
it has been expressly granted to the creditor.

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.
Art. 1201. The choice shall produce no effect except from
the time it has been communicated.
Art. 1202. The debtor shall lose the right of choice when
among the prestations whereby he is alternatively bound,
only one is practicable.
Art. 1203. If through the creditor's acts the debtor cannot
make a choice according to the terms of the obligation, the
latter may rescind the contract with damages.
Art. 1204. The creditor shall have a right to indemnity for
damages when, through the fault of the debtor, all the things
which are alternatively the object of the obligation have been
lost, or the compliance of the obligation has become
impossible.
The indemnity shall be fixed taking as a basis the value of the
last thing which disappeared, or that of the service which last
became impossible.
Damages other than the value of the last thing or service may
also be awarded.
Art. 1205. When the choice has been expressly given to the
creditor, the obligation shall cease to be alternative from the
day when the selection has been communicated to the
debtor.

Until then the responsibility of the debtor shall be governed

by the following rules:
(1) If one of the things is lost through a fortuitous event, he
shall perform the obligation by delivering that which the
creditor should choose from among the remainder, or that
which remains if only one subsists;
(2) If the loss of one of the things occurs through the fault of
the debtor, the creditor may claim any of those subsisting, or
the price of that which, through the fault of the former, has
disappeared, with a right to damages;
(3) If all the things are lost through the fault of the debtor,
the choice by the creditor shall fall upon the price of any one
of them, also with indemnity for damages.
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.
Art. 1206. When only one prestation has been agreed upon,
but the obligor may render another in substitution, the
obligation is called facultative.
The loss or deterioration of the thing intended as a
substitute, through the negligence of the obligor, does not
render him liable. But once the substitution has been made,
the obligor is liable for the loss of the substitute on account
of his delay, negligence or fraud.
Based from the above-quoted section, an alternative obligation is one where there
are several prestations provided and wherein the debtor is bound to perform his
3

obligation by choosing one of these prestations to which he is alternatively bound. The

performance of one prestation fulfills the whole obligation. The debtor cannot fulfill part
of one prestation and part of another to extinguish the whole obligation. And just as
well, the debtor cannot force the creditor to accept part of one prestation and part of
another.
Articles 1200 to 1204 deals with alternative obligations when the right of choice
belongs to the debtor. Article 1205 tackles the duties of the debtor when the right of
choice is granted to the creditor. And Article 1206 relates to facultative obligations.
A simple illustration of an alternative obligation is when a person promised, as
payment for his debt, to give back the same amount or to deliver a television set or to
provide a desktop computer. Whatever that person chooses from among these three
would extinguish the whole obligation.
Based on this illustration, the three alternatives provided are giving back the
same amount as the debt, delivery of the television set and the provision of the desktop
computer. Hence, the name alternative obligation. The debtor may choose among the
three alternatives. By performing one of the alternative, the whole obligation, in this
case, payment of his debt, is performed and his debt is extinguished.
In as early as 1918, the Supreme Court had illustrated how alternative obligations
are identified. Thus, in the case of Felipe Agoncillo, and his wife, Marcela Mario vs
Crisanto Javier, administrator of the estate of the late Anastasio Alano, Florencio
Alano and Jose Alano, G.R. No. L-12611, August 7, 1918, the Supreme Court states:
The contract now under consideration is not susceptible of
the interpretation that the title to the house and lot in
question was to be transferred to the creditor ipso facto upon
the mere failure of the debtors to pay the debt at its maturity.
The obligations assumed by the debtors were alternative, and

they had the right to elect which they would perform (Civil
Code, art. 1132).
xxx
Plaintiff argues that the undertaking to convey the house and
lot constitutes an indivisible obligation, and that even where
the promise is not in solidum, the concurrence of two or
more debtors in an obligation whose performance is
indivisible creates such a relation between them that the
interruption of prescription as to one of necessity interrupts
it as to all. The distinction is one which is well-established,
although the authorities cited do not fully support plaintiffs'
contentions, but in this particular case the question is
academic, for the undertaking is in the alternative to pay a
sum of money an essentially divisible obligation or to
convey the house. As the alternative indivisible obligation is
imposed only in the event that the debtors fail to pay the
money, it is subject to a suspensive condition, and the
prescription of the obligation whose non-performance
constitutes the condition effectively prevents the condition
from taking place.
[Underscoring, supplied]

