CHAPTER 3: DIFFERENT KINDS OF OBLIGATIONS WHEN OBLIGATION DEMANDABLE AT ONCE

SECTION 1 – PURE AND CONDITIONAL OBLIGATIONS 1. when it is pure

2. when it is subject to a resolutory condition
1179 - Every obligation whose performance does 3. when it is subject to a resolutory period
not depend upon a future or uncertain event, or
upon a past event unknown to the parties, is
WHERE DURATION OF PERIOD DEPENDS UPON THE
demandable at once.
WILL OF DEBTOR
Every obligation which contains a resolutory
condition shall also be demandable, without PERIOD is a future and certain event upon the arrival of
prejudice to the effects of the happening of the which the obligation subject to it either arises or is
extinguished.
event.
1. The debtor promises to pay when his means
PURE OBLIGATION is one which is not subject to any permit him to do so
condition and no specific date is mentioned for its 2. Other cases
fulfilment and is, therefore, immediately demandable. a. “little by little”
b. “as soon as possible”
CONDITIONAL OBLIGATION is one whose consequences
c. “from time to time”
are subject in one way or another to the fulfillment of a
d. “as soon as I have the money”
condition.
e. “at any time I have the money”
CONDITION is a future and uncertain event, upon the f. “in partial payments”
happening of which, the effectivity or extinguishment of g. “when I am in a position to pay”
an obligation (or rights) subject to it depends.
(resolutory condition)
CHARACTERISTICS OF A CONDITION (suspensive condition)
1. Future and uncertain
2. Past but unknown 1181 - In conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those
TWO PRINCIPAL KINDS OF CONDITION already acquired, shall depend upon the happening of
the event which constitutes the condition.
1. Suspensive condition (condition precedent or
condition antecedent) or one the fulfillment of
which will give rise to an obligation (or right). In
other words, the demandability of the obligation is
suspended until the happening of a future and
uncertain event which constitutes the condition.
2. Resolutory condition (condition subsequent) or EFFECT OF HAPPENING OF CONDITION
one the fulfillment of which will extinguish an 1. Acquisition of rights
obligation (or right) already existing
In obligations subject to a suspensive condition,
the acquisition of rights by the creditor depends
SUSPENSIVE RESOLUTORY
upon the happening of the event which
CONDITION CONDITION
constitutes the condition.
Suspensive condition is Resolutory condition that 2. Loss of rights already acquired
fulfilled, the obligation is fulfilled, the obligation In obligations subject to a resolutory condition,
arises is extinguished
the happening of the event which constitutes the
If the first does not take condition produces the extinguishment or loss of
place, the tie of the law The tie of the law is
rights already acquired.
(juridical/legal tie) does consolidated
not appear
Until the first takes place, Its effects flow, but over
the existence of the obli it hovers the possibility
is mere hope of termination
 1182 - When the fulfillment of the condition
depends upon the sole will of the debtor, the
conditional obligation shall be void. If it depends
upon chance or upon the will of a third person, the
obligation shall take effect in conformity with the
provisions of this Code.
CLASSIFICATIONS OF CONDITIONS
As to effect
a. Suspensive. — the happening of which gives
rise to the obligation
b. Resolutory. — the happening of which
extinguishes the obligation
Form
a. Express. — the condition is clearly stated
b. Implied. — the condition is merely inferred
Possibility
a. Possible. — the condition is capable of
fulfillment, legally and physically
b. Impossible. — the condition is not capable of
fulfillment, legally or physically
Cause or origin
a. Potestative. — the condition depends upon
the will of one of the contracting parties
b. Casual. — the condition depends upon
chance or upon the will of a third person
c. Mixed. — the condition depends partly upon
chance and partly upon the will of a third
person
Mode
a. Positive. — the condition consists in the
performance of an act
b. Negative. — the condition consists in the
omission of an act
Number
a. Conjunctive. — there are several conditions
and all must be fulfilled
b. Disjunctive. — there are several conditions
and only one or some of them must be
fulfilled
Divisibility
a. Divisible. — the condition is susceptible of
partial performance
b. Indivisible. — the condition is not
susceptible of partial performance
POTESTATIVE CONDITION is a condition suspensive
in nature and which depends upon the sole will of
one of the contracting parties.
