Store ELAW ON TH OBLIGAT IONS | CONTRACTSSECTION 2. — Obligations with a Period ART. 1193. Obligations for whose fulfill- ment a day certain has been fixed, shall be de- mandable only when that day comes. Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain. A day certain is understood to be that which must necessarily come, although it may not be known when, If the uncertainty consists in whether the day will come or not, the obligation is condi- tional, and it shall be regulated by the rules of the preceding section. (1125a) Meaning of obligation with a period. An obligation with a period is one whose effects or consequences are subjected in one way or another to the expiration or arrival of said period or term. Meaning of period or term. ‘A period is a future and certain event upon the arrival of which the obligation (or right) subject to it either arises or is terminated. It is a day certain which must necessarily come (like the year 2010; next Christmas), although it may not be known when, like the death of a person. (Art. 1193, par. 3.)——_——Slt _teCOY JONS AND Art. 1193 oN OBLIGATH 122 THE LAW OS TRACTS jetinguished. Period and condition distinguish cs are as follows: he Cee ‘Aperiodisa certainevent which (1) Asto fulfillment. ter ata date known beforehand, or inust happen sooner or Ja a : and, 0 reas na ich cannot be determined, while a condition ig an uncertain event; (2) As to time. — A period refers only to the future, while a condition may refer also to a past event unknown to the parties; (3) As to influence on the obligation. — A period merely fixes the time for the efficaciousness of the obligation. If suspensive, it cannot prevent the birth of the obligation in due time; if resolutory, it does not invalidate the fact that the obligation existed. On the other hand, a condition causes an obligation either to arise or to cease; (4) As to effect, when left to debtor’s will. — A period which depends upon the will of the debtor empowers the court to fix the duration thereof (Art. 1197, par. 2.), while a condition which depends upon the sole will of the debtor invalidates the obligation (Art. 1182.); and (5) As to retroactivity of effects. — Unless there is an sereemert to the contrary, the arrival of a period does not have any retroactive effect, while th i condition has retroactive effect. Ti eeepening of Like a condition (see Art, 1183), possible. If the period is impossible (eg., February 30 because it will never come; constru ti as, shi; 24 hours because itis too short), the soles ce ant a period must be Kinds of period or term. (1) According to effect: (a) Suspensive peri - Period (ex di H begins only from a day die). — The obligation period (Art. 1193, par 1 a upon the arrival ofArt, 1193 DIFFERENT KINDS Op OBLIGATIONS 123 Obligations with a Period kb) Resolutory period (in diem). — The obligation is valid up to a day certain and terminates upon arrival of the period. (par. 2; 8 Manresa 160-162.) EXAMPLES; Ex die: () “Iwill pay you30 days from today” (or on Jan. 1, next year, or at the end of this month). (2) “1 will support you from the time your father (3) “Iwill pay you when my means permit me to do $0." This is considered by law as an obligation with « Period. (Art. 1180.) In diem: Q) “Twill give you P500 a month until the end of the year.” (2) “will support you until you die,” (2) According to source: (a) Legal period. — When. — When itis provided for by laws; (b) Conventional or voluntary period. ~ When it is agreed to by the parties (Art, 1196,); and (c). Judicial period. — When it is fixed by the court. (Art. 1197.) (3) According to definiteness: (a) Definite period. — When it is fixed or it is known when it will come (Art. 1193, par. 3.); and ) Indefinite period. — When itis not fixed or itis not ‘ean mee it will come. Where the period is not fixed but a period is intended, the courts are usually empowered by law to fix the same. (see Art. 1197.)