DIFFERENT KINDS OF OBLIGATIONS CHARACTERISTICS OF A CONDITION:

1. FUTURE AND UNCERTAIN

PURE AND CONDITIONAL OBLIGATIONS - it is not enough that it be future, it must also be uncertain.
- Art. 1179 uses the word OR to distinguish pure obligation
[1] ART 1179. from conditional obligation and obligation with a period.
Every obligation whose performance does not depend 2. PAST BUT UNKNOWN
upon a future or uncertain event, or upon a past event unknown - may refer to a past event unknown to the parties.
to the parties, is demandable at once. - future event: very occurrence & time of such occurrence
Every obligation which contain a resolutory condition must be UNCERTAIN
shall also be demandable, without prejudice to the effects of
the happening of the event. A condition must not be impossible ​( Art. 1183 [5] ).

PURE OBLIGATION PRINCIPAL KINDS OF CONDITION:

- not subject to any condition and no specific date is mentioned for 1. SUSPENSIVE CONDITION
its fulfillment and is, therefore, immediately demandable. - Condition precedent / Condition antecedent
- the fulfillment of the condition will give rise to an obligation.
Example: - if the condition does not take place, tie of the law does not
D (obligor) obliges himself to pay C (obligee) P1 000. ​The appear.
obligation is immediately demandable​ because there is no condition and - until the condition takes place, obligation is a mere hope.
date mentioned. Example:
If the loan has just been contracted by D, ​the period/duration will I will my land to you if it is decided that the land would be mine in
depend upon the nature of the obligation and circumstances​ (Art. 1197). the division of my deceased father’s estate. ​My obligation IS
DEMANDABLE ONLY after the condition is fulfilled.​ In the meantime, I am
CONDITIONAL OBLIGATION not liable to you.
- one whose consequences are subject in any way or another to the
fulfillment of a condition. 2. RESOLUTORY CONDITION
- Condition subsequent
CONDITION - the fulfillment of this will extinguish an obligation already
- A future and uncertain event, upon the happening of which, the existing.
effectivity or extinguishment of an obligation subject to it depends. - tie of law is consolidated.
- its effects flow, but over it hovers the possibility of
termination.
Example: 1. THE DEBTOR PROMISES TO PAY WHEN HIS MEANS PERMIT
D, in payment of his debt to C, binds himself to given C P3 000 HIM TO DO SO.
monthly allowance until he graduates from college. ​D’s obligation is - what is left only to his will is the duration of the period.
demandable NOW but it shall be extinguished when C graduates from - if the obligor/debtor and obligee/creditor cannot agree on
college (resolutory). the period, the court shall fix the same on the application of
either party (Art. 1197).
AN OBLIGATION IS DEMANDABLE AT ONCE…
1. When it is pure ​(Art. 1179). 2. other cases:
2. When it is subject to a resolutory condition. a. “LITTLE BY LITTLE”
3. When it is subject to a resolutory period​ (Art. 1193) b. “AS SOON AS POSSIBLE”
c. “FROM TIME TO”
PAST EVENT UNKNOWN TO THE PARTIES d. “AT ANY TIME I HAVE THE MONEY”
Past event is not a condition because obligation is only subjected e. “IN PARTIAL PAYMENTS”
to a condition that depends upon whether the even will or will not happen. f. “WHEN I AM IN A POSITION TO PAY”
Example:
X is the owner of the land that is being claimed by Y. Last week, [3] ART 1181.
the supreme court has rendered a decision upholding the right of X. X has In conditional obligations, the acquisition of rights, as
not yet received the decision of the court. Now, X oblige himself to sell his well as the extinguishment or loss of those already acquired,
land to B, should he win the case against Y. shall depend upon the happening of the event which
X would be bound to sell the land to B upon receipt of notice that constitutes the condition.
he had won the case.
EFFECTS OF HAPPENING OF CONDITION:
[2] ART 1180. 1. ACQUISITION OF RIGHTS
When the debtor binds himself to pay when his means - suspensive condition
permit him to do so, the obligation shall be deemed to be one - depends upon the happening of the event which constitutes
with a period, subject to the provisions of article 1197. condition
Examples:
DURATION OF PERIOD DEPENDS ON THE WILL OF DEBTOR 1. T will give some property to H provided T is going to die within 2
years.
PERIOD If T died after 2years, ​the situation would be the same AS IF NO
- a future and uncertain event upon the arrival of which the obligation PROVISION WAS MADE.
subject to it either arises or is extinguished. 2. The surrender of the sweepstakes ticket is a condition precedent to
the payment of the prize.
 2. LOSS OF RIGHTS ALREADY ACQUIRED 6. as to numbers:
- resolutory condition a. CONJUNCTIVE ​- several conditions & ALL must be fulfilled
Example: b. DISJUNCTIVE ​- several conditions & ONLY ONE or SOME
A lease contract expressly stipulates that R, lessor, may terminate must be fulfilled
the lease in case his children need the lease premises. ​The 7. as to divisibility:
happening of the condition depends upon the will of a THIRD a. DIVISIBLE ​- susceptible of partial performance
PERSON - R’s children. b. INDIVISIBLE ​- NOT susceptible of partial performance