Article 1199

Art. 1199. A person alternatively bound by different

prestations shall completely perform one of them. The

creditor cannot be compelled to receive part of one and part

of the other undertaking.
Taking the illustration earlier where there are three prestations, the debtor must
either give back the same amount or deliver the deliver set or provide the desktop
computer as a performance of his obligation and to extinguish the same, in the given
example, as payment for his debt and the extinguishment of the same. As Article 1999
states, he has to completely perform one of them. This manifests that the debtor
cannot perform half of one and half of another. In the illustration, the debtor cannot
deliver half of the amount and just the monitor of the desktop computer as payment for
his whole debt. In the same manner, the debtor cannot compel the creditor to accept
such payment, even where the total value of the two halves amounts to a much greater
price than the debt itself.
This also applied to obligations to do. If the debtor promised to perform either
one of the two or more services, then the obligation is an alternative one.
The case of Arco Pulp and Paper Co., Inc. and Candida A. Santos vs Dan T. Lim,
G.R. No. 206806, June 25, 2014 illustrates these aforecited provisions of law where the
Honorable Supreme Court explained,
In an alternative obligation, there is more than one object,
and the fulfillment of one is sufficient, determined by the
choice of the debtor who generally has the right of election.
The right of election is extinguished when the party who may
exercise that option categorically and unequivocally makes
his or her choice known.
xxx
According to the factual findings of the trial court and the
appellate court, the original contract between the parties was

for respondent to deliver scrap papers worth P7,220,968.31

to petitioner Arco Pulp and Paper. The payment for this
delivery became petitioner Arco Pulp and Papers obligation.
By agreement, petitioner Arco Pulp and Paper, as the debtor,
had the option to either (1) pay the price or (2) deliver the
finished products of equivalent value to respondent.
The appellate court, therefore, correctly identified the
obligation between the parties as an alternative obligation,
whereby petitioner Arco Pulp and Paper, after receiving the
raw materials from respondent, would either pay him the
price of the raw materials or, in the alternative, deliver to
him the finished products of equivalent value.
[Underscoring, supplied]
The dissenting opinion of Justice Consuelo Ynares-Santiago in the case of
Francisco I. Chavez vs Public Estates Authority and Amari Coastal Bay Development
Corporation, G.R. No. 133250, July 9, 2002 also made mention of this article and
explained the same, thus:
Art. 1199. A

person

alternatively

bound

by

different

prestations shall completely perform one of them.

The creditor cannot be compelled to receive part of one and
part of the other undertaking.
In an alternative obligation, there is more than one object,
and the fulfillment of one is sufficient, determined by the
choice of the debtor who generally has the right of
election. From the point of view of Amari, once it fulfills its
obligations under the Amended JVA, then it would be

entitled to its stipulated share of the Joint Venture Profits. In

this instance, Amari would stand as creditor, with PEA as the
debtor who has to choose between two payment forms: 70%
of the Joint venture Profits, in the form of cash or a
corresponding portion of the land reclaimed.
[Underscoring, supplied]
Pursuant to Article 1999, an alternative obligation ceases to be one the moment
the debtor performs one of the prestations for this renders the fulfillment of his
obligation. His complete performance of just one prestation, despite the three
prestations given, extinguishes the whole obligation.