WHERE SUSPENSIVE CONDITION DEPENDS UPON
THE WILL OF DEBTOR
1. Conditional obligation void - depends solely
upon the will of the debtor, the conditional
obligation shall be void because its validity
and compliance is left to the will of the
debtor and it cannot, therefore, be legally
demanded.
2. Only the condition void - If the obligation is
a pre-existing one, and, therefore, does not
depend for its existence upon the fulfillment
by the debtor of the potestative condition,
only the condition is void leaving unaffected
the obligation itself. Here, the condition is
imposed not on the birth of the obligation
but on its fulfillment.
If the condition depends exclusively upon the will of
the creditor, the obligation is valid.
WHERE RESOLUTORY CONDITION DEPENDS UPON
THE WILL OF DEBTOR
If the condition is resolutory in nature, like the right
to repurchase in a sale with pacto de retro, the
obligation is valid although its fulfillment depends
upon the sole will of the debtor.
CASUAL CONDITION - If the suspensive condition
depends upon chance or upon the will of a third
person, the obligation subject to it is valid.
MIXED CONDITION - The obligation is valid if the
suspensive condition depends partly upon chance
and partly upon the will of a third person.
 1183 - Impossible conditions, those contrary to
good customs or public policy and those prohibited
by law shall annul the obligation which depends
upon them. If the obligation is divisible, that part
thereof which is not affected by the impossible or
unlawful condition shall be valid.
The condition not to do an impossible thing shall be
considered as not having been agreed upon.
(suspensive condition)
TWO KINDS OF IMPOSSIBLE CONDITIONS
1. PHYSICALLY impossible conditions. — when they, in
the nature of things, cannot exist or cannot be done
2. LEGALLY impossible conditions. — when they are
contrary to law, morals, good customs, public order,
or public policy
EFFECT OF IMPOSSIBLE CONDITIONS
1. Conditional obligation void - Both the obligation and
the condition are void. The reason behind the law is
that the obligor knows his obligation cannot be
fulfilled. He has no intention to comply with his
obligation.
2. Conditional obligation valid. — If the condition is
negative, that is, not to do an impossible thing, it is
disregarded and the obligation is rendered pure and
valid.
3. Only the affected obligation void. — If the obligation
is divisible, the part thereof not affected by the
impossible condition shall be valid.
1184 - The condition that some event happen at a
determinate time shall extinguish the obligation as
soon as the time expires or if it has become
indubitable that the event will not take place.
POSITIVE CONDITION - happening of an event at a
determinate time. The obligation is extinguished:
1. as soon as the time expires without the event taking
place
2. as soon as it has become indubitable that the event
will not take place although the time specified has
not yet expired.
1185. The condition that some event will not happen at
a determinate time shall render the obligation effective
from the moment the time indicated has elapsed, or if it
has become evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed
fulfilled at such time as may have probably been
contemplated, bearing in mind the nature of the
obligation.
NEGATIVE CONDITION - event will not happen at a
determinate time. The obligation shall become effective
and binding:
1. from the moment the time indicated has elapsed
without the event taking place
2. from the moment it has become evident that the
event cannot occur, although the time indicated
has not yet elapsed.
If no time is fixed, the circumstances shall be considered
to determine the intention of the parties. This rule may
also be applied to a positive condition.
1186. The condition shall be deemed fulfilled when
the obligor voluntarily prevents its fulfillment.
CONSTRUCTIVE FUFILLMENT OF
SUSPENSIVE CONDITION
REQUISITES:
1. The condition is suspensive
2. The obligor actually prevents the fulfillment of
the condition
3. He acts voluntarily.
The law does not require that the obligor acts with malice
or fraud as long as his purpose is to prevent the
fulfillment of the condition. He should not be allowed to
profit from his own fault or bad faith to the prejudice of
the obligee.
CONSTRUCTIVE FUFILLMENT OF
RESOLUTORY CONDITION
- obligation subject to a resolutory condition with
respect to the debtor who is bound to return what
he has received upon the fulfillment of the condition.
1187. The effects of a conditional obligation to give,
once the condition has been fulfilled, shall retroact
to the day of the constitution of the obligation.
Nevertheless, when the obligation imposes
reciprocal prestations upon the parties, the fruits
and interests during the pendency of the condition
shall be deemed to have been mutually
compensated. If the obligation is unilateral, the
debtor shall appropriate the fruits and interests
received, unless from the nature and circumstances
of the obligation it should be inferred that the
intention of the person constituting the same was
different.
