Short answer. When you held the right of choice and the debtor destroyed all alternatives through fault, you may choose the price of any one of them — plus indemnity for damages. You are not locked into the last one destroyed; you pick whichever value is most advantageous to you.
What the law says
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.
Civil Code, Article 1205 — Loss When the Creditor Has the Choice. Read the full provision →
How creditor-choice obligations work
Article 1205 governs alternative obligations where the creditor — not the debtor — holds the right to choose which prestation is delivered. This is the less common arrangement; usually the debtor chooses. When the creditor holds that right, the obligation stops being alternative only once the creditor communicates their selection to the debtor. Until that communication, Article 1205 sets out what happens when one or more of the alternatives disappears, depending on whether fault or chance caused the loss.
Three scenarios under Article 1205
The article handles three distinct situations. First: if one alternative is lost through chance, the creditor simply chooses from what remains. Second: if one is lost through the debtor's fault, the creditor may claim any of the surviving items, or the price of the one that was destroyed — plus damages. Third — the scenario you are facing — if all alternatives are lost through the debtor's fault, the creditor's choice falls upon the price of any one of them, plus indemnity for damages. You pick whichever price maximizes your recovery, not just the last one that was destroyed.
The same rules apply to services
Article 1205 ends with an important extension: 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. So if the alternative obligation involved services or acts (not just goods), and all of them become impossible through the debtor's fault, the same framework applies. You recover the equivalent value of whichever alternative service you choose, plus damages for the broader harm caused by the debtor's fault in making them all impossible.
Damages on top of the price
Notice that Article 1205 awards indemnity for damages alongside the price, not instead of it. The price of the chosen alternative compensates you for losing the thing itself. Damages cover the additional harm — lost profits, consequential losses, costs you incurred because of the debtor's fault. These are separate heads of recovery, and both are available. What you will need to prove is that the debtor's fault actually caused the destruction of the alternatives, and the extent of the additional harm beyond the value of the items themselves.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Romago, Inc. and Francisco Gonzalez vs. Associated Bank (Now United Overseas Bank Phils.) and Metallor Trading Corporation, G.R. No. 223450, February 22, 2023 — read the decision on LawPhil →
- Bank of the Philippine Islands vs Amador Domingo (deceased) substituted by his children, Joann Moya, et al, G.R. No. 169407, March 25, 2015 — read the decision on LawPhil →
- Chester Babst, vs. Court of Appeals, et al, G.R. No. 99398, January 26, 2001 — read the decision on LawPhil →
- Elizalde Steel Consolidated, Inc., vs. Court of Appeals, et al, G.R. No. 104625, January 26, 2001 — read the decision on LawPhil →