Article 1200

Article 1200 specifically states that:

Art. 1200. The right of choice belongs to the debtor, unless
it has been expressly granted to the creditor.
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.
Generally, as stated in the aforecited article, it is the debtor who has the right of
choice unless otherwise expressly granted to the creditor. Stated otherwise, as a default,
it is the debtor who has the right to choose which obligation to perform among the
prestations available.
It follows then that there might be instances when the creditor would have the
right to choose which among the prestations must the debtor perform. That would only
happen when the right of choice is expressly granted to the creditor. Article 1200 uses
8

the term expressly, hence, it must be specifically stipulated that such right is granted
on the creditor. Absence of any express stipulation would vest the right of choice on the
debtor. When the right of choice is expressly granted to the creditor, Article 1205 of the
same section of the New Civil Code applies.
Thus, the debtor, who has the right of choice, cannot choose such prestations that
are impossible, unlawful or that which was not and could not have been the object of the
obligation.
Thus, in the above-quoted jurisprudence of Francisco I. Chavez vs Public Estates
Authority and Amari Coastal Bay Development Corporation, supra, the Court
mentioned, and to quote again:
In an alternative obligation, there is more than one object, and
the fulfillment of one is sufficient, determined by the choice of the
debtor who generally has the right of election.

[Underscoring, supplied]
This case fittingly applied the first paragraph of Article 2000 of the Civil Code as
well as Article 1999 of the same Code.
On the other hand, sub-paragraph 2 of this Article refers to instances where due
to attendant circumstances, only one prestation is left possible, lawful or could have
been the object of the obligation. Stated otherwise, all the prestations originally agreed
upon, except one, are impossible, unlawful or which could not have been the object of
the obligation.
In a ponencia penned by Justice Felix Angelo Bautista, the Supreme Court had
the occasion to discuss this provision although it was not the main issue of the case.
Thus, in Clara Tambunting de Legarda, et al. vs Victoria Desbarats Miailhe,
substituting William J. B. Burke, G.R. No. L-3435, April 28, 1951, the Court explained
Article 2000 of the New Civil Code of the Philippines in this manner:
9

As we have stated before, the option to demand payment of

the indebtedness has to be exercised upon maturity of the
obligation, which is February 17, 1943. On this date, the only
currency available is the Philippine currency, or the
Japanese Military notes, because all other currencies,
including the English, were outlawed by a proclamation
issued by the Japanese Imperial Commander on January 3,
1942. This means that the right of election ceased to exist on
that date because it had become legally impossible. And this
is so because in alternative obligations there is no right to
choose undertakings that are impossible or illegal (Civil
Code, art. 1132, par. 2).
[Underscoring, supplied]
Under this Article, an alternative obligation becomes a simple obligation when,
among the alternative prestations, all but one are impossible, unlawful or that which
could not have been the object of the obligation. Hence, the debtor is faced with no
alternative but to choose to perform that one which is not impossible, unlawful or which
could not have been the object of the obligation.

Article 1201

Whatever the debtor chose to perform would have no effect until he has
communicated the same to the creditor. Hence, once a choice has been made, the debtor
must inform the creditor of such choice. As stated in Article 1201, The choice shall
produce no effect except from the time it has been communicated.

Absence any

communication on the choice made, it is presumed that debtor has not availed of his
right of choice yet.

10

In the case of Ong Guan Can and The Bank of the Philippine Islands vs The
Century Insurance Co., Ltd, G.R. No. L-22738, December 2, 1924, the Court clarified
Article 1201, thus:
It must be noted that in alternative obligations, the debtor,
the insurance company in this case, must notify the creditor
of his election, stating which of the two prestations he is
disposed to fulfill, in accordance with article 1133 of the
Civil Code. The object of this notice is to give the creditor,
that is, the plaintiff in the instant case, opportunity to
express his consent, or to impugn the election made by the
debtor, and only after said notice shall the election take
legal effect when consented by the creditor, or if impugned
by the latter, when declared proper by a competent court.
[Underscoring, supplied]
Again, the case of Arco Pulp and Paper Co., Inc. and Candida A. Santos vs Dan
T. Lim, supra, explains the same provision this way:
When petitioner Arco Pulp and Paper tendered a check to
respondent in partial payment for the scrap papers, they
exercised their option to pay the price. Respondents receipt
of the check and his subsequent act of depositing it
constituted his notice of petitioner Arco Pulp and Papers
option to pay.
This choice was also shown by the terms of the
memorandum of agreement, which was executed on the
same day. The memorandum declared in clear terms that the
delivery of petitioner Arco Pulp and Papers finished
products would be to a third person, thereby extinguishing
11

the option to deliver the finished products of equivalent

value to respondent.
[Underscoring, supplied]
Therefore, the law and related jurisprudence makes mandatory the rule that the
election of a choice among the prestations must be communicated.
Article 1201 shows that, again, an alternative obligation can become a simple one.
And that is when the debtor has communicated his choice among the prestations. Once
he has expressed his choice to the creditor, the obligation becomes a simple one. The
debtor is obliged to perform that one prestation he chose.

