Text of the provision
Art. 1226. In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of noncompliance, if there is no stipulation to the contrary. Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the obligation. The penalty may be enforced only when it is demandable in accordance with the provisions of this Code.
(1152a)
Civil Code of the Philippines, Republic Act No. 386, approved June 18, 1949, effective August 30, 1950. Reproduced in full; verified verbatim against the LawPhil and ChanRobles official-text renderings.
What this article means
In an obligation with a penal clause, the penalty substitutes for damages and interest on breach, unless otherwise stipulated. Damages are still due if the obligor refuses to pay the penalty or is guilty of fraud. The penalty is enforceable only when the obligation is demandable.
Related provisions
- Article 1225 — Which Obligations Are Divisible or Indivisible.
- Article 1227 — No Escape by Paying the Penalty.
Cases citing this article
- Merrie Anne Tan vs. First Malayan Leasing and Finance Corp., New Unitedware Marketing Corp, G.R. No. 254510, June 16, 2021 — read the decision on LawPhil →
- Spouses Eduardo and Lydia Silos vs. Philippine National Bank, G.R. No. 181045, July 2, 2014 — read the decision on LawPhil →
- Edmerito Ang Gobonseng, et al. vs. Unibancard Corp, G.R. No. 160026, December 10, 2007 — read the decision on LawPhil →
- Ruby Shelter Builders vs. Romeo Y. Tan, G.R. No. 217368, August 5, 2024 — read the decision on LawPhil →
- Theo-Pam Trading Corporation vs. Bureau of Plant Industry and the Commission on Audit UDK-16666 January 19, 2021 Ismael C. Bugna, Jr., Beverly C. Mananguite, Carissa D. Galing and Josefina O. Pelo, G.R. No. 242764, January 19, 2021 — read the decision on LawPhil →
Compiled automatically from Supreme Court decisions published on LawPhil that expressly cite this article, most frequently cited first. A listing means the decision cites the provision — it is not a statement that the case is the leading authority, and it does not show whether a ruling has since been modified or abandoned. Always read the decision itself.