In obligations to do and not to do, the courts shall
determine, in each case, the retroactive effect of the
condition that has been complied with.
RETROACTIVE EFFECTS OF FUFILLMENT OF
SUSPENSIVE CONDITION
1188. The creditor may, before the fulfillment of
the condition, bring the appropriate actions for the
preservation of his right.
The debtor may recover what during the same time
he has paid by mistake in case of a suspensive
condition.
RIGHTS PENDING FUFILLMENT OF
SUSPENSIVE CONDITION
1. Rights of creditor. — He may take or bring
appropriate actions for the preservation of his right,
as the debtor may render nugatory the obligation
upon the happening of the condition.
2. Rights of debtor. — He is entitled to recover what
he has paid by mistake prior to the happening of the
suspensive condition.
This is a case of solutio indebiti which is based on
the principle that no one shall enrich himself at the
expense of another.

1. In obligations to give - An obligation to give subject
to a suspensive condition becomes demandable only
upon the fulfillment of the condition. However, once
the condition is fulfilled, its effects shall retroact to
the day when the obligation was constituted.
2. In obligations to do or not to do - The courts are
empowered by the use of sound discretion and
bearing in mind the intent of the parties, to
determine, in each case, the retroactive effect of the
suspensive condition that has been complied with.
(par. 2.)
Note that the payment before the fulfillment of the
condition must be “by mistake;” otherwise, the debtor is
deemed to have impliedly waived the condition. In any
case, he cannot recover what he has prematurely paid
once the suspensive condition is fulfilled. But if the
condition was not fulfilled, the debtor should be allowed
to recover any payment made even if the debtor has paid
not by mistake.

RETROACTIVE EFFECTS AS TO FRUITS AND INTERESTS

IN OBLIGATIONS TO GIVE
1. In reciprocal obligations. — There is no retroactivity
because the fruits and interests received during the
pendency of the condition are deemed to have been
mutually compensated.
2. In unilateral obligations. — There is usually no
retroactive effect because they are gratuitous. The
debtor receives nothing from the creditor. Thus,
fruits and interests belong to the debtor unless from
the nature and other circumstances it should be
inferred that the intention of the person constituting
the same was different.
1189. When the conditions have been imposed with
the intention of suspending the efficacy of an
obligation to give, the following rules shall be
observed in case of the improvement, loss or
deterioration of the thing during the pendency of
the condition:
1) If the thing is LOST without the fault of the
debtor, the obligation shall be extinguished
2) If the thing is LOST through the fault of the
debtor, he shall be obliged to pay damages; it is
understood that the thing is lost when it
perishes, or goes out of commerce, or
disappears in such a way that its existence is
unknown or it cannot be recovered
3) When the thing DETERIORATES without the
fault of the debtor, the impairment is to be
borne by the creditor
4) If it DETERIORATES through the fault of the
debtor, the creditor may choose between the
rescission of the obligation and its fulfillment,
with indemnity for damages in either case
5) If the thing is IMPROVED by its nature, or by
time, the improvement shall inure to the benefit
of the creditor
6) If it is IMPROVED at the expense of the debtor,
he shall have no other right than that granted to
the usufructuary.
REQUISITES:
1. The obligation is a real obligation
2. The object is a specific or determinate thing
3. The obligation is subject to a suspensive
condition
4. The condition is fulfilled
5. There is loss, deterioration, or improvement of
the thing during the pendency of the happening
on one condition
KINDS OF LOSS
1. Physical loss. — when a thing perishes as when a
house is burned and reduced to ashes
2. Legal loss. — when a thing goes out of commerce
(e.g., when it is expropriated) or when a thing
heretofore legal becomes illegal
3. Civil loss. — when a thing disappears in such a way
that its existence is unknown (e.g., missing); or even
if known, it cannot be recovered, whether as a
matter of fact (e.g., lost ring in ocean).
USUFRUCT gives a right to enjoy the property of another
with the obligation of preserving its form and substance,
unless the title constituting it or the law otherwise
provides.
1190. When the conditions have for their purpose
the extinguishment of an obligation to give, the
parties upon the fulfillment of said conditions, shall
return to each other what they have received.
In case of the loss, deterioration or improvement of
the thing, the provisions which, with respect to the
debtor, are laid down in the preceding article shall
be applied to the party who is bound to return.
As for obligations to do and not to do, the provisions
of the second paragraph of Article 1187 shall be
observed as regards the effect of the
extinguishment of the obligation.
