Law on “Obligations and Contracts”

Section 2: Obligations with a Period

Art 1193
Obligations for whose fulfillment a day certain has been fixed, shall be demandable 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
conditional, and it shall be regulated by the rule of the preceding section.
 Obligations with a period = effects are subjected upon the expiration or arrival of the said
term.
 Period = future and certain events where it is a day certain (whether we like it or not)
which must necessarily come.
Difference b/w Period and Condition
Period Condition
As to Fulfillment Certain event which must Uncertain event
happen, and date known
beforehand
As to Time Refer only to future Refer to future and past event
unknown
As to Influence on the Merely fixes the time Causes obligation to arise or
obligation Suspensive – birth of to cease
obligation
Resolutory – does not
invalidate the fact that
obligation existed
As to effect, when left to Depends upon the will of Depends upon the sole will of
debtor’s will debtor = court fixes duration the debtor = invalidates the
obligation
Retroactivity of effects Arrival of period = no Has retroactive effect
retroactive effect

“period is like a condition where it must be possible but if it is impossible, the obligation is void”

Kinds of Period or Term

 Law on “Obligations and Contracts”

1. According to effect:
a. Suspensive Period – aka Ex Die (pronounced as Ex Di – ye)
- Obligations begin from the day certain.
- Example: I will support from the time your father dies
b. Resolutory Perion – aka In Diem (pronounced as In Di-yem)
- Obligations is valid until the day certain.
- Example: I will support until you graduated.
2. According to source
a. Legal Period – provided by laws
b. Conventional or Voluntary period – agreed by parties
c. Judicial period – fixed by court
3. According to definiteness
a. Definite period – fixed or known
b. Indefinite period – not fixed or known / period is intended, and courts usually
empowered to fix the same.
Art 1194
In case of loss, deterioration, or improvement if the thing before the arrival of the day
certain, the rules in article 1189 shall be observed.
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.
Payment before arrival of period
 Applies only to obligation to give.
 Related to Solutio Indebiti – art 1188
 Creditor cannot unjustly enrich himself by retaining the thing received before
arrival of period.
 Payment cannot be recovered if the debtor has the knowledge of the period.
 Obligor may no longer recover the thing or payment once the period has arrived, but he
can recover fruits and interests, those before the date of maturity
 No recovery in personal obligation (to do or not to do) – because the debtor cannot really
recover or undo the things being done
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.
G.R: Both parties are benefited by the period
 Law on “Obligations and Contracts”

Example:
On January 1, A borrowed from B 10k payable on December 31 at 15% interest.
 A cannot pay before December 31 without B’s consent and neither B can compel
A to pay before expiration of the term.
 But A can pay before December 31 where interest of it is included.
A is to deliver 200 bags of rice
 B cannot compel to accept performance before expiration especially if it would be
prejudiced or inconvenient to him.
Exceptions to General Rule:
1. Term is for the benefit of the debtor alone
 He cannot be compelled to pay in advanced, but he can, if he desires to do so.
2. Term is for the benefit of the creditor
 May demand fulfillment even before arrival of the period but cannot require
accepting payment before expiration.
Computation of term or period
 Legal periods
1) Year – twelve calendar months
2) Month – thirty days, unless refers to specific calendar month where it shall be
computed according to number of days
3) Day – twenty-four hours
4) Night – sunset to sunrise
 Calendar month - calendar without regard to the number of days it may contain
- A period of time running from the beginning of a certain numbered day up to,
but not if there is not sufficient number of days in the next month.
- Example: one calendar month from January 31, 2020 – it will be from
February 1 to February 28
Art 1197
If the obligation does not fix a period, but from its nature and the circumstances it can be
inferred that a period was intended, the courts may fix 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 bbeen probable contemplated by the parties. Once fixed by the courts, the period cannot be
changed by them (1128a)
 Refers to judicial period
 Contractual period – period agreed by the parties
 Law on “Obligations and Contracts”

Court generally without power to fix period

- Court is not authorized to fix the period if there is no fixed term on the obligation.
Exceptions:
 No period fixed but period was intended
 No fixed period but can be recognized through its nature and circumstances.
 Duration depends upon the will of the debtor = related to art 1180
 Court must fix the duration to prevent unfulfilled obligation
 Court shall determine the period as may under the circumstances of the
agreement.
Legal effect where suspensive period / condition depends upon will of debtor
1) Existence of the obligation is not affected even if the period depends upon the will of the
debtor since it is only the performance which matters.
2) If subject to a condition, conditional obligation is void if it depends upon the sole will of
the debtor (Art 1182) since the performance of the obligation depends on the debtor (Art
1308)
Period fixed cannot be changed by the courts
 If the period was fixed by the parties and has already lapsed
 If the parties agreed to the period fixed by the court, said period acquires the nature of the
obligation since the effect is exactly the same as if they had expressly agreed upon it.
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 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. (1129a)
GR: Obligation is not demandable before the lapse of the period.
 Law on “Obligations and Contracts”

 Lose every right to make use of the period once the period is disregarded since the
obligation became pure and demandable
Exceptions: (based on the fact that debtor will not be able to comply obligations)
1) Debtor becomes insolvent
2) Does not furnish guaranties or securities promised – terms became demandable
3) Guaranties or securities have been impaired or have disappeared
4) Debtor violates an undertaking
5) Debtor attempts to abscond – depart secretly or hide