BL1 1223 - 1230
BL1 1223 - 1230
BL1 1223 - 1230
4.
Principal obligation can stand by itself and does not depend for its
validity and existence upon another obligation
Accessory obligation attached to a principal obligation, cannot
stand alone
Obligation 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 law
Conventional penal clause by stipulation of parties
Compensatory penal clause penal takes place of damages
Punitive penal clause imposed merely as punishment for breach
Subsidiary or alternative penal clause only the penalty can be
enforced
Joint or cumulative penal clause both the principal and penal
clause can be enforced
GR: 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. damages
b. 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 penalty
2. If the debtor is guilty of fraud in the fulfillment of
the obligation
3. If there is express stipulation that the other
damages or interests are demandable to the
penalty in the penal clause
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 time
1. 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. debtors fault creditor may demand for
penalty
b. creditors fault he cannot claim the penalty
c. fortuitous event principal obligation and
penalty are extinguished
Debtor 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.
1229.