[4] ART 1182. POTESTATIVE CONDITION

When the fulfillment of the condition depends upon the - suspensive in nature.
sole will of the debtor, the conditional obligation shall be void. - depends upon the sole will of one of the contracting parties.
If it depends upon the will of a third person, the obligation shall
take effect in conformity with the provisions of this Code. SUSPENSIVE CONDITION DEPENDS UPON WILL OF DEBTOR
1. CONDITIONAL OBLIGATION VOID
CLASSIFICATIONS OF CONDITIONS: - happens when potestative condition depends solely upon
1. as to effect: the will of the debtor because its validity and compliance
a. SUSPENSIVE ​ - gives rise depends upon the will of debtor.
b. RESOLUTORY ​- extinguishes - therefore, it cannot be easily demenaded.
2. as to form: Examples:
a. EXPRESS ​- condition is CLEARLY STATED 1. I will pay you if I want.
b. IMPLIED ​- condition is MERELY INFERRED 2. I will pay you after I recover what X owes.
3. as to possibility: 3. I will continue to lease your property for as long as I need the
a. POSSIBLE ​- capable of fulfillment premises and pay the rent.
b. IMPOSSIBLE ​- NOT capable of fulfillment
4. as to cause or origin: 2. ONLY THE CONDITION VOID
a. POTESTATIVE ​- depends upon one of the contracting - the obligation is a pre-existing one and does not depend on
parties the fulfillment of the potestative condition.
b. CASUAL ​- upon chance or 3rd person - only the condition is void leaving unaffected the obligation
c. MIXED ​- partly upon chance and partly upon the 3rd person itself.
5. as to mode: Example:
a. POSITIVE ​- performance of an act D borrowed P10 000 from C, payable within 2months.
b. NEGATIVE ​- omission of an act Subsequently, D promised to pay C after D sells his car to which C agreed.
Only the condition is void, not the pre-existing obligation of D to pay C.
SUSPENSIVE CONDITION DEPENDS UPON WILL OF CREDITOR SUSPENSIVE CONDITION DEPENDS “PARTLY” UPON WILL OF
- obligation is valid. DEBTOR
- partly upon the will of debtor and partly upon the will of a third
Example: person or upon a chance are VALID.
“I will pay you my indebtedness upon your demand.” - however, it is void if the debtor has the power to comply or not
This is for creditor’s benefit, it is up to him to enforce his right or comply.
not.
[5] ART 1183.
RESOLUTORY CONDITION DEPENDS UPON WILL OF DEBTOR Impossible conditions, those contrary to good customs
- the obligation is valid although its fulfillment depends upon the sole or public policy and those prohibited by law shall annul the
will of the debtor (seller). obligation which depends upon them. If the obligation is
divisible, that part thereof which is not affected by the
CASUAL CONDITION
impossible or unlawful condition shall be valid.
- depends upon chance or upon the will of a third person, valid.
The condition not to do an impossible thing shall be
Examples:
considered as not having been agreed upon.
1. X, building contractor, obliges himself in favor of Y, owner, to repair
at X’s expense any damage that may be caused to the building by
WHEN ART 1183 APPLIES
any earthquake that’ll occur within 10years from the date of its
- Art 1183 refers to SUSPENSIVE conditions.
completion.
- applies only to cases where the impossibility already existed at the
2. S binds himself to sell his land to B if he wins a case which is
time obligation was constituted.
pending.
KINDS OF IMPOSSIBLE CONDITIONS:
MIXED CONDITION
1. PHYSICALLY IMPOSSIBLE CONDITIONS
- valid if the suspensive condition depends partly upon chance and
- cannot exist oR cannot be done
partly upon the will of a third person/
Examples:
Example: 1. I will pay you P10 000 if it will not rain for one year in the
X, building contractor, obliges himself in favor of Y, owner, to repair Philippines.
at X’s expense any damage to the building after an earthquake if found by 2. I will pay you P10 000 if you can carry twenty canvas of palay on
the panel (3rd party) that construction defects contributed in any way to the your shoulder.
damage.
Both must take place in order that X’s obligation to arise.​ The 2. LEGALLY IMPOSSIBLE CONDITIONS
decision of the panel must be accepted by X and Y as final ​unless it can - contrary to law, morals, good customs, public order, or
be shown that panel is favouring X or Y. public policy.
Examples: Examples:
X will give Y P1 000 if Y
1. will kill Z (against law) I will give you P10 000, if you sell my land and a car, if you kill
2. will be the common-law of X (against morals) Pedro.
3. will slap his father (against good customs) The obligation to give P10 000 is valid, but the obligation give a car
4. will publicly advocate the overthrow of the government is void (impossible).
(against public order)
5. will not appear as a witness against X in a criminal case
4. ONLY THE CONDITION VOID
(against public policy)
- if the obligation is pre-existing and does not depend on the
impossible condition, only the condition is void.
EFFECTS OF IMPOSSIBLE CONDITIONS:
Example:
1. CONDITIONAL OBLIGATION VOID
D borrowed P1 000 from C. If C later agreed to kill X before D pays
- annul the obligation which depends upon them.
him, ​the condition to kill X is void but not the pre-existing obligation to pay
- both the obligation and condition are void.
C.
-
2. CONDITIONAL OBLIGATION VALID
[6] ART 1184.
- if the condition is negative, that is, not to and impossible
The condition that some event happen at a determinate
thing, it is disregarded and the obligation is rendered pire
and valid. time shall extinguish the obligation as soon as the time expires
- negative condition may not to be given an impossible thing. or if it has become indubitable that the event will not take place.
Examples:
1. I will sell you my land if you do not carry 20 canvas on your POSITIVE CONDITION
shoulder. - refers to suspensive condition
2. I will give you my land if you do not give me a dog that talks. - happening of an event at determinate time
OBLIGATIONS ARE PURE AND THEREFORE, DEMANDABLE
The obligation is extinguished…
