I. Introduction and Definition
A facultative obligation is one where only one prestation is due, but the obligor has reserved the right to substitute another distinct prestation in lieu of that which is originally due. It is governed by Article 1206 of the Civil Code, which states: “The right of choice belongs to the debtor, unless it has been expressly granted to the creditor.” The principal characteristic is the existence of a principal prestation identified from the inception of the obligation, with a substitute or alternative prestation that is merely accessory and potential.
II. Distinction from Alternative Obligations
This distinction is critical. In an alternative obligation (Art. 1199), several prestations are due, but the complete performance of one extinguishes the obligation. The choice, unless granted to the creditor, also belongs to the debtor. However, in a facultative obligation, only one prestation is due from the beginning. The substitute is not due; it is merely a power of substitution granted to the obligor. The loss of the principal thing through a fortuitous event extinguishes the obligation in a facultative obligation, whereas in an alternative obligation, the loss of one through fortuitous event does not extinguish the obligation if other alternatives remain.
III. The Right of Choice
As per Article 1206, the right to make the substitution is primarily vested in the debtor/obligor. This right is a personal privilege and must be exercised expressly and communicated to the creditor. The parties may, by express stipulation, grant this right of choice to the creditor. In the absence of such stipulation, the creditor cannot compel the debtor to deliver the substitute; the creditor’s right is to demand the principal prestation.
IV. Effect of Loss or Fortuitous Event
The rule on loss is pivotal in distinguishing this obligation. If the principal object is lost through fortuitous event (caso fortuito) or without the fault of the obligor, the obligation is extinguished. The obligor cannot be compelled to deliver the substitute, nor is he liable for damages. Conversely, if the substitute object is lost through fortuitous event, the obligation remains and is not extinguished; the obligor must still deliver the principal object. If the loss of either object is due to the debtor’s fault, he shall be liable for damages.
V. Effect of Creditor’s Rights
The creditor’s rights are limited to the principal prestation. He cannot demand the substitute unless the debtor elects to deliver it. However, once the debtor validly communicates his choice to substitute, the obligation is converted into a simple one to deliver the substitute. From that moment, the creditor can demand the substitute prestation.
VI. When Substitution is Not Allowed
The debtor’s right to substitute is extinguished if, prior to his communication of choice, the principal object perishes through fortuitous event, or if through his fault it becomes impossible or its delivery is rendered unlawful. Furthermore, if the creditor has legitimately and definitively refused to accept a tardy tender of the principal object, the debtor may lose his right to substitute.
VII. Application of the Principle of “Facultas Non Praestat Vitium”
This maxim means that the faculty or option does not carry with it the vice. In facultative obligations, if the principal object has a hidden defect or vice, the debtor, by substituting it with a sound substitute, is not liable for the defect in the principal object he did not deliver. His liability is only on the warranty of the substitute he actually delivers.
VIII. Illustrative Example
An obligation “to deliver a specific Toyota car (Principal), but I may, if I so choose, deliver a specific Honda motorcycle instead (Substitute).” Here, only the car is due. If the car is destroyed by earthquake, the obligation is extinguished. If the motorcycle is destroyed, the obligation to deliver the car remains. If the debtor, before any loss, informs the creditor he will deliver the motorcycle, he is then bound to deliver the motorcycle, and the car is no longer due.
IX. Practical Remedies
For the Creditor: 1) In drafting contracts, if performance flexibility is desired, consider structuring the obligation as alternative rather than facultative to ensure a right to performance even if one object is fortuitously lost. 2) Demand specific performance of the principal prestation upon maturity if the debtor has not made a valid substitution. 3) If the debtor attempts to substitute after the principal has been lost through his fault, refuse the substitution and sue for damages based on the value of the principal object. For the Debtor: 1) Clearly and formally communicate the election to substitute to the creditor to avoid disputes over which prestation is currently due. 2) Exercise the right of substitution promptly upon maturity to prevent a situation where the principal object perishes, extinguishing the obligation you might have wished to perform via the substitute. 3) Ensure the substitute prestation is ready and deliverable upon communication of your choice, as failure to deliver it thereafter constitutes default. In litigation, the party asserting that an obligation is facultative (and thus extinguished by the fortuitous loss of the principal) bears the burden of proof to show the existence of such a stipulation reserving a right of substitution.