EFFECTS OF FULFILLMENT OF RESOLUTORY CONDITION
1. In obligations to give. — When the resolutory
condition in an obligation to give is fulfilled, the
obligation is extinguished (Art. 1181.) and the parties
are obliged to return to each other what they have
received under the obligation. (par. 2.)
a. There is a return to the status quo. In other
words, the effect of the fulfillment of the
condition is retroactive.
b. In case the thing to be returned “is legally in the
possession of a third person who did not act in
bad faith, the remedy of the party entitled to
restitution is against the other.
c. The obligation of mutual restitution is absolute.
It applies not only to the things received but also
to the fruits and interests.
d. In obligations to give subject to a suspensive
condition, the retroactivity admits of exceptions
according to whether the obligation is bilateral
or unilateral. Here, there are no exceptions,
whether the obligation is bilateral or unilateral.
The only possible exception between the suspensive and
resolutory condition is when the intention of the parties
is otherwise.
2. In obligations to do or not to do. — In some
obligations, the courts shall determine the
retroactive effect of the fulfillment of the resolutory
condition (par. 2.)
1191. The power to rescind obligations is implied in
reciprocal ones, in case one of the obligors should
not comply with what is incumbent upon him.
The injured party may choose between the
fulfillment and the rescission of the obligation, with
the payment of damages 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.
This is understood to be without prejudice to the
rights of third persons who have acquired the thing,
in accordance with Articles 1385 and 1388 and the
Mortgage Law.
KINDS OF OBLIGATION ACCORDING TO THE
PERSON OBLIGED
1. Unilateral. — when only one party is obliged to
comply with a prestation.
2. Bilateral. — when both parties are mutually
bound to each other. In other words, both
parties are debtors and creditors of each other.
a. Reciprocal obligations are those which arise
from the same cause and in which each
party is a debtor and creditor of the other,
such that the performance of one is
designed to be the equivalent and the
condition for the performance of the other.
b. Non-reciprocal obligations are those which
do not impose simultaneous and correlative
performance on both parties.
REMEDIES IN RECIPROCAL OBLIGATIONS
1. Choice of remedies – In case one of the obligors
does not comply with what is incumbent upon
him, the aggrieved party may choose between:
a. Action for specific performance
(fulfillment) of the obligation with
damages.
b. Action for rescission of the obligation also
with damages
2. Remedy for non-compliance – the principal
action for rescission for non-performance under
art. 1191 must be distinguished from the
subsidiary action for rescission by reason of
lesion or damage.
The remedies of the injured or aggrieved party are
alternative and not cumulative, that is, he is
privileged to choose only one of the remedies, and
not both, subject only to the exception in paragraph
2.
Limitations on right to demand rescission
Rescission without previous judicial decree pg. 115
1192. In case both parties have committed a
breach of the obligation, the liability of the first
infractor shall be equitably tempered by the courts.
If it cannot be determined which of the parties first
violated the contract, the same shall be deemed
extinguished, and each shall bear his own damages.
WHERE BOTH PARTIES GUILTY OF BREACH
1. First infractor known. — One party violated his
obligation; subsequently, the other also violated his
part of the obligation. In this case, the liability of the
first infractor should be equitably reduced.
2. First infractor cannot be determined. — One party
violated his obligation followed by the other, but it
cannot be determined which of them was the first
infractor. The rule is that the contract shall be
deemed extinguished and each shall bear his own
damages.
 SECTION 2 – OBLIGATIONS WITH A PERIOD is not fixed but a period is intended, the courts
are usually empowered by law to fix the same.