AT ONCE.
1. as soon as time expires without the event taking place.
2. as soon as it has become indubitable that the event will not
3. ONLY THE AFFECTED OBLIGATION VALID
take place although the time specifies has not expired.
- if the obligation is divisible, the part is not affected by the
impossible condition is VALID. Example:
X obliges himself to give B P10 000 if B will marry C before B
reaches the age of 23.
a. X IS LIABLE if B marries C before he reaches the age of 23.
 b. X IS NOT LIABLE if B marries C at the age of 23 or after he CONSTRUCTIVE FULFILLMENT OF SUSPENSIVE CONDITION
reaches 23. ​The obligation is extinguished as soon as B becomes 23. 3 requisites for the application of this article:
c. If B dies at the age of 22 w/o marrying C, the obligation is 1. The condition is SUSPENSIVE.
EXTINGUISHED because it has become indubitable that the condition will 2. The obligor actually prevents the fulfillment of the condition.
not take place. 3. He acts voluntarily.
Examples:
[7] ART 1185. 1. X agreed to give Y a 5% commission if Y could sell the land. Y
The condition that some event will not happen at a found a buyer. To evade the payment of the commission agreed
determinate time shall render the obligation effective from the upon, X himself sold to the buyer the property at a lower price w/o
moment the time indicated has elapsed, or if it has become the aid of Y.
evident that the event cannot occur. 2. S promised to sell his land to B if B would be able to secure a loan
If no time has been fixed, the condition shall be deemed from a certain bank. Later on, S changed his mind about selling his
fulfilled at such time as may have probably been contemplated, land. He induced the bank not to give Y a loan.
S is still liable to sell his land.
bearing in mind the nature of the obligation.
CONSTRUCTIVE FULFILLMENT OF RESOLUTORY CONDITION
NEGATIVE CONDITION
- with respect to the debtor who is bound to return what he has
- event will not happen at a determinate time.
received upon the fulfillment of the condition (Art. 1190).
- if no time is fixed, the circumstances shall be considered to arrive
Example:
at the intention of the parties.
X obliges himself to allow Y to occupy the former’s house in MNL
Example: as long as X is assigned by their company in the province. When Y
X binds himself to give P10 000 if B is not yet married to C on learned that X would be transferred to MNL, he was able to induce the
December 30. pres of the company to assign another person in place of X.
a. X IS NOT LIABLE TO B if B marries C on Dec 30 or prior The obligation of X is extinguished​ because the fulfillment of the
thereto. resolutory condition was voluntarily prevents by Y. Hence, Y must vacate
b. X IS LIABLE TO B if on Dec 30, B is not married to C and if B the house (Art. 1190).
marries C after Dec 30. ​The condition is fulfilled because B is not yet
married. [9] ART 1187.
c. Suppose C dies on Nov 30 w/o having been married to B. ​The The effects of a conditional obligation to give, once the
condition is fulfilled; therefore, obligation is rendered.
condition has been fulfilled, shall retroact to the day of the
constitution of the obligation. Nevertheless, when the
[8] ART 1186.
The condition shall be deemed fulfilled when the obligor obligation imposes reciprocal prestations upon the parties, the
voluntarily prevents its fulfillment. fruits and interests during the pendency of the condition shall
be deemed to have been mutually compensated. If the Examples:
obligation is unilateral, the debtor shall appropriate the fruits 1. C obliged himself to condone the debt of D, his lawyer, if D wins
and interests received, unless from the nature and C’s case. In this case, ​the fulfillment of condition has retroactive
circumstances of the obligation it should be inferred that the effect​ because D’s debt may increase because of interest.
2. Suppose, the obligation of C is to construct D’s house for free. In
intention of the person constituting the same was different.
this case, ​there is no retroactive effect if condition is fulfilled.
In obligations to do and not to do, the court shall
determine, in each case, the retroactive effect of the condition RETROACTIVE EFFECTS AS TO GIVE FRUITS AND INTERESTS IN
that has been complied with. OBLIGATION TO GIVE
1. IN RECIPROCAL OBLIGATIONS
RETROACTIVE EFFECTS OF FULFILLMENT OF SUSPENSIVE
- no retroactivity because the fruits and interests received
CONDITION
during the pendency of the condition are deemed to have
1. IN OBLIGATIONS TO GIVE
been mutually compensated.
- obligation only becomes demandable when condition is
Example:
fulfilled; however, once the condition is fulfilled, its effect
B lost the case on Dec 4, S must deliver the land and B must pay
shall retroact to the day when the obligation was
P50 000.
constituted.
S does not have to give the fruits received from the land before
- conditional is only an accidental element of a contract.
Dec 4 and B is not obliged to pay legal interests on the price since fruits
Example:
and interests are mutually compensated.
On Jan 20, S agreed to sell his land to B for P20 000 should B lose
.
a case involving the recovery of another land. On April 10, S sold his land
2. IN UNILATERAL OBLIGATIONS
to C. B lost the case on Dec 4.
- no retroactive effects because they are gratuitous.
Before Dec 4, B had no right to demand the sale of land by S.
- debtor receives nothing from the creditor.
When the condition, however, was fulfilled on Dec 4, B could act that the
Example:
lance was entitled to him since Jan 20. ​B will have a better right over the
The promise of S was to donate the land to B.
land than C.
S has to deliver the land but he has the right to keep all the fruits
If the land was sold by B to D on May 15, ​D would still have a
and interests he may have received during Jan 20 - Dec 4. S shall render
better right as against C​ since the sale by will be considered valid.
an accounting of fruits received during its pendency,

