- Statute
- Civil Code
- Article
- Art. 1229
- Topic
- Different Kinds of Obligations
- Status
- In force
- Book
- BOOK IV Obligations and Contracts
- Title
- TITLE I Obligations
- Chapter
- CHAPTER 3 Different Kinds of Obligations
- Formerly
- Art. 1154a of the old Civil Code
- Year
- 1949
- Cited by
- Multiple Supreme Court decisions
The provision
The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable. (1154a)
Intellegal Wiki · In plain terms
Empowers judges to fairly reduce an agreed penalty when the debtor has partly or irregularly performed the main obligation. Even where there has been no performance at all, courts may still cut a penalty that is unfair, excessive, or unconscionable.
An editorially maintained plain-language explanation of this provision — not legal advice.
Intellegal Wiki · How the courts apply it
In Barons Marketing Corp. v. Court of Appeals, the Supreme Court held: A creditor does not abuse its rights (Articles 19 and 21) by rejecting an installment proposal and suing to collect where it has legitimate business reasons; a creditor may reject partial payment (Article 1248), and courts may reduce iniquitous penalties (Article 1229).
One leading Supreme Court case applying this provision.
Cases applying this article
- Barons Marketing Corp. v. Court of Appeals G.R. No. 126486
- Nunelon R. Marquez v. Elisan Credit Corporation G.R. No. 194642
- Erminda F. Florentino v. Supervalue G.R. No. 172384
- Antonio Tan v. Court of Appeals G.R. No. 116285
- Clarita D. Aclado v. Government Service Insurance System G.R. No. 260428
- Jose v. Ramirez G.R. No. 237823
- Philippine Economic Zone Authority v. Pilhino Sales Corporation G.R. No. 185765
- Urban Consolidated Constructors Philippines v. The Insular Life Assurance Co. G.R. No. 180824
Other Supreme Court decisions also apply this article.