Article 1202

However, when only one prestation is practicable among the prestations from
which the debtor could choose, the debtor loses his right to choose. Rather, he has to
perform that practicable one as provided in Article 1202. Corollarily, the obligation is no
longer an alternative one but has been changed to a simple one.
Again, the case of Clara Tambunting de Legarda, et al. vs Victoria Desbarats
Miailhe, substituting William J. B. Burke, supra, explains, in essence, this article when
it stated that:
In other words, the obligation on the part of the debtor to
pay the mortgage indebtedness has since then ceased to be
alternative. (Articles 1134 & 1136(1) of the Civil Code.)
It appears, therefore, that the tender of payment made by the
plaintiff in Japanese Military notes was a valid tender
because it was the only currency permissible at the time, and
the same was made in accordance with the agreement
12

because payment in Japanese Military notes during the

occupation is tantamount to payment in the Philippine
currency.
[Underscoring, supplied]
In this case, the creditor was granted the choice of demanding payment of the
obligation either in Philippine currency, or in English currency. But while the debt was
still unpaid, war came and the Japanese colonized the Philippines during which all
other currencies, including the English, were outlawed by a proclamation issued by the
Japanese Imperial Commander. Hence, the right of choice of the creditor ceased at the
moment the proclamation was issued.
Also, the dissenting opinion of Justice Consuelo Ynares-Santiago in the case of
Francisco I. Chavez vs Public Estates Authority and Amari Coastal Bay Development
Corporation, supra, provided an explanation as well on this article:
Since it has been ruled that the transfer of any of the
reclaimed lands to Amari would be unconstitutional, one of
the prestations of this alternative obligation has been
rendered unlawful. In such case, the following Civil Code
provision becomes pertinent:
Art. 1202. The debtor shall lose the right of
choice when among the prestations whereby
he is alternatively bound, only one is
practicable.
If all the prestations, except one, are impossible or unlawful,
it follows that the debtor can choose and perform only
one. The obligation ceases to be alternative, and is converted
into a simple obligation to perform the only feasible or
13

practicable prestation. Even if PEA had insisted on paying

Amari with tracts of reclaimed land, it could not have done
so, since it had no right to choose undertakings that are
impossible or illegal.
We must also remember that, in an alternative obligation,
the fact that one of the prestations is found to be unlawful
does not result in the total nullity of the Amended JVA.
[Underscoring, supplied]
Just as Article 1200 renders an alternative obligation to a simple obligation when
all except one prestation is impossible, unlawful or which could not have been the object
of the obligation, Article 1202 makes an alternative obligation a simple one when among
the prestations provided, only one is practicable. Otherwise stated, when all the
prestations, except one, are impracticable, then the debtor had no choice but to perform
that practicable one. Obviously, it would be an exhaustion of efforts and a waste of time,
not to say, a showing of lack of common sense, for a debtor, to choose a prestation which
he knew cannot be realized at all at any time during the duration of the existence of his
obligation.
The case of Judge Ramon R. San Jose of Branch IV, Court of First Instance of
Manila, The Sheriff of Manila, and Antero Perez vs Natalio Javier and Amando Javier,
G.R. No. L-6802, August 26, 1954 in a way exemplifies this article of the Civil Code.
This case involves a sale of a house erected on a lot which was not owned by the
seller. The buyer has deposited a downpayment for the purchase of the house but
subsequently learned that the right of option to buy the lot was no longer granted to the
seller of the house. Hence, the buyer sought the courts intervention in compelling the
seller of the house to sell the lot to the buyer or, if the same is no longer possible, to
refund the amount he paid as downpayment and reimbursement of expenses he
incurred in the improvement of the house plus interest, which the trial court granted.
14