2. IN OBLIGATIONS TO DO OR NOT TO DO
- no fixed rule is provided.
[10] ART 1188. (3) When the thing deteriorates without the fault of the
The creditor may, before the fulfillment of the condition, debtor, the impairment is to be borne by the creditor;
bring the appropriate actions for the preservation of his rights. (4) If it deteriorates through the fault of the debtor, the
The debtor may recover what during the same time he creditor may choose between the rescission of the
has paid by mistake in case of a suspensive condition. obligation and its fulfillment, with indemnity for damages
in either case.
RIGHTS PENDING FULFILLMENT OF SUSPENSIVE CONDITION (5) If the thing is improved by its nature, or by time, the
1. RIGHTS OF CREDITOR improvement shall inure to the benefit of the creditor;
- may take/bring appropriate actions for the preservation of (6) If it is improved at the expense of the debtor, he shall
his right, as the debtor may render nugatory the obligation have no other right than that granted to the usufructuary.
upon the happening of the condition.
2. RIGHTS OF DEBTOR REQUISITES FOR APPLICATION OF ART 1189:
- entitled to recover what he has paid by mistake prior to the
1. The obligation is a REAL OBLIGATION
happening of the suspensive condition.
2. The object is a SPECIFIC or DETERMINATE THING
- solutio indebiti ​- based on the principle that no one shall
3. The obligation is subject to a SUSPENSIVE CONDITIONS
enrich himself at the expense of another.
4. The condition is FULFILLED
5. There is LOSS, DETERIORATION, or IMPROVEMENT of the
[11] ART 1189. thing during the pendency of the condition
When the conditions have been imposed with the
intention of suspending the efficacy of an obligation to give, KINDS OF LOSS:
the following rules shall be observed in case of the 1. PHYSICAL LOSS
improvement, loss or deterioration of the thing during the - when a thing perishes as when a house is burned and
pendency of the condition: reduced to ashes.
2. LEGAL LOSS
(1) If the thing is lost without the fault of the debtor, the
- when a thing goes out of commerce (expropriate) or when a
obligation shall be extinguished;
thing before is legal becomes illegal.
(2) If the thing is lost through the fault of the debtor, he shall 3. CIVIL LOSS
be obliged to pay damages; it is understood that the - when a thing disappears in such a way that its existence is
thing is lost when it perishes, or goes out commerce, or unknown (missing dog) or if known, but cannot be
disappears in such a way that its existence is unknown recovered, whether as a matter of fact (ring dropped at sea)
or it cannot be recovered; or of law (property is lost through prescription).
RULES IN CASE OF LOSS, DETERIORATION, OR IMPROVEMENT OF USUFRUCT
THING DURING PENDENCY OF SUSPENSIVE CONDITION: - is the right to enjoy the use and fruits of a thing belonging to
DETERIORATE ​- value is reduced or impaired another.
IMPROVE ​- value is increased or enhanced Rights granted:
1. LOSS OF THING WITHOUT DEBTOR’S FAULT ● May make useful improvements/expenses as long as he does not
- X obliged himself to give Y his car worth P100 000 if Y will alter its form or substance
sell X’s property. The car was lost w/o the fault of X. ● No right to be indemnified
Obligation is extinguished and X is not liable to Y. ● May remove improvement w/o damage to the property
- A person is not liable for fortuitous event. ● May set off the improvements he may have made on the property
2. LOSS OF THING THROUGH DEBTOR’S FAULT against any damages to the same.
- same example, if the thing is lost because of the negligence
of X, Y will be entitled to demand changes. [12] ART 1190.
3. DETERIORATION OF THING WITHOUT DEBTOR’S FAULT When the conditions have for their purpose the
- Car’s windshield was broken due to an accident without the extinguishment of an obligation to give, the parties, upon the
fault of X, thereby reducing its value to P90 000, Y will have fulfillment of said conditions, shall return to each other what
to suffer the deterioration/impairment in the amount of P10
they have received.
000.
In case of loss, deterioration, or improvement of the
4. DETERIORATION OF THING THROUGH DEBTOR’S FAULT
- In this case, Y may choose between: thing, the provisions which, with respect to the debtor, are laid
a. Rescission/cancellation of the obligation with down in the preceding article shall be applied to the party who
damages. In this case, X is liable to pay Y P100 000 is bound to return.
plus incidental damages (if any). As for obligations to do and not to do, the provisions of
b. Fulfillment of the obligation also with damage ( Art the second paragraph of ART. 1187 [9] shall be observed as
1191 [13] ). X is bound to give Y the car + damages. regards the effect of the extinguishment of the obligation.
5. IMPROVEMENT OF THING BY NATURE OR BY TIME
- Market value of the car increased, who gets the benefit? EFFECTS OF FULFILLMENT OF RESOLUTORY CONDITION
The improvement shall inure to the benefit of Y. If the car 1. IN OBLIGATIONS TO GIVE
would deteriorate, Y would suffer - that is why it is just fair. - fulfilled: the obligation is extinguished (Art. 1181 [9] )
6. IMPROVEMENT OF THING AT EXPENSE OF DEBTOR - parties are obliged to return to each other what they have
- X had the car painted and its seat cover changed at his received under the obligation.
expense. In this case, X will have the right granted to a a. There is a return to the status quo.
usufructuary with respect to improvements made on the
thing held in usufruct.
 b. In case the thing will be returned is legally in the possession This is understood to be without prejudice to the rights
of a 3rd person but acted in bad faith, the remedy of the of third persons who have acquired the thing, in accordance