|GATIONS AND Arts. 1194, 124 THELAW = ce ar sc deterioration or . Incase of loss, ti seal ont of the thing before me anal of ae cay cortaln the rules in article shall the day A be observed. (n) Effect of loss, deterioration, or improvement before arrival of period. See comments under Article 1189. ART. 1195. Anything paid or delivered before the. arrival of the period, the obligor being unaware of the period or believing that the obligation has become due and demandable, may be recovered, with the fruits, and interests. (1126a) Payment before arrival of period. Article 1195 applies only to obligation to give. Itis sim- ilar to Article 1188, paragraph 2, which allows the recovery of what has been paid by mistake before the fulfillment ofa suspensive condition, ____The creditor cannot unjustly enrich himself by retain- ae ths thing or money received before the arrival of the Debtor presumed aware of period. The presumption, h, that the debt was not yot ae nee it he wa: s the period depen upon Petio. Where the duration of 1197, Par. 3), payment by hel Of the debtor (see At determination of the arrival Of themounts, in effect, to his The obligo; © period, {Bor May ni once the period has aver foover the thing or money © can recover the fruits * =~ at ath Bes a AArt. 1196 DIFFERENT KINDS OF OBLIGATIONS 125 Obligations with a Period interests thereof from the date of premature performance to the date of maturity of the obligation. EXAMPLE: D owes C P10,000 which was supposed to be paid on December 31 this year. By mistake, B paid his obligation on December 31 last year. Assuming that today is June 30, D can recover the 10,000 plus P600 which is the interest for one half year at the legal rate of 12% or a total of P10,600. But D cannot recover, except the interest, if the debt had already matured. Neither can there be a right to recovery if D had knowledge of the period. The theory under solutio indebiti obviously will not apply. (Art. 2154.) D is deemed to have impliedly renounced the period. No recovery in personal obligations. Article 1195 has no application to obligations to do or not to do because as to the former, it is physically impossible to recover the service rendered, and as to the latter, as the obligor performs by not doing, he cannot, of course, recover what he has not done. (see 8 Manresa 166.) ART. 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. (1127) Presumption as to benefit of period. 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 debtor. This means that before the expiration of the period, the debtor may notON OBLIGATIONS AND Ark tg, CONTRACTS oe THELAW ; ditor de, tee either may the cre ema, fulfil the obligation and et of the other especially ithout its fulfillment without the the latter would be prejudiced Or oe The presumption, of course, is rebu' ¢ d or iriconvenienced thereby, ‘AMPLE: : if On January 1, D borrowed from C P10,000 payable on December 31 at 15% interest. D cannot pay before December 31 without the consent of C. Neither can C compel D to pay before the expiration of the term. is presumed that the period designated, which is Detube: 51 has been established for the benefit of both. D is benefited because he can use the money for one year. Cis also benefited because of the interest the money would eam for one (1) year. Ina contract of loan with interest, the term is generally for the benefit of both the lender and the borrower. ___ This is also the case even where there is no interest stipulated beh where under the contract, the creditor meccives, in place of interest, other benefits by reason of the Period. (Osorio vs. Salutillo, 87 Phil 356.) : Obviously, in the above exa ample, D can pay C before Hee Jean WHE ied the payment includes the retort bags of rice, C cannat ei8ation of D is to deliver, say 100 belore the expitation ofthe poh eee {© accept performance Prejudiced or inconvenien P°ti04d especially if he would be enienced thereby, Exceptions to the gene The tenor of feats hewewes ak that, ligation or the circumstances may constitute the period et © intention of the parties t the creditor. The benefit of qoe™°At Of either the Hebtot O express stipulation of the partie may be the subject (1) Terms for ty : b be compelled etch of th do so. ata sd Premature Por alone, —He cannot 'e can, if he desires ral rule,‘Art. 1196 DIFFERENT KINDS OF OBLIGATIONS 27 Obligations with a Period EXAMPLES: (1) _D borrowed from C P1,000 to be paid within one (1) year without interest. In this case, the period of one (1) year should be deemed intended for the benefit of D only. Therefore, he can pay any time but he cannot be compelled to pay before one (1) year. (2) D promised