Thus, in this case, the alternative obligations of the seller arose out of a trial courts
decision providing for the alternatives. The alternative obligations of the seller towards
the buyer were to sell the house with the right of option to buy the lot or to give back the
sum of Php280.00 to the buyer plus the value of the improvements (Php3,247.74), with
legal interest. However, the first alternative was no longer possible since the lot was
owned by a third party. Therefore, the trial court was correct when it issued a Writ of
Execution commanding the Sheriff of Manila to cause to be made the sum of
Php3,527.74 together with interest thereon from October 20, 1948, x x x by selling at
public auction the sellers goods and chattels that had been attached.
Thus, in the said case, the Court stated:
The vendors were given two alternatives, namely, that if
they (vendors) could still sell the right of option to buy the
lot together with the house, then the sale of said house was to
go through and be consummated; but if they could not
longer include in the sale of the house the right of option to
buy the lot because they no longer had that right, and if
plaintiff Perez was not agreeable to buying the house alone
without the option, then the second alternative would
operate, namely, the defendants vendors to return to the
plaintiff vendee the sum of P280 as well as the value of the
improvements, with legal interest.
To us the terms of the dispositive part of the decision of the
trial court are quiet clear. When it stated the first alternative,
it referred to a valid enforcement of its term, namely, that
together with the sale of the house the defendants could
validly convey the right of option to buy the lot. It could not
have contemplated an empty, maybe an invalid and even
illegal sale by the defendant of a right of option which they
15

did not have. That would be illogical and unreasonable. Such

a conveyance would be a mere gesture and absolutely of no
utility and benefit to the vendee (the plaintiff) and so, he
must have given up the purchase of the house and chose to
avail himself of the second alternative, resulting in the writ
of execution.
[Underscoring, supplied]
The difference of Article 1202 to Article 1200 is that in the latter, all but one is
impossible, unlawful or which could not have been the object of the obligation while in
the former, all the prestations may be possible, lawful and could have been the object of
the obligation but all except one is practicable, as clarified by the case referenced above
under this Article.

Article 1203

Nonetheless, if the debtor cannot make a choice based on the terms of the
obligation as a consequence of the acts of the creditor, the debtor may rescind the
contract and claim for damages as provided for by Article 1203 which states:
Art. 1203. If through the creditor's acts the debtor cannot
make a choice according to the terms of the obligation, the
latter may rescind the contract with damages.
The illustration below exemplifies the application of this provision:
Jonathan availed of the services of Alexander to do a painting job for
Php2,000,000.00. Alexander was given the choice to choose whether to paint the
residential house or the commercial building of Jonathan for the said amount. However,
before Alexander was able to make his choice, Jonathan sold his residential house,
thereby making it impossible for Alexander to paint the same, if he so chooses, because
16

the house no longer belonged to Jonathan. Alexander would have the choice to paint the
Jonathans commercial building or to rescind the contract with damages.
The difference of this provision from the second paragraph of Article 1200 is that
in Article 1200, there were several prestations but all of them except one, is impossible,
unlawful or could not have been the object of the obligation. In Article 1203, all the prestations
are possible, lawful and has been agreed to. But a subsequent act of the creditor restricted

the right of choice of the debtor.

Under this Article, the alternative obligation ceases to be one when through the
acts of the creditor, the debtor cannot make a choice. Since the debtor is given no choice,
he is without an alternative. Hence, no alternative obligation exists.
In addition to such provision, this Article offers a remedy for the debtor when
such instances occur. The debtor has the right to the rescission of the contract and he
may also claim damages.

Article 1204

Art. 1204. The creditor shall have a right to indemnity for

damages when, through the fault of the debtor, all the things
which are alternatively the object of the obligation have been
lost, or the compliance of the obligation has become
impossible.
The indemnity shall be fixed taking as a basis the value of the
last thing which disappeared, or that of the service which last
became impossible.
Damages other than the value of the last thing or service may
also be awarded.