party entitled to restitution is against the other. with articles 1385 and 1388 and the Mortgage law.
c. The obligation of mutual restitution is absolute.
d. The retroactivity admits exceptions according as the
KINDS OF OBLIGATION ACCORDING TO THE PERSON OBLIGED
obligation is bilateral or unilateral.
1. UNILATERAL
Examples:
- When only one party is obliged to comply w/ a prestation
1. X allows Y to use X’s car until he returns from the province. Upon
Example:
the return of X, Y must give back the car. ​The parties intend the
Donation; In a contract of loan, the lender has the obligation to
return of the car.
give. After the lender has complied w/ his obligation, the debtor has the
2. X binds himself to give Y P500 a month until Y passes CPAE. If Y
obligation to pay.
passes, he need not return the amounts he has received. ​The
parties do not intend the return of the same.
2. BILATERAL
2. IN OBLIGATIONS TO DO OR NOT TO DO - both parties are mutually bound to each other.
- the courts shall determinate the retroactive effect of the - both parties are debtor and creditor of each other.
fulfillment of the resolutory condition. a. RECIPROCAL OBLIGATIONS
- arise from the same cause and in which each party
APPLICATION OF ART. 1189 TO PARTY WITH OBLIGATION TO is a debtor and creditor of each other.
RETURN Example:
The fulfillment of the resolutory condition converts the creditor into Contract of sale; Seller is the creditor (to price) and debtor (to
debtor, and the debtor into creditor. thing), Buyer is the creditor (to thing) and debtor (to price).
b. NON-RECIPROCAL OBLIGATIONS
[13] ART 1191. - those which do not impose simultaneous and
The power to rescind obligations is implied in reciprocal correlative performance on both parties.
ones, in case one of the obligors should not comply with what - performance of one party is not dependent on the
performance of the other.
is incumbent upon him.
Example:
The injured party may choose between the fulfillment and
X borrowed money from Y, while Y borrowed X’s car. ​The
the rescission of the obligation, with the payment of damages obligations are not dependent upon each and are not simultaneous.
in either case. He may also seek rescission, even after he has
chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless
there be just cause authorizing the fixing of a period.
REMEDIES IN RECIPROCAL OBLIGATIONS: LIMITATIONS ON RIGHT TO DEMAND RESCISSION
1. CHOICE OF REMEDIES 1. RESORT TO THE COURTS
- one of the obligors does not comply with his duty, the - rescission is juridical or one granted by the court
aggrieved party may choose between: - Injured party has to resort to the courts to assert his rights
a. Fulfillment for specific performance + damages juridically (to recover what he has delivered under the
b. Rescission of the obligation + damages contract).
2. REMEDIES OF RESCISSION FOR NON-COMPLIANCE - the other party must be given the chance to be heard.
- must be distinguished from the ​subsidiary ​action for
rescission by reason of ​lesion ​or damage and from 2. POWER OF COURT TO FIX PERIOD
cancellation of a contract based. - the court has discretionary power to allow a period within
Example: which a person in default, may be permitted to perform his
S sold his car to B. S would deliver the car and the necessary obligation.
document duly signed by him to B at the house of C on Dec 1 and B would
deliver the payment at the same date and place, 3. RIGHT OF THIRD PERSON
If S does not comply… - If the thing is in the hands of a third person who acted in
a. B may demand the delivery of the car with damages. good faith, RESCISSION IS NOT AVAILABLE AS A
b. B may demand from the court the rescission the contract, REMEDY.
also with damages.
4. SUBSTANTIAL VIOLATION
COURT MAY GRANT GUILTY PARTY TERM FOR PERFORMANCE - Rescission will not be granted for SLIGHT BREACHES OF
The court shall order the rescission claimed UNLESS there is a CONTRACT; the violation should be substantial.
cause for granting the party a term/period for the performance of his
obligation. 5. WAIVER OF RIGHT
ONLY APPLIES if the guilty party is willing to comply with his - Right to rescind may be waived.
obligation but needs time. - the acceptance of money as a security is considered as a
waiver of the right to rescind in case of nonpayment by the
REMEDIES ARE ALTERNATIVE buyer.
He is privileged to choose only one of the remedies, BUT he may
also seek rescission, even after he has chosen fulfillment, if the latter RESCISSIONS WITHOUT PREVIOUS JUDICIAL DECREE
should become impossible. 1. WHERE AUTOMATIC RESCISSION EXPRESSLY STIPULATED
- an agreement that violation of the terms of the contract
would cause cancellation.
 2. WHERE CONTRACT STILL EXECUTORY OBLIGATIONS WITH A PERIOD
- No performance of both parties, but one is ready and willing
to comply with what is incumbent upon him and the other is [15] ART 1193.
not.
Obligations for whose fulfillment ​a day certain has been
- The willing party may, by his own declaration, rescind the
fixed, shall be demandable only when that day comes.
contract.
Obligations with a resolutory period take effect at once,
[14] ART 1192. but ​terminate upon arrival of the day certain.
In case both parties have committed a breach of the A day certain is understood to be that which must
obligation, the liability of the first infractor shall be equitably necessarily come, although it may not be known when.
tempered by the courts. If it cannot be determined which of the If the uncertainty consists in whether the day will come
parties first violated the contracts, the same shall be deemed or not, the obligation is conditional, and it shall be regulated by
extinguished, and each shall bear his own damage. the rules of the preceding section.