1193. Obligations for whose fulfillment a day
certain has been fixed, shall be demandable only PERIOD CONDITION
when that day comes. As to fulfillment
Obligations with a resolutory period take effect at - future and certain event - future and
once, but terminate upon arrival of the day certain. uncertain event
A day certain is understood to be that which must Time
necessarily come, although it may not be known - refers to future - refers to future
when. and past event
If the uncertainty consists in whether the day will Influence on the obli
come or not, the obligation is conditional, and it - fixes the time for the - causes an
shall be regulated by the rules of the preceding efficaciousness of the obli obligation to either
Section. and does not invalidate arise or to cease
the fact that it existed
PERIOD is a future and certain event upon the arrival Effect, when left to
of which the obligation (or right) subject to it either debtor’s will
arises or is terminated. It is a day certain which must - empowers the court to - invalidates the
necessarily come (like the year 2005; next fix the duration obligation
Christmas), although it may not be known when, like Retroactivity of effects
the death of a person. - unless there is an - happening of a
agreement to the condition has
KINDS OF PERIOD OR TERM contrary, the arrival of a retroactive effect
According to effect period does not have any
1. SUSPENSIVE PERIOD (EX DIE). — The obligation retroactive effect
begins only from a day certain upon the arrival
of the period (Art. 1193, par. 1.) 1194. In case of loss, deterioration or improvement
2. RESOLUTORY PERIOD (IN DIEM). — The of the thing before the arrival of the day certain,
obligation is valid up to a day certain and the rules in Article 1189 shall be observed.
terminates upon the arrival of the period. (par. 2
Source 1195. Anything paid or delivered before the arrival
1. LEGAL PERIOD. — When it is provided for by law of the period, the obligor being unaware of the
2. Conventional or voluntary period. — When it is period or believing that the obligation has become
agreed to by the parties (Art. 1196.) due and demandable, may be recovered, with the
3. JUDICIAL PERIOD. — When it is fixed by the fruits and interests.
court. (Art. 1197.)
No recovery in personal obligations. Article 1195
Definiteness
has no application to obligations to do or not to do
1. Definite period. — When it is fixed or it is known because as to the former, it is physically impossible
when it will come (Art. 1193, par. 3.) to recover the service rendered, and as to the latter,
2. Indefinite period. — When it is not fixed or it is as the obligor performs by not doing, he cannot, of
not known when it will come. Where the period course, recover what he has not done.
1196. Whenever in an obligation a period is
designated, it is presumed to have been established
for the benefit of both the creditor and the debtor,
unless from the tenor of the same or other
circumstances it should appear that the period has
been established in favor of one or of the other.
In an obligation subject to a period fixed by the parties,
the period is presumed to have been established for the
benefit of both the creditor and the debtor. This means
that before the expiration of the period, the debtor may
not fulfill the obligation and neither may the creditor
demand its fulfillment without the consent of the other
especially if the latter would be prejudiced or
inconvenienced thereby. The presumption, of course, is
rebuttable.
EXCEPTIONS TO THE GENERAL RULE
1. Term is for the benefit of the debtor alone. —
He cannot be compelled to pay prematurely, but
he can, if he desires, do so.
2. Term is for the benefit of the creditor. — He
may demand fulfillment even before the arrival
of the term but the debtor cannot require him to
accept payment before the expiration of the
stipulated period.
1197. If the obligation does not fi x a period, but
from its nature and the circumstances it can be
inferred that a period was intended, the courts may
fi x the duration thereof.
The courts shall also fix the duration of the period
when it depends upon the will of the debtor.
In every case, the courts shall determine such period
as may under the circumstances have been probably
contemplated by the parties. Once fixed by the
courts, the period cannot be changed by them.
The period mentioned in the above provision refers
to a judicial period as distinguished from the period
fixed by the parties in their contract which is known
as contractual period.
If the obligation does not state a period and no
period is intended, the court is not authorized to fix
a period. The courts have no right to make contracts
for the parties.
EXCEPTIONS TO THE GENERAL RULE
Cases when the court is authorized to fix the
duration of the period:
1. No period is fixed but a period was intended
2. Duration of period depends upon the will of the
debtor (see Art. 1180)
LEGAL EFFECT WHERE SUSPENSIVE PERIOD/
CONDITION DEPENDS UPON WILL OF DEBTOR
1. The existence of the obligation is not affected
although the period depends upon the sole will
of the debtor. It is only the performance with
respect to time that is left to the will of the
debtor.
2. If the obligation is subject to a condition which
depends upon the will of the debtor, the
conditional obligation is void (Art. 1182.)
because in such case, it is actually the fulfillment
of the obligation that depends upon the will of
the debtor.
1198. The debtor shall lose every right to make use
of the period:
1) When after the obligation has been contracted,
he becomes insolvent, unless he gives a
guaranty or security for the debt
2) When he does not furnish to the creditor the
guaranties or securities which he has promised
3) When by his own acts he has impaired said
guaranties or securities after their
establishment, and when through a fortuitous
event they disappear, unless he immediately
gives new ones equally satisfactory
4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to
the period
5) When the debtor attempts to abscond.