17

This article refers to the loss of all the objects of the obligation or the compliance
of the same has become impossible through the fault of the debtor. If such happens, the
creditor shall have the right to indemnity for damages since the obligation can no longer
be complied with. The basis for fixing the indemnity shall be the value of the last thing
or service which was lost or has become impossible. Besides this, damages may also be
granted.
However, in cases where there is still an alternative available, then the debtor
would not be liable. The debtor incurs no liability when out of three prestations, he
caused those to only two alternatives, as long as those that are remaining are lawful,
possible or consistent with the tenor of the obligation. Even if the debtor caused an
alternative obligation to become a simple one where only one prestation is available,
provided that the remaining prestation is lawful, possible and could not have been the
object of the obligation, he would still be free from any liabilities. On the other hand,
when the debtor is at fault and has caused the losing or rendering impossible of all the
alternative prestations, then the creditor is entitled to damages.
To illustrate: Meg promised to give Ryan as payment for her debt an iPad worth
Php30,000.00 or her second-hand car worth Php40,000.00. However, to spite Ryan,
Meg willfully placed the iPad on the road and had the car run over it before crashing the
car on a concrete fence thereby destroying both. In this case, all the prestations available
for Ryan to choose from are no longer possible. As a remedy, Ryan has the right to
indemnity. Such indemnity shall be based on the price of the last thing which was lost,
in this case, the car. Hence, Ryan is entitled to an indemnity of Php40,000.00, plus any
amount of award of damages he may be granted.
In Article 1204, an alternative obligation also ceases to be such when all the
objects of the obligation has been lost or the performance of the obligation has become
impossible through the fault of the debtor. In this case, the obligation does not even turn
into a simple one since no prestation is left to be delivered or performed at all.

18

Article 1205

Art. 1205. When the choice has been expressly given to the
creditor, the obligation shall cease to be alternative from the
day when the selection has been communicated to the
debtor.
Until then the responsibility of the debtor shall be governed
by the following rules:
(1) If one of the things is lost through a fortuitous event, he
shall perform the obligation by delivering that which the
creditor should choose from among the remainder, or that
which remains if only one subsists;
(2) If the loss of one of the things occurs through the fault of
the debtor, the creditor may claim any of those subsisting, or
the price of that which, through the fault of the former, has
disappeared, with a right to damages;
(3) If all the things are lost through the fault of the debtor,
the choice by the creditor shall fall upon the price of any one
of them, also with indemnity for damages.
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.
As stated earlier, generally, the right of choice belongs to the debtor unless
otherwise expressly stipulated. Hence, this provision provides for the rules governing
19

the responsibilities of the debtor when the creditor is given the right to choose among
the prestations. When such is the case, the following rules shall govern:
(1) When one of the things is lost through a fortuitous event, the creditor can choose
from among the remainder for the debtor to perform or deliver or the debtor has
to deliver or perform that which remains if only one subsists.
(2) When a thing is lost through debtors fault, the creditor may choose from among
those remaining or alternatively, the latter may claim for the price of the thing
which was lost with a right to damages.
(3) When all the things were lost through debtors fault, the creditor can demand the
payment of the price of any one of them with a right to indemnity for damages.
(4) When all the thing are lost through a fortuitous event, the obligation shall be
extinguished. (Art. 1174, which states that [E]xcept in cases expressly specified
by the law, or when it is otherwise declared by stipulation, or when the nature of
the obligation requires the assumption of risk, no person shall be responsible for
those events which, could not be foreseen, or which, though foreseen, were
inevitable, will apply).
These rules shall be applied as well in cases where some or all of the prestations
should become impossible in obligations to do or not to do.
And just as it is necessary for the debtor to communicate his choice to the
creditor, in this instance the creditor must also communicate his choice to the debtor
when the former is given the right of choice. And once the choice of the creditor has
been expressly conveyed to the debtor, the obligation ceases to be alternative. It
becomes a simple obligation and the debtor must take care of whatever the creditor
chose with the proper diligence of a good father of a family, unless the law or the
stipulation of the parties requires another standard of care and to deliver the same
properly.