WHERE BOTH PARTIES ARE GUILTY OF BREACH OBLIGATION WITH A PERIOD

1. FIRST INFRACTOR KNOWN - One whose effects or consequences are subjected in one way or
- Liability of the first infractor shall be equitably reduced. another to the expiration or arrival of said period or term.
2. FIRST INFRACTOR CANNOT BE DETERMINED
- The court shall not provide remedy to either of the parties. PERIOD
- The contract shall not be enforced. - a future and uncertain event upon tha arrival of which the obligation
subject to it either rises or is terminated.

PERIOD CONDITION

AS TO Certain event which Uncertain event.

FULFILLMENT must happen sooner
or later.

AS TO TIME Only to the future. Also to a past event

unknown to the
parties.

- - -
 b. INDEFINITE PERIOD
AS TO INFLUENCE Merely fixes the time Causes an obligation
ON THE for the efficaciousness either to arise or to - It is not fixed or it is not known when it will come.
OBLIGATION of the obligation. cease. - The courts are usually empowered by law to fix the
same.
AS TO EFFECT, Empowers the court to Invalidates the
WHEN LEFT TO fix the duration obligation. [16] ART 1194.
DEBTOR’S WILL thereof.
In case of loss, deterioration or improvement of the thing
AS TO Does not have Does have before the arrival of the day certain, the rules in article 1189 [11]
RETROACTIVITY OF shall be observed.
EFFECTS
EFFECT OF LOSS, DETERIORATION, OR IMPROVEMENT BEFORE
KINDS OF PERIOD/TERM: ARRIVAL OF PERIOD
1. According to effect: See ART 1189 [11]
a. SUSPENSIVE PERIOD (ex die)
- Obligation begins only upon the arrival of period [17] ART 1195.
(Art. 1193 [15] ) Anything paid or delivered before the arrival of the
b. RESOLUTORY PERIOD (in diem) period, the obligor being unaware of the period or believing
- Obligation is only valid and terminates upon the
that the obligation has become due and demandable, may be
arrival of the period.
recovered, with the fruits, and interests.
Examples:
1. I will pay you 30days from today.
2. I will support you until you die. PAYMENT BEFORE ARRIVAL OF PERIOD
Allows the recovery what has been paid by mistake before the
2. According to source: fulfillment of a suspensive condition.
a. LEGAL PERIOD
- When i​ t is provided for by laws DEBTOR PRESUMES AWARE OF PERIOD
b. CONVENTIONAL OR VOLUNTARY PERIOD The debtor knew that the debt was not yet due. He has the burden
- Agreed to by the parties. of proving that he was unaware of the period.
c. JURIDICAL PERIOD He can no longer recover the money once the money matured or
- Fixed by the court. once the period has arrived.

3. According to definiteness:
a. DEFINITE PERIOD
- It is fixed or it is known when it will come.
Example: Examples:
D owes C P10 000 that is due Dec 31, 2019. By mistake, D paid 1. D borrowed P10 000 from C, without interest.
his obligation last year (2018). 2. D promised to pay C “on or before” Dec 31.
Assuming that today is June 30, 2019, D can recover the P10 000
plus P600 (interest). However, he cannot recover, except interest, if the 2. Term is for the benefit of the CREDITOR
debt has already matured. - He mau demand fulfillment even before the arrival of the
He cannot recover the money if D had the knowledge of the period. term but the debtor cannot require him to accept payment.

