Chapter 3 – Different Kinds of Obligations ART. 1180.

When the debtor binds himself to pay when

his means permit him to do so, the obligation shall be
Classification of Obligations: deemed to be one with a period, subject to the provisions
of Article 1197.
Primary Classification of Obligations
POA–JDO Period – is a future and uncertain event upon the arrival of
1. Pure and Conditional Obligations which the obligation subject to it either arises or is
2. Obligations with a period extinguished.
3. Alternative and facultative obligations
4. Joint and solidary obligations The debtor promises to pay when his means permit him to
5. Divisible and indivisible obligations do so – The obligation shall be deemed to be one with a
6. Obligations with a penal clause period. In this case, what depends upon the debtor’s will is
not whether he should pay or not for indeed he binds himself
Secondary Classification of Obligations to pay. What is left only to his will is the duration of the
URDCL period. If the debtor and the creditor cannot agree as to the
1. Unilateral and bilateral obligations specific time for payment, the court shall fix the same on the
2. Real and personal obligations application of either party.
3. Determinate and generic obligations
4. Civil and natural obligations ART. 1181. In conditional obligations, the acquisition of
5. Legal, conventional and penal obligations rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the
event which constitutes the condition.
Section 1 – Pure and Conditional Obligations
Effect of happening of condition:
ART. 1179. Every obligation whose performance does Condition Effect
not depend upon a future or uncertain event, or upon a Suspensive Condition Acquisition of Rights
past event unknown to the parties, is demandable at
once. In obligations subject to a
suspensive condition, the
Every obligation which contains a resolutory acquisition of rights by the
condition shall also be demandable, without prejudice to creditor depends upon the
the effects of the happening of the event. happening of the event which
constitutes the condition.
Pure Obligation – is one which is not subject to any
condition and no specific date is mentioned for its fulfillment What characterizes this kind
and is therefore, immediately demandable. of obligation is the fact of its
efficacy or obligatory force is
Condition – a future and uncertain event, the happening of subordinated to the happening
of a future and uncertain
which, the effectivity and extinguishment of an obligation
event; so that if the suspensive
subject to it depends.
condition does not take place,
the parties would stand
Characteristics of a condition: as if the conditional obligation
1. Future and uncertain had never existed, or before
2. Past event but unknown to the parties the suspensive condition has
*What is really contemplated by the law is the knowledge taken place, what is acquired
to be acquired in the future of a past event which at the by the creditor is a mere hope
moment is unknown to the parties interested, for it is only or expectancy of
in that sense that the event can be deemed uncertain. This acquiring a right.
knowledge determines whether the obligation will arise
or not.
Resolutory Condition Loss of rights already acquired
Two Principal Kinds of Condition:
1. Suspensive Condition (Condition Precedent or
Condition Antecedent) Effect of Non-compliance with resolutory condition:
- The fulfillment of which give rise to an obligation. resolves the contract by force of law without need of judicial
intervention.
The demandability of the obligation is suspended
until the happening of the condition.
ART. 1182. When the fulfillment of the condition
2. Resolutory Condition (Condition Subsequent) depends upon the sole will of the debtor, the conditional
- The fulfillment of which will extinguish the obligation shall be void. If it depends upon chance or
obligation already existing. upon the will of a third person, the obligation shall take
effect in conformity with the provisions of this Code.
When an obligation is demandable at once P R R
1. When it is a pure obligation
2. When it is subject to a resolutory condition
3. When it is subject to a resolutory period
Classification of Conditions: Depends upon the Obligation is:
As to effect Suspensive the happening of which will of the:
gives rise to an will not just fulfill the condition.
obligation There is no burden on the debtor
Resolutory the happening of which and consequently, no juridical tie is
extinguishes the created.
obligation **Only the condition is VOID if the
As to form Express Condition is clearly obligation is a pre-existing one,
stated and, therefore, does not depend for
Implied Condition is merely its existence upon the fulfillment by
inferred the debtor of the potestative
As to Possible Capable of fulfillment, condition, only the condition is void
possibility legally and physically. leaving unaffected the obligation
Impossible Incapable of itself. Here, the condition is
fulfillment, legally or imposed
physically. not on the birth of the obligation
As to cause Potestative The condition depends but on its fulfillment.
or origin upon the will of one of Creditor VALID
the contracting parties Casual Condition VALID
Casual The condition depends  Chance; or
upon:  Will of a third
 Chance person
OR
 Will of a third Resolutory Condition
person Depends upon the Obligation is:
Mixed The condition depends will of the:
 Partly upon chance Debtor VALID
AND
 Partly upon the will The fulfillment of the condition merely
of a third person causes the extinguishment or loss of
As to mode Positive The condition consists rights already acquired. (Art. 1181.)
in the performance of The debtor is naturally interested in its
an act fulfillment.
Negative The condition consists
in the omission of an The position of the debtor when the
act condition is resolutory is exactly
As to Conjunctive There are SEVERAL the same as that of the creditor when
number conditions and ALL the condition is suspensive.
must be fulfilled
Disjunctive There are SEVERAL A condition which is both potestative
conditions and only (or facultative) and resolutory may be
one or some must be valid, even though the condition is left
fulfilled. to the will of the obligor.
As to Divisible The condition is Creditor VALID
divisibility susceptible of partial
performance
Indivisible The condition is not
ART. 1183. Impossible conditions, those contrary to good
susceptible of partial
customs or public policy and those prohibited by law
performance
shall annul the obligation which depends upon them. If
the obligation is divisible, that part thereof which is not
Potestative Condition – is a condition suspensive in nature affected by the impossible or unlawful condition shall be
and which depends upon the sole will of one of the valid.
contracting parties.
The condition not to do an impossible thing shall be
Potestative/Suspensive Condition considered as not having been agreed upon.
Depends upon the Obligation is:
will of the: Application of Art. 1183:
Article 1183 refers to suspensive conditions. It applies only
Debtor VOID
to cases where the impossibility already existed at the time
the obligation was constituted. If the impossibility arises
Where the potestative condition
after the creation of the
depends solely upon the will of the
obligation, Article 1266 governs.
debtor, the conditional obligation
shall be void because its validity
Two kinds of Impossible Conditions:
and compliance is left to the will of
1. Physically impossible conditions – when they, in the
the debtor (Art. 1308.) and it
nature of things cannot exist or cannot be done.
cannot, therefore, be legally
2. Legally impossible conditions – when they are contrary
demanded.3
to law, morals, good customs, public order or public
policy.
In order not to be liable, the debtor
  It has become evident that the event cannot occur,
although the time indicated has not yet elapsed.

