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A - B. Pure and Conditional

Bachelor of Science In Accountancy (University of San Jose - Recoletos)

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II. DIFFERENT KINDS OF OBLIGATIONS
a. Pure (1179)
ART. 1179. Every obligation whose performance does not
depend upon a future or uncertain event, or upon a past
event unknown to the parties, is demandable at once. Every
obligation which contains a resolutory condition shall also be
demandable, without prejudice to the effects of the
happening of the event.
Meaning of pure obligation.
A pure obligation is one which is not subject to any condition
and no specific date is mentioned for its fulfillment and is,
therefore, immediately demandable.
A pure obligation is one without a term or condition and is
demandable at once.
EXAMPLES:
(1) I promise to give you P5,000. This is immediately
demandable since there is no term that must expire or a
condition that must happen for the obligation to be
demandable.
(2) D obliges to pay C P10,000. The obligation is immediately
demandable if there is no condition and no date is mentioned
for its fulfillment. Of course, if the loan has just been
contracted by D, a period must have been intended by the
parties for performance but the duration thereof will depend
upon the nature of the obligation and the circumstances. A
distinction must be made between the immediate
demandability of a pure obligation and its fulfillment by the
obligor who may be granted by the court a reasonable period
for performance. The period remains pure even where such
period is fixed by the court.
(3) D promises to pay C P26,900 upon receipt by D of his share
from the estate of X or “upon demand of C.” The obligation of
D is immediately due and demandable, for C may rely on the
wording “upon demand.”
When his means permit him (1180)
ART. 1180. When the debtor binds himself to pay when his
means permit him to do so, the obligation shall be deemed to
be one with a period, subject to the provisions of Article 1197.
If debtor will pay when his means permit him to do so, or
words of similar import, such as:
a) “when I can afford”
b) “when I am able to”
c) “when I have money”
The obligation is not conditional but with a period. The
payment here does not depend upon the will of the debtor –
it is only the time when payment is to be made. Since we are
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referring to the time of effectivity, we consider it a term or a
period.
Period defined: it is a future and certain event upon the
arrival of which the obligation subject to it either arises or is
extinguished. It may also be considered as a space of time
which has an influence on obligation as a result of a juridical
act and either suspends their demandableness, or produces
their extinguishment.
When is the obligation demandable
Since the time for payment (not the payment) depends upon
the will of the debtor, immediate performance cannot be
enforced. The right of the creditor is to go to court and let the
court fix the date of the payment. The creditor in this case is
not demanding payment, he is only asking the court to fix the
date for payment. Once fixed by the court, the obligation
becomes demandable on the date fixed.
Decided cases considered obligation with a period
a) Payable “as soon as possible”
b) “little by little”
c) “in partial payment”
d) “When I am in position to pay”
e) “when I have the money”
b. Conditional
Condition defined
Condition is a future and uncertain event, upon the
happening of which, the effectivity or extinguishment of an
obligation (or rights) subject to it depends.
It is an uncertain event which wields an influence on a legal
relationship.
Meaning of conditional obligation.
A conditional obligation is one whose consequences are
subject in one way or another to the fulfillment of a
condition.
A conditional obligation is one whose demandability or
extinguishment depends upon the happening condition.
There is a condition imposed in its performance.
Example:
1. "I will give you my car if you pass the CPA Examination" the
condition here is suspensive. You may not demand the
delivery of my car until you pass the CPA Examination
2. "I will let you use my car until you pass the CPA
Examination" the condition here is resolutory. You may
demand the delivery of the car now but you must return it to
me when you pass the CPA Examination.
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Characteristics of Condition Does not take place, the tie