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In the case of Estanislao Reyes vs Sebastiana Martinez et al., G.R. No. 32226.
December 29, 1930, the Court proffered an illustration where the right of choice was
granted to the creditor and the effectivity of such choice when the selection has already
been communicated to the debtor:
For a valuable consideration the defendants undertook to
cause to be conveyed to the plaintiff a parcel of land
containing one thousand coconut trees belonging to certain
heirs who were not yet of age, or in lieu thereof, if the
plaintiff should prefer, to convey to him other land of equal
value belonging to the defendants. The plaintiff thereafter
elected to take the parcel first indicated, and in subsequent
litigation between the parties over a different matter it was
taken for granted that this parcel would go to the plaintiff.
Held, in the action in which this question was first
controverted, that the plaintiff was bound by his election and
that he could not now reject said parcel and elect to take
other land under the alternative conceded in the contract.
Inasmuch also as the defendants had not yet procured title to
be made to the plaintiff, a term was fixed within which they
might cause such title to be transferred to the plaintiff,
failing in which they should become liable in damages to the
plaintiff for the value of the parcel which he had elected to
take. An election once made is binding on the person who
makes it, and he will not thereafter be permitted to renounce
his choice and take an alternative which was at first open to
him.
[Underscoring, supplied]

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Under this Article, when the right of choice is granted to the creditor, an
alternative obligation will cease to be one when the creditor has communicated his
choice among the prestations to the debtor.

Article 1206

Art. 1206. When only one prestation has been agreed upon,
but the obligor may render another in substitution, the
obligation is called facultative.
The loss or deterioration of the thing intended as a
substitute, through the negligence of the obligor, does not
render him liable. But once the substitution has been made,
the obligor is liable for the loss of the substitute on account
of his delay, negligence or fraud.
Based from the foregoing, a facultative obligation is one where only one
prestation has been agreed upon but the obligor may render another in a substitution.
The debtor is allowed to render a prestation as a substitute to the only obligation agreed
upon.
Hence, if Grace promised to give Rodrigo a car or a pick-up truck as a substitute,
then Graces obligation is called a facultative obligation.
As a default, it is the car which is to be given by Grace. But in case circumstances
would not allow it, Grace may deliver the pick-up truck instead. Prior the substitution,
there is no liability on the part of Grace if the pick-up truck was lost or deteriorated
despite her negligence or fraud. After all, even if it is no longer available as a substitute,
it was only that --- a substitute. It was not the principal obligation. However, when

22

substitution has taken place and Grace, through negligence, fraud or delay, allowed the
deterioration of the lick-up truck, then she will be liable.
The case of Martina Quizana vs Gaudencio Redugerio and Josefa Postrado,
G.R. No. L-6220, May 7, 1954 decided by the Supreme Court identifies a facultative
obligation. The main issue in the case was the nature and effect of the actionable
document from which the controversy arose. Said actionable document, in essence,
provides that Gaudencio Redugerio and Josefa Postrado, defendants-appellants begot a
loan of Php550.00 from Martina Quizana, plaintiff-appellee payable by the end of
January 1949. The second part of the same document further stated that in case of
failure to pay the loan on the specified date, they would mortgage a parcel of land
specified therein. Thus, when they failed to pay off the loan, they offered to pledge the
land specified and transfer its possession to the plaintiff-appellee but the latter refused
it. Hence, the Court explained facultative obligation, thus:
The decisive question at issue, therefore, is whether the
second part of the written obligation, in which the obligors
agreed and promised to deliver a mortgage over the parcel of
land described therein, upon their failure to pay the debt on
a date specified in the preceding paragraph, is valid and
binding and effective upon the plaintiff-appellee, the
creditor. This second part of the obligation in question is
what is known in law as a facultative obligation, defined in
article 1206 of Civil Code of the Philippines, which provides:
ART. 1206. When only one prestation has been
agreed upon, but the obligor may render
another in substitution, the obligation is called
facultative. x x x
[Underscoring, supplied]
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Alternative Obligations versus Facultative Obligations