Effect of Impossible Conditions: ART. 1186. The condition shall be deemed fulfilled when
Circumstance Effect the obligor voluntarily prevents its fulfillment.
Impossible conditions annul the Conditional Obligation
obligation which depends upon is VOID Requisites for Constructive Fulfillment of Suspensive
them. Condition:
(1) The condition is suspensive;
Both the obligation and the (2) The obligor actually prevents the fulfi llment of the
condition are void. The reason condition; and
behind the law is that the (3) He acts voluntarily.
obligor knows his obligation
cannot be fulfilled. He has no The law does not require that the obligor acts with malice or
intention to comply with fraud as long as his purpose is to prevent the fulfillment of
his obligation. the condition. He should not be allowed to profit from his
own fault or bad faith to the prejudice of the obligee. In a
If the condition is negative, that Conditional Obligation
reciprocal obligation, both parties are mutually obligors and
is, not to do an impossible thing, is VALID
also obligees.
it is disregarded and the
obligation is rendered pure and
Article 1186 applies also to an obligation subject to a
valid. (par. 2.) Actually, the
resolutory condition with respect to the debtor who is bound
condition is always fulfilled
to return what he has received upon the fulfillment of the
when it is not to do an
condition.
impossible thing so that it is the
same as if there were no
ART. 1187. The effects of a conditional obligation to give,
condition. The negative
once the condition has been fulfilled, shall retroact to the
condition may be not to give an
day of the constitution of the obligation. Nevertheless,
impossible thing.
when the obligation imposes reciprocal prestations upon
If the obligation is divisible, the Only the affected the parties, the
part thereof not affected by the obligation is VOID fruits and interests during the pendency of the condition
impossible condition shall be shall be deemed to have been mutually compensated. If
valid. the obligation is unilateral, the debtor shall appropriate
If the obligation is a pre- Only the condition is the fruits and interests received, unless from the nature
existing obligation, and, VOID and circumstances of the obligation it should be inferred
therefore, does not depend upon that the intention of the person constituting the same was
the fulfillment of the different.
condition which is impossible,
for its existence, only the In obligations to do and not to do, the courts shall
condition is void. determine, in each case, the retroactive effect of the
condition that has been complied with.
ART. 1184. The condition that some event happen at a
determinate time shall extinguish the obligation as soon Retroactive Effects of Fulfillment of Suspensive
as the time expires or if it has become indubitable that Condition
the event will not take place. Kind of Obligation Effect
TO GIVE An obligation to give subject
Positive condition – is the happening of an event at a to a suspensive condition
determinate time with the effect of extinguishing the becomes demandable only
obligation AS SOON AS: upon the fulfillment of the
 The time expires without the event taking place; OR condition. However, once the
 It has become indubitable that the event will not condition is fulfilled, its
take place although the time specified has not yet effects shall retroact to the
expired. day when the obligation was
constituted.

