BUSLAW

SUSPENSIVE CONDITION

A condition the fulfillment of which will give rise to the

acquisition of a right. While the condition has not arrived
yet, in the meantime, the rights and obligations of the
parties are suspended.
 EFFECTS
1. Real obligations

GR: Retroacts to the day of the constitution of the obligation.

XPNs: There is no retroactive effect with respect to the fruits and interest:

a. In reciprocal obligations, the fruits and interests shall be deemed to have been
mutually compensated; and b. In unilateral obligations, the debtor appropriates
the fruits and interest received before the fulfillment of the condition unless
contrary to the intention of the parties (NCC, Art. 1187).
2. Personal obligations

– the court determines the retroactive effect of

the condition fulfilled (NCC, Art. 1187).
RESOLUTORY CONDITION

A condition where the rights already acquired

are lost upon fulfillment of the condition. It is
also known as condition subsequent.
EFFECTS
1. Real obligations:
a. The parties shall return to each other what they have received
(mutual restitution); b. Obligation is extinguished; c. In case of loss,
deterioration or improvement of the thing, NCC, Art. 1189, with
respect to the debtor, shall be applied to the party who is bound to
return (NCC, Art. 1190)
2. Personal obligations –

The courts shall determine, in each case, the retroactive effect

of the condition that has been complied with. (NCC, Art. 1187;
NCC, Art. 1190).
PROBLEM
Q: The late Don Lopez, Sr., who was then a member of the Board of
Trustees of CPU, executed a deed of donation in favor of the latter
involving a parcel of land subject to the condition that it shall be
utilized for the establishment and use of a medical college. However,
the heirs of Don Lopez, Sr., filed an action for annulment of the
donation, reconveyance and damages against CPU alleging that CPU
did not comply with the conditions of the donation. Are the conditions
imposed resolutory or suspensive?
ANSWER
Under Art. 1181 of the CC, on conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the happening of the
event which constitutes the condition. Thus, when a person donates land to another on the
condition that the latter would build upon the land a school, the condition imposed was not a
condition precedent or a suspensive condition but resolutory. It is not correct to say that the
school house (or the establishment and use of a medical college in this case) had to be
constructed before the donation became effective, that is, before the donee could become
the owner of the land, otherwise, it would be invading the property rights of the donor. The
donation had to be valid before the fulfillment of the condition. If there was no fulfillment or
compliance with the condition, the donation may now be revoked and all rights which the
donee may have acquired under it shall be deemed lost and extinguished (Central Philippine
University v. CA, G.R. No. 112127, July 17, 1995)
OBLIGATIONS WITH A PERIOD

Obligations for whose fulfillment a day certain has been

fixed, shall be demandable only when that day comes (NCC,
Art. 1193).
ALTERNATIVE, FACULTATIVE, CONJUNCTIVE
OBLIGATIONS
Alternative obligation
It is an obligation where the debtor is alternatively bound by
different prestations but the complete performance of one is
sufficient to extinguish the obligation.
Facultative obligation

It is an obligation where the debtor, who has a reserved

right to choose another prestation or thing, is bound to
perform one of the several prestations due or to deliver
a thing as a substitute for the principal.
Conjunctive obligation

An obligation where the debtor has to perform

several prestations; it is extinguished only by the
performance of all of them.
OBLIGATIONS WITH A PENAL CLAUSE

An obligation with a penal clause is one with an

accessory undertaking by virtue of which the obligor
assumes a greater liability in case of breach of the
obligations.
PENAL CLAUSE

A penal clause is an accessory undertaking to asume greater

liability in case of breach. It is attached to an obligation in
order to insure performance. The penalty is generally a sum
of money. But it can also be any othe thing stipulated by the
parties, inlcuding an act or abstention.
Q/A
Q: Can the debtor just choose penalty over non-fulfillment?

A: GR: The debtor cannot exempt himself from the performance of the
obligation by paying the penalty (NCC, Art. 1227).

XPN: When the right has been expressly reserved to the debtor (NCC, Art.
1227).