The differences between alternative obligations and facultative obligations are as

follows:
In alternative obligations, several prestations are available but compliance with
only one is sufficient to extinguish the obligation while, in facultative obligations, only
one prestation is due but debtor is allowed to substitute it with another one.
In the former, the right of choice, as a default, is vested on the debtor but it may
be given to the creditor as long as it is expressly stipulated while in the latter, the right to
make the substitution is given only to the debtor. The loss of one or more of the
alternative prestations through fortuitous event, provided that there remains one lawful,
possible and could have been the object of the obligation, does not extinguish the
obligation in alternative obligations. On the other hand, in facultative obligations, the
loss of the thing agreed upon prior the substitution extinguishes the obligation.
If any of the alternative prestations are lost in an alternative obligation, then the
debtor is not liable as long as what remains is, again, lawful, possible and could have
been the object of the obligation. Meanwhile, if the substitution has taken place and the
thing substituted and which is now due is lost through the debtors fault, negligence or
fraud, then the debtor would be liable for the loss. And under the same circumstances, if
the principal thing is lost after substitution, the debtor is not liable whatever the reason
behind the loss is because the principal thing is no longer the thing that is due to be
delivered or to be performed.

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As to nullity, in alternative obligations, the nullity of one prestation does not

invalidate the obligation. The obligation would still exist as far as the remaining
prestations are concerned for as long as those remaining are lawful, possible, practical
and is an object of the obligation. On the other hand, in facultative obligations, the
nullity of the principal prestation renders the obligation invalid. The creditor, in this
case, cannot claim the substitute in the principal things stead even when said substitute
is valid.
How An Alternative Obligation Ceases To Be One

To summarize, the instances where an alternative obligation ceases to be one are

as follows:
1.) the moment the debtor performs one of the prestations rendering the
fulfillment of his obligation. Upon the exercise of the option to choose by
the person so entitled and having communicated the same to the creditor,
the obligation ceases to be an alternative one and becomes a simple
obligation.
2.) among the alternative prestations, all except one are impossible, unlawful
or that which could not have been the object of the obligation giving the
debtor no choice but to perform the only one which is possible, lawful and
could have been the object of the obligation;
3.) when the debtor has communicated his choice among the prestations,
hence, turning the obligation into a simple one;
4.) when among the prestations provided, only one is practicable (although
the rest may be lawful and could have been the object of the obligation as
well) leaving the debtor no choice but to perform that practicable one;

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5.) when, through the acts of the creditor, the debtor cannot make a choice.
Since the debtor is given no choice, he is without an alternative. Hence, no
alternative obligation exists;
6.) when all the objects of the obligation has been lost or the performance of
the obligation has become impossible through the fault of the debtor; and
7.) at the time the creditor communicated his choice among the prestations to
the debtor, in cases where the right of choice has been vested with the
creditor.

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References:
http://thelawdictionary.org/alternative-obligation/
http://www.legalaspects.ph/301/alternative-obligations/
http://www.chanrobles.com/cralaw/1930decemberdecisions.php?id=191
http://www.lawphil.net/judjuris/juri1918/aug1918/gr_l-12611_1918.html
http://www.lawphil.net/judjuris/juri2014/jun2014/gr_206806_2014.html
http://www.lawphil.net/judjuris/juri1951/apr1951/gr_l-3435_1951.html
http://sc.judiciary.gov.ph/jurisprudence/2002/jul2002/133250.htm
http://www.lawphil.net/judjuris/juri1954/aug1954/gr_l-6802_1954.html
http://www.lawphil.net/judjuris/juri1954/may1954/gr_l-6220_1954.html
http://www.lawphil.net/judjuris/juri1924/dec1924/gr_l-22738_1924.html
https://www.coursehero.com/file/p27eb3h/As-to-nullity-In-alternative-obligationsthe-nullity-of-one-prestation-does-not/
https://lspuobligationsandcontracts2014.wordpress.com/category/title-iobligations/chapter-3-different-kinds-of-obligations/section-3-alternative-obligations/
Sta. Maria, Melencio Jr. (2003). Obligations and Contracts, Texts and Cases, (2nd
Edition). Manila, Philippines: Rex Book Store.
Paras, Edgardo L. (2000). The Civil Code of the Philippines Book IV (14th Ed.). Manila,
Philippines: Rex Book Store.