ART. 1185. The condition that some event will not The reason is because the
happen at a determinate time shall render the obligation condition is only an
effective from the moment the time indicated has elapsed, accidental element of
or if it has become evident that the event cannot occur. a contract. An obligation can
exist without being subject to
If no time has been fixed, the condition shall be deemed a condition. Had the parties
fulfilled at such time as may have probably been known beforehand that the
contemplated, bearing in mind the nature of the condition would be fulfilled,
obligation. they would have bound
themselves under a pure
Negative Condition – condition that an event will not obligation. Hence, the
happen at a determinate time. The obligation shall become obligation should be
effective and binding FROM THE MOMENT: considered from the time
 The time indicated has elapsed without the event it is constituted and not from
taking place; OR the time the condition is
fulfilled.
 Kind of Obligation Effect
It would seem that the rule on
retroactivity has no
application to real contracts
as they are perfected only by
delivery of the object of the
obligation.
TO DO or NOT TO DO No fixed rule is provided.
This does not mean, however,
that in these obligations the
principle of retroactivity is
not applicable.
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.) It includes the
power to decide that the
fulfillment of the condition
shall have no retroactive
effect or from what date such
retroactive effect shall be
reckoned.
Retroactive Effects as to Fruits and Interests
Obligation Effect as to Fruits and
Interests
Reciprocal Obligations NO RETROACTIVE
EFFECT
There is no retroactivity
because the fruits and
interests received during
the pendency of the
condition are deemed to
have been mutually
compensated.
This rule is necessary for
purposes of convenience
since the parties would not
have to render mutual
accounting of what they
have received. Fruits here
may be natural, industrial,
or civil fruits.
Unilateral Obligations NO RETROACTIVE
EFFECT
The debtor usually 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.
ART. 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 fulfillment of suspensive condition:
Creditor Debtor
He may take or bring He is entitled to recover
appropriate actions what he has paid by
for the preservation of his mistake prior to the
right, as the debtor may happening of the
render nugatory the suspensive condition. This
obligation upon the right is granted to the
happening of the condition. debtor because the creditor
may or may not be able to
Thus, he may go to court to fulfill the condition
prevent the alienation or imposed and hence, it is not
concealment of the certain that the obligation
property of the debtor or to will arise. This is a case of
have his right annotated in solutio indebiti which is
the registry of property. based on the principle that
no one shall enrich himself
The rule in paragraph one at the expense of
applies by analogy to another.
obligations subject to a
resolutory condition. 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.
ART. 1189. When the conditions have been imposed with
the intention of suspending the effi cacy 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 of application of Art. 1189:
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; and
5. There is loss, deterioration, or improvement of the
thing during the pendency of the happening on one
condition.
Rules to apply for loss, deterioration, improvement of the
thing during the PENDENCY of the condition:
Particulars Effect
Lost WITHOUT debtor’s fault Obligation is extinguished
Lost THROUGH debtor’s Damages
fault
Deteriorates WITHOUT Impairment is to be borne
debtor’s fault by the creditor
Deteriorates THROUGH The creditor may choose
debtor’s fault between:
- Recission + Damages
- Fulfillment + Damages
Improvement by its nature or Improvement shall inure to
by time the benefit of the creditor
Improvement at the expense He shall have no other
of the debtor right than that granted to
the usufructuary.
ART. 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.
Effect of fulfilment of resolutory condition:
 In obligations to give:
the obligation is extinguished (Art. 1181.) and the
parties are obliged to return to each other what they
have received under the obligation.
(a) There is a return to the status quo. In other words,
the effect of the fulfillment of the condition is
retroactive.
(b) The obligation of mutual restitution is absolute. It
applies not only to the things received but also to
the fruits and interests.
(c) In case the thing to be returned “is legally in the
possession of a third person who did not act in bad
faith” (see Art. 1384, par. 2.), the remedy of the
party entitled to restitution is against the other.
(d) In obligations to give subject to a suspensive
condition, the retroactivity admits of exceptions
according to whether the obligation is bilateral or
unilateral. (see Art. 1187.) Here, there are no
exceptions, whether the obligation is bilateral or
unilateral.
The reason for the difference is quite plain. The
happening of the suspensive condition gives birth
to the obligation.
On the other hand, the fulfillment of the resolutory
condition produces the extinguishment of the
obligation as though it had never existed. The only
possible exception is when the intention of the
parties is otherwise.
(e) If the condition is not fulfilled, the rights acquired
by a party become vested.
 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.) as in the case where the condition
is suspensive. (Art. 1187, par. 2.) The courts in the
exercise of discretion may even disallow
 retroactivity taking into account the circumstances 2. First infractor cannot be determined – the obligation
of each case. shall be deemed extinguished and each shall bear his
own damages.

ART. 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. Bilateral obligations
may be reciprocal or non-reciprocal.
2.1 Reciprocal Obligations
- 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.

The general rule is that they are to be

performed simultaneously or at the same
time such that each party may treat the
fulfillment of what is incumbent upon the
other as a suspensive condition to his
obligation and its non-fulfillment, as a tacit
or implied resolutory condition, giving him
the right to demand the rescission of the
contract, i.e., it may be exercised even if it
is not provided in the agreement of the
parties.

2.2 Non-reciprocal Obligations

- those which do not impose simultaneous
and correlative performance on both
parties. In other words, the performance of
one party is not dependent upon the
simultaneous performance by the other.

Art. 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 violated the contract, the
same shall be deemed extinguished, and each shall bear
his own damages.

Two Situations under Art. 1192:

1. First infractor known – the liability of the first infractor
should be equitably reduced.