NO RECOVERY IN PERSONAL OBLIGATIONS COMPUTATION OF PERIOD/TERM

Art 1195 is not applied in to do (physically impossible to recover the 1. LEGAL PERIODS
service rendered) or not to do (he cannot recover what he has not done). - Administrative Code of 1987
- Year (12 calendar months), Month (30 days), day (24
[18] ART 1196. hours), night (sunset to sunrise)
Whenever in an obligation a period is designated, it is 2. CALENDAR MONTH
presumed to have been established for the benefit of both the - Without regard to the number of days it may contain
creditor and the debtor, unless from the tenor of the same or - One calendar month (Dec 31): Jan 1 - Jan 31
other circumstances it should appear that the period has been
[19] ART 1197.
established in favor of one or of the other.
If the obligation does not fix a period, but from its nature
and the circumstances it can be inferred that a period was
PRESUMPTION AS TO BENEFIT OR PERIOD
Fixed by the parties; the period is presumed to have been intended, the courts may fix the duration thereof.
established for the benefit of both the creditor & debtor. The courts shall also fix the duration of the period when
Example: it depends upon the will of the debtor.
On Jan 1, D borrowed from C P10 000 payable on Dec 21 at 15% In every case, the courts shall determine such period as
interest. ​D cannot pay C w/o the consent of C. Neither can C compel D to may under the circumstances have been probably
pay. contemplated by the parties. Once fixed by the courts, the
D is benefited because he can use the money for 1 year. period cannot be changed by them.
C is benefited because of the interests the money would earn.
COURT GENERALLY WITHOUT POWER TO FIX PERIOD
EXCEPTIONS TO THE GENERAL RULE
1. Term is for the benefit of the DEBTOR ALONE JURIDICAL PERIOD
- He cannot be compelled to pay prematurely, but he can, if - refers to the period mentioned in ART 1197
he desires to do so. CONTRACTUAL PERIOD
- periods fixed by the parties in their contract
Example: (2) When he does not furnish to the creditor the guaranties
D obliges himself to pay C P10 000. ​Obligation does not fix a or securities which he has promised;
period, not even cout the court may fix a period. (3) When by his own acts he has impaired said guaranties or
securities after their establishment, and when through a
EXCEPTIONS TO THE GENERAL RULE
fortuitous event they disappear, unless he immediately
2 cases when the court is authorized to fix a period.
gives new ones equally satisfactory;
1. NO PERIOD IS FIXED BUT A PERIOD WAS INTENDED
- can be inferred from its nature and the circumstances that a (4) When the debtor violates any undertaking, in
period was intended. consideration of which the creditor agreed to the period;
Examples: (5) When the debtor attempts to abscond.
1. D agreed to construct the house of C. The parties failed to fix the
period within which the construction is to be made. ​The court can WHEN OBLIGATION CAN BE DEMANDED BEFORE LAPSE OF
fix the term. PERIOD
2. B bought lumber from the store of S on credit. The period for General Rule: ​the obligation is not demandable before the lapse of
payment in the invoice is left blank. ​It can be inferred that a period the period.
is intended.
EXCEPTIONS:
2. DURATION OF THE PERIOD DEPENDS UPON THE WILL OF 1. When debtor becomes insolvent
DEBTOR - D owes C P10 000 payable on Dec 30, but D becomes
- See Art. 1180 [2] insolvent on Sept 4.
2. When debtor does no furnish guarantees/securities promised
LEGAL EFFECT WHERE SUSPENSIVE PERIOD/CONDITION - D promised to mortgage his house to secure the debt, but
DEPENDS UPON THE WILL OF DEBTOR fails to furnish the said security.
1. Existence of the obligation is not affected but the period depends 3. When guarantied/securities given have been
upon the sole will of the debtor. impaired/disappeared
2. The obligation is subject to condition; conditional obligation is void. - The house was burned through D’s fault.
4. When debtor violates an undertaking
[20] ART 1198. - C agreed to the period given, but violates it.
The debtor shall lose every right to make use of the 5. When debtor attempts to abscond
period: - Before the due date, D changed his address w/o informing
(1) When after the obligation has been contracted, he C.
- Abscond: escape
becomes insolvent, unless he gives a guaranty or
security for the debt;
ALTERNATIVE OBLIGATIONS Example:
D borrowed P10 000 from C. It was agreed that D could pay it with
[21] ART 1199. P10 000, a tv set, or by painting C’s house.
ONLY ONE OF THIS SHOULD BE ACCEPTED.​ C cannot accept
A person alternatively bound by different prestations
P5 000 and half of the tv.
shall completely perform one of them.
The creditor cannot be compelled to receive part of one [22] ART 1200.
and part of the other undertaking. The right of choice belongs to the debtor, unless it has
been expressly granted to the creditor.
KINDS OF OBLIGATION ACCORDING TO OBJECT:
The debtor shall have no right to choose those
1. SIMPLE OBLIGATION
prestations which are impossible, unlawful or which could not
- only 1 prestation
Examples: have been the object of the obligation.
1. D obliged himself to deliver to C a piano
2. D promised to repair the car of C. RIGHT OF CHOICE, AS A RULE, GIVEN TO DEBTOR
General Rule: ​the right to choose the prestation belongs to debtor.
2. COMPOUND OBLIGATION
- 2 or more prestations EXCEPTION:
a. CONJUNCTIVE OBLIGATION Creditor can choose, IF it is expressly granted to him by a 3rd
- several prestations and ALL of them are due. person when the right is given to him by common agreement.
b. DISTRIBUTIVE OBLIGATION
- ONLY 2 or more prestations are due. Example:
i. ALTERNATIVE OBLIGATION S binds himself to deliver item 1 or item 2 to B on Dec 10 and to
- SEVERAL prestations are due, but the communicate B’s choice on/before Dec 5.
performance of ONE is sufficient. If S delays in making B’s choice, B cannot exercise the right
ii. FACULTATIVE OBLIGATION because ​it is not expressly granted to him.
- ONLY 1 prestation is due, but the debtor
MAY SUBSTITUTE another. RIGHT OF CHOICE OF DEBTOR NOT ABSOLUTE
1. The debtor cannot choose the prestations which are ​impossible