to pay his debt “on or before December 31, 2008.” Here, the payment is to be made within a stipulated period. D can pay before said date. (3) D promised to pay his debt “for a term of five (5) years counted from this date.” It has been held that the debt is payable within five (5) years. (Sia vs. Court of Appeals and Valencia, 92 Phil. 355.) (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. EXAMPLE: D borrowed from C P1,000 payable on December 31 with the stipulation that D cannot make payment before the lapse of the period but C may demand fulfillment even before said date. Here, C.can demand payment at any time but D cannot shorten the one-year period without the consent of C. Ordinarily, there must be a stipulation granting the benefit of the term to only the creditor. Computation of term or period. (1) The Administrative Code of 1987, however, pro- vides: Legal Periods — “Year” shall be understood to be twelve calendar months; “month” of thirty days, unless it refers to a specific calendar month in which case itINS AND Au. OBLIGATIO) Nigy THELAW OS NTRACTS A ber of day ding to the num! aS the shall be computed coe ig a day of twenty specific month Ea sunset to sunrise. (Chap, yyy hours; and “nig! 2 Book I, Sec. 31 thereof.) i onth is a month designated in the d to the number of cave it may resale iod of time running from the beginnin, See ant terbeed day up to, but not if there is not sufficient number of days in the next month, then up to and including the last day of that month. To illustrate: One calendar month from December 31, 2010 will be from January 1, 2011 to January 31, 2011; one calendar month from January 31, 2011 will be from February 1, 2011 until February 28, 2011. Under the Administrative Code, a year is composed of 12 calendar months, the number of days being irrelevant. 128 (2) A calendar me calendar without regaré ART. 1197, If the obligation does not fix a Period, but from its nature and the circums- tances it can be inferred that a period was intended, the courts may fix the duration thereof. The courts shall also fix ir 9 the duration of the period when it depends upon the will o the debtor. In every case, t such period as may, “OU"tS Shall determine have been probani’. under the circumstances ties. Once tne an ny sortemplated by the par- not be changed by them. (tiaaen® Period can- Court generally wit to fix 4 period, The period mentioned « «dict i 5 woned in thy a judicial period ag distinguishe, © above es fers t0 aed 2 id Provision refe! parties in their contract which ee the period fixed by th? WN as contractual perio hout power| Art 1197 DIFFERENT KINDS OF OBLIGATIONS 9 Obligations with a Period If the obligation does not state a period and no period is intended, the court is not authorized to fix a period. EXAMPLE: D obliges himself to pay C P10,000. Since the obligation does not fix a period, not even the court may fix a period. The reason is because the contract is the law between the parties and its terms cannot be changed by the court. (Art. 1159.) Exceptions to the general rule. Under Article 1197, there are two (2) cases when the court is authorized to fix the duration of the period. Article 1197 is part and parcel of all obligations contemplated therein. Hence, whenever the court fixes the term of an obligation, it does not thereby amend or modify the same. It merely enforces or carries out the intention of the parties. It cannot arbitrarily fix a period out of thin air. (1) No period is fixed but a period wns intended. — The Obligation does not fix a period but it can be inferred from its nature and the circumstances that a period was intended, EXAMPLES: (1) Dagreed to construct the house of C. The parties failed to fix the period within which the construction is to be made. Here, the court can fix the term for it is evident that the Parties intended that D should construct the house within a certain period. (see Concepcion vs. People, 74 Phil, 63.) (2) B bought lumber from the store of S on credit, The period for payment in the invoice is left blank. From the nature of the obligation, it can be inferred that a period is intended. (see Cosmic Lumber Co, Inc. vs, Eey onuscanONS AND Ast 197 CONTRA‘ geo Qui vo: Court oF Appeals, 66 ‘THELAWO! 