The Law on

Obligations
and Contracts
2011

Midterm
Examination

Submitted by: Domingo,

Dennimar O.
TTh 17:00 -
18:30

Submitted to: Pio Sara

Jagurin
II. Discussions
1. Illustrate an obligation subject to:

(a) Suspensive Condition

When an obligation is subject to a suspensive condition, the

creation of the obligation will depend on the occurrence of an event or on the
certainty that the event will not occur; thus, the condition delays the creation
of a relationship between the parties. As long as the condition has not
occurred, the very existence of the obligation is not yet arises. For example, If
your rent is due on the 30th, you have an obligation to pay the rent. The
performance to pay occurs on the 30th. The performance is suspended until
the 30th.

(b) Resolutory Condition

Resolutory condition refers to a condition whereby, upon

fulfillment terminates an already enforceable obligation. The continuance of
such a contract is made dependent upon the happening of an uncertain future
event. However, there is no postponement or suspension of the contract and
all rights and obligations come into existence immediately upon conclusion of
an agreement between the parties. For instance, You have a car note over the
next 10 years. Once you pay the last payment at the end of 10 years, the
obligation ends.

What is the effect of the fulfillment of the condition in a conditional obligation?

The suspensive condition is when the parties agree that the duty
to perform is postponed until a determined or determinable date due to the
pending event, and that this event is certain to happen. However, the exact
date is unknown. The obligation will arises when the said condition is already
fulfilled. While in the resolutory condition, when the parties agree that the
obligations in the contract will be terminated upon a certain future time. This
exact time is certain to happen, but the exact date is unkown.
2. Give two (2) cases when the conditional obligation is valid although the
condition depends entirely upon the will of the debtor. Explain.

First case is when the debtor promises to pay when his means
permit him to do so. In this case, what depends upon the will of the debtor is
the duration of the period when he is capable on paying his debt and not
whether he should comply or not. For example, Mr. G binds himself to pay Ms.
Y of his debt that costs 10,000 little by little. This obligation is valid and it
shall be deemed to be one with a period of time.

Next case is when the debtor is capable of doing the said

obligation. For example, Marie borrowed 5,000 to Rose payable on September
13. Due to the review of financial reverses, Marie now is not capable on
paying the debt to Rose but Marie is willing to pay the said debt. The
remedies of Rose will arise

3. May an obligor be liable under an obligation subject to a suspensive condition

although the condition has not yet been fulfilled? Explain.

Under the suspensive condition, the obligation will arises when

the said condition is already fulfilled. Therefore, under this type of condition,
the obligor or the debtor is not yet liable. The debtor would be liable if the
condition is already fulfilled.

4. In obligation to give a parcel of land subject to a suspensive condition, who is

entitled to the fruits that accrued during the pendency of the condition once said
condition is fulfilled?

Upon the fulfillment of the obligation, the seller has the right to
keep to himself all the fruits and interests he may have received during the
pendency of the condition, unless a contrary intention by the seller that he
shall render an accounting of fruits received during its pendency.
5. State the rules in case the thing to be delivered:

(a) is lost with the debtors fault; without his fault;

If the delivery lost is due to the debtors fault, the debtor has an
obligation to pay the damages that incurred and the price of the thing that is
lost also can be demand.

If the delivery lost without the fault of the debtor, the debtor is
not liable for any obligation or the obligation shall be extinguished. We are not
liable for the fortuitous event or any event that beyond our powers.

(b) Deteriorates with the debtors fault; without his fault

If it deteriorates through the fault of the debtor, the creditor

may choose between the 2 remedies as a creditor, which is the rescission or
the fulfillment of the obligation, with damages that incurred in either case. As
a creditor, you only have to choose one of the remedies that are given.

If it deteriorates without the fault of the debtor, the value of

thing that delivered will be depreciated and the value will be reduced due to
the deterioration of the thing.
III. Problems
Explain or state briefly the rule or reason for your answer.

1. D (debtor) borrowed 20,000 from C (creditor) payable on or before August

30. Before the arrival of the due date, C agreed to the promise of B to pay C
if B wants. Can C insist that B pay not later than August 30?

On this situation, the conditional obligation whose fulfillment

depends partly on the will of the debtor and partly upon the will of the third
person is perfectly valid. In this case, it shows that the creditor demands the
third person to pay him not later than August 30 but on the said case, they
agreed on the promise of the third person to pay the creditor if the third
person wants. Therefore, the creditor cannot demand to the debtor if the due
date is not yet passed.

2. Suppose in the same problem, D obliges himself to pay C 10,000 after C

has paid his obligation to T. Is the obligation valid?

The said condition is considered as the suspensive condition

wherein the obligation will only arises if the condition is already fulfilled. The
debtor obliges himself to pay the creditor if the creditor already paid the third
party. If the creditor has not yet fulfilled his obligation to the third party, he
cannot demand the debtor to pay him immediately. Therefore, the obligation
of the debtor is invalid. The debtor is not liable to pay the creditor if the
creditor is not yet paid to the third party.

3. S (Seller) agreed to sell to B (buyer) a specific car for 200,000, delivery of

the car and the payment of the price to be made on June 15. Suppose S
delivered the car on June 15 but B failed to pay the price, what are the
remedies of S?

If the buyer does not comply with his obligation to pay, the
seller may choose between the two remedies: (a) action for specific
performance (fulfillment) of the obligation with the damages; or (b) action for
the rescission of the obligation also with damages. The seller has the privilege
to choose only one of the remedies, and not both. If the creditor chosen
rescission, he cannot demand the fulfillment of obligation to the buyer. Same
as, if he chosen the buyer to fulfill the obligation, he cannot practice the
rescission later on.
4. S sold a parcel of the land to B for 240,000 payable in installment of 20,000
a year. The land was delivered to B who obtained ownership thereof. After
B had paid 200,000, he could no longer continuing paying in view of
financial reverses but he was willing to pay the balance of 40,000 if given
more time. Thereupon, S sued for rescission under Article 1191. If you were
the judge, would you grant rescission?

If I were the judge, I would grant the rescission of Seller in

default a term or period for the performance of the Buyer. The buyer is willing
to comply with his obligation to pay the maintaining balance that cost 40,000
but needs time to do so due to the view of his financial reverses, not because
he doesnt want to pay the maintaining balance that hed left.

5. D (debtor) binds himself to pay C (creditor) a sum of money. Give the

three (3) cases when the obligation of D is demandable at once by C?

When the obligation is pure

An obligation is demandable at once if it is pure obligation which
one is not suspended by any condition, whether it has been contracted
without any condition, or when thus contracted, the condition has been
performed. It is immediately demandable. Their agreement doesnt
have specific date, and conditions so the creditor can demand to pay
the said amount to the debtor.

When the obligation is subject to a resolutory condition

On the above description of resolutory obligation, once the
condition is already fulfilled, the obligation will be extinguish. The
creditor can demand to the debtor during the fulfilling of the condition.

When the obligation is subject to a resolutory period

Same as the case above, the creditor can demand to the buyer
while in the process of fulfilling the condition. If the creditor and the
debtor agree on the period wherein the obligation is extinguished, he
can demand to the buyer to pay the amount he borrowed.