ALTERNATIVE OBLIGATION (soil from Jupiter)​, unlawful ​(a kilo of drugs)​, or which could not
- Various prestations are due but the performance of one of them is have been the object of the obligation ​(if the debt is worth P1
sufficient as determined by the choice which belongs to the debtor. 000, but the prestation is worth P10 000)​.
 2. The debtor has no more right of choice when among the WHEN DEBTOR MAY RESCIND CONTRACT
prestations whereby he is alternatively bound, ​only one is Debtor can make his choice without the consent of the creditor.
practicable.
Example:
[23] ART 1201. D borrowed P10 000 from C. To comply, D could deliver item 1,
The choice shall produce no effect except from the time item 2, or item 3. If through the fault of C - item 1 is destroyed…
it has been communicated. (1) D can rescind the contract. D needs to return P10 000 and C must
pay the value of item 1 + damages.
(2) D may choose between item 2 or item 3 and C must pay the value
COMMUNICATION OF NOTICE THAT CHOICE HAS BEEN MADE
of item 1 + damages.
1. EFFECT OF NOTICE
(3) D may choose item 1, he doesn’t need to pay P10 000 and C is not
- Obligation is alternative until the choice is made and
liable for item 1.
communicated.
a. Once the notice has been given, obligation becomes simple
b. Choices cannot be changed without the consent of the [26] ART 1204.
other party. The creditor shall have a right to indemnity for damages
2. PROOF AND FORM OF NOTICE when, through the fault of the debtor, all the things which are
- Burden of communicating the choice is upon who made that alternatively the object of the obligation have been lost, or the
choice. compliance of the obligation has become impossible.
- Orally or writing, expressly or impliedly. The indemnity shall be fixed taking as a basis the value
of the last thing which disappeared, or that of the service which
[24] ART 1202. last became impossible.
The debtor shall lose the right of choice when among the Damages other than the value of the last thing or service
prestations whereby he is alternatively bound, only one is may also be awarded.
practicable.
EFFECT OF LOSS OF OBJECTS OF OBLIGATION
EFFECT WHEN ONLY ONE PRESTATION IS PRACTICABLE ​ rt. 1203 & 1204
Right of choice belongs to debtor: A
If one is practicable, ART 1200 [22] will apply. ​ rt. 1205
Right of choice belongs to creditor: A
Already considered a Simple Obligation. 1. SOME of the objects
- Through the fault of debtor
[25] ART 1203. - Debtor is not liable since HE HAS THE RIGHT OF CHOICE
If through the creditor's acts the debtor cannot make a and the obligation can still be performed.
choice according to the terms of the obligation, the latter may
rescind the contract with damages.
 2. ALL of the objects WHEN THE RIGHT OF CHOICE BELONGS TO CREDITOR
- Creditor shall have the right to indemnity for damages since - All the rights of the debtor are given to the creditor
the obligation can no longer be complied with.
- If through fortuitous event, obligation is extinguished. RULES IN CASE OF LOSS BEFORE CREDITOR HAS MADE CHOICE:
1. When a thing is lost through a fortuitous event
BASIS OF INDEMNITY - Creditor can choose between other items.
The basis of indemnity is the last one that is lost. 2. When a thing is lost through debtor’s fault
- Creditor can choose between other items with a right to
[27] ART 1205. damages.
When the choice has been expressly given to the 3. When all things are lost through debtor’s fault
creditor, the obligation shall cease to be alternative from the - B can demand the payment of the price of any one of the
items with a right to indemnity for damages.
day when the selection has been communicated to the debtor.
4. When the things are lost through a fortuitous event
- Obligation is extinguished.
Until then the responsibility of the debtor shall be
governed by the following rules: RULES ABOVE ARE ALSO APPLICABLE TO PERSONAL
(1) If one of the things is lost through a fortuitous event, he OBLIGATIONS
shall perform the obligation by delivering that which the
creditor should choose from among the remainder, or [28] ART 1206.
that which remains if only one subsists; When only one prestation has been agreed upon, but the
(2) If the loss of one of the things occurs through the fault of obligor may render another in substitution, the obligation is
the debtor, the creditor may claim any of those called facultative.
subsisting, or the price of that which, through the fault of The loss or deterioration of the thing intended as a
the former, has disappeared, with a right to damages; substitute, through the negligence of the obligor, does not
(3) If all the things are lost through the fault of the debtor, render him liable. But once the substitution has been made, the
the choice by the creditor shall fall upon the price of any obligor is liable for the loss of the substitute on account of his
one of them, also with indemnity for damages. delay, negligence or fraud. (n)

The same rules shall be applied to obligations to do or FACULTATIVE OBLIGATION

not to do in case one, some or all of the prestations should - Only one prestation has been agreed upon but the obligor may
become impossible. render another in substitution.
EFFECT OF LOSS
1. Before Substitution
- Fortuitous event - extinguished
- Otherwise, the debtor is liable for the damages

2. After Substitution
- Principal thing: debtor is not liable whatever may be the
cause of loss, because it is no longer due.
- Substitute: the liability of the debtor depends upon whether
or not the loss is due to his fault.

ALTERNATIVE FACULTATIVE

Number of Several prestations 1 prestation is due

prestations are due but although the debtor is
compliance w/ one is allowed to substitute
sufficient. it.

Right of Choice Right of choice may Given only to the

be given to creditor or debtor.
third person.

Loss through a Does not extinguish Extinguishes the

fortuitous event the obligation obligation

Loss through fault of Does not render Debtor is liable

debtor debtor liable.

Loss through fault of gives rise to liability. Does not render him
debtor ​(choice liable.
belongs to creditor)