130 Manaois, 106 Phil. 4015; 523.) . % ae of land to B with a right of 1 “oe, eee arc ecified in the contract for the a : exercise of the right. ‘The court is authorized to fix the period. (2) Duration of the period depends upon the will of the debtor, — For examples, see comments undet Article 1180. In these two (2) cases, the court must fix the duration of the period to forestall the possibility that the obligation may never be fulfilled. In fixing the term, the court is merely enforcing the implied stipulation of the parties. In every ane. the cous shall determine such period a5 Tay under the circumstances have been probably contemplated by the parties. (Art. 1197, par. 3.) Legal effect where suspensive period! condition depends upon will of debtor. (1) The existence of the obligation i [ee ee debtor. It is only the performance wi i js left to the will of the debtor. tae cane a @Q) If the obligation is subj ject te ati i depends upon the sole will of me 3 9 condition wet obligation is void (Art. 1182.) because i ae Aue ee A case, I actually the fulfillment of the obligati the will of the debtor. (see A ve pte canna Period fixed cannot be by the courts, changed (1) Ifthere is a peri petiod Japsed, the court lod agreed uy : Jose, 66 Phil. 369; eas caer ait hae already ; Millar vs, Nadres, TEBE (Gonzales ¥* 4 il. 307,)Art. 1198 DIFFERENT KINDS OF OBLIGATIONS 131 Obligations with a Period same as if they had expressly agreed upon it, and having been agreed upon by them, it becomes a law governing their contract. (Barretto vs. City of Manila, 11 Phil. 624.) However, the parties may modify the term by a new agreement. ART. 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 ownacts 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 under- taking, in consideration of which the creditor agreed to the period; (5) When the debtor attempts to ab- scond. (1129a) When obligation can be demanded before lapse of period. The general ruleis that the obligation isnotdemandable before the lapse of the period, However, in any of the cases mentioned in Article 1198, the debtor shall lose every right to make use of the period, that is, the period is disregarded‘oN OBLIGATIONS AND Att ugg CONTRA‘ AW! 132 THIEL and the obligation becomes pure and, therefore, immedia fey demandable. The exceptions are based on the fact that the debto, might not be able to comply with his obligation. (1) When debtor becomes insolvent. — EXAMPLE: D owes C P10,000 due and payable on December. If D becomes insolvent, say on September 10, C can demand immediate payment from D even before maturity unless gives sufficient guaranty or security. The insolvency in this case need not be judicially declared. It is sufficient that the assets of D are less than his abilities or D is unable to pay his debts as they mature. Note that the insolvency of D must occur after the obligation has been contracted. (2) When debtor does no furnish guaranties or securities promised. — EXAMPLE: Suppose in the same exam, : ple, D promi house tosecuethedebt Ith falls oe sa ee Deguhoy Taterpi Mee Hs Tight to the period. (see Garchitorena Chereau, 48 Pit 163, 96 Phil. 15; Laplana v6 (3) When guaranti : or have disappeared, — Y °€CUrities given have been impaired EXAMPLE: If the debts se, the sured aoe TE hued nt aa on the house of? . . i equally satisfactory, “le unless ae fhe te AArt, 1198 DIFFERENT KINDS OF OBLIGATIONS 133 Obligations with a Period Ifthe Security given deteriorates in such a manner as to become illusor y, it must be deemed to have disappeared or lost as contemplated in Paragraph 3, If the debt is secured by a bond, the failure of D to renew the bond or replace it with an equivalent guarantee seen its expiration will likewise give C the tight to demand immediate payment. (Gaite vs. Fonacier, 2 SCRA 831.) (4) When debtor violates an undertaking. — EXAMPLE: Now, suppose that C agreed to the period in consider ation of the promise of D to repair the piano of C. The viola, (5) When debtor attempts to abscond. — EXAMPLE: Before the due date of the obligation, D changed his address without informing C and with the intention of escaping from his obligation. This act of D is a sign of bad faith which results in the loss of his right to the benefit of the period stipulated. Observe that a mere attempt or intent to abscond is sufficient. “2600 2