of law (juridical or legal tie) The tie of law is consolidated
(1) Future and uncertain. — In order to constitute an event a does not appear
condition, it is not enough that it be future; it must also be
uncertain. The first paragraph of Article 1179 obviously uses
the disjunctive or between “future” and “uncertain” to Its effects flow, but over it,
distinguish pure obligation from both the conditional The existence of the
hovers the possibility of
obligation and one with a period. Be that as it may, the word obligation is a mere hope
termination.
“or” should be “and.” Therefore, if the event is not uncertain
and will necessarily happen, it cannot be treated as a
condition, but it will be considered as an obligation with a Example: X insured his car
term. Example: I will give you my
with an insurer against loss
specific car today but you
and damage. It was
(2) Past but unknown. — A condition may refer to a past should pass the October
stipulated in the policy that
event unknown to the parties. If it refers to a future event, 2011 CPA Examination, my
the driver of the insured car
both its very occurrence and the time of such occurrence obligation is terminated.
must be the owner of a valid
must be uncertain; otherwise, it is not a condition. A
and subsiding license. Later,
condition must not be impossible. Today, you already have a
the car was involved in an
accident, and the driver had right to demand a delivery
(3) The condition must be possible of performance.
an expired license. and to use it after the
Suspensive vs. Resolutory (1181) delivery. But if you pass the
CPA Examination in October
In here, the insurer is not
ART. 1181. In conditional obligations, the acquisition of rights, 2011, your right already
liable because the condition
as well as the extinguishment or loss of those already acquired will be lost because
preceding the obligation at
acquired, shall depend upon the happening of the event the condition was already
the time of the accident was
which constitutes the condition. fulfilled.
not met.
Suspensive Condition Resolutory Condition
(a) (condition precedent or Actually, the birth, perfection or effectivity of the
(condition subsequent)
contract condition
subjectantecedent)
to a condition can take place only if and when the condition happens or is fulfilled. If the suspensive condition
doesCondition then Obligation
not take place, Obligation
the parties would stand asthen
if theCondition
conditional obligation had never existed.
“Debtor becomes the
“No fulfillment of condition –
Creditor, Creditor becomes (b) It must appear that the performance of an act or the
No obligation.”
the Debtor” happening of an event was intended by the parties as a
This is a condition the suspensive condition, otherwise, its non-fulfillment will not
The happening of which will
happening of which prevent the perfection of a contract. Thus, where there is no
give rise to the obligation.
extinguishes that obligation. provision in a contract of sale declaring it without effect
until after the opening of a letter of credit by the buyer as
The demandability of the The obligation is demandable required by the seller, the omission to so open does not
obligation is suspended until at once but it shall be prevent the perfection of the contract, such opening being
the happening of the extinguished upon the only a mode of payment and is not among the essential
condition. happening of the condition. requirement of a contract of sale enumerated in Articles
1305 and 1475.

When an obligation is subject (c) There can be no rescission of an obligation that is still
to a suspensive condition, its non-existent, the suspensive condition not having been
birth takes place or its fulfilled.
effectivity commences only if
Note: A distinction must be made between a condition
and when the event that
imposed on the perfection of a contract and that imposed on
constitutes the condition
the performance of an obligation. Failure to comply with the
happens or is fulfilled.
first condition results in the failure of a contract, while failure
to comply with the second (e.g., condition that the seller shall
eject the squatters on the property sold within a certain
If it is the resolutory period), only gives the other party the option either to refuse
If the suspensive condition is
condition that is fulfilled, the to proceed with the sale or to waive the condition.
fulfilled, the obligation arises
obligation is extinguished

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upon the sole will of the debtor, the conditional obligation

Where suspensive condition depends upon the will of
debtor

EXAMPLES:
(1) “I will pay you if I want.”
(2) “I will pay you after I receive a loan from a bank.”
(3) “I will pay you after I recover what D owes me.”
(4) “I will pay you after I have harvested fish.”
(5) “I will pay you upon the sale of the house in which I live.”
(6) “I will pay you the price of the forest concession you sold
me upon my operation of the same.”
(7) The contract of lease provides that the lease shall continue
“for as long as the lessee needed the premises and can meet
and pay the 20% increase every three years.”
In all the above cases, both the conditions and the obligations
are void. The conditions in examples Numbers 2 to 6 are
tantamount to a debtor telling the creditor that he would pay
his obligation when and if he wants. In example No. 7, the
effectivity and fulfillment of the contract of lease depends
exclusively upon the uncontrolled choice of the lessee.

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.

EXAMPLE: D borrowed P10,000.00 from C payable within two

(2) months. Subsequently, D promised to pay C “after D sells
his car” to which C agreed. In this case, only the condition is
void but not the pre-existing obligation of D to pay C.

Where suspensive condition depends upon the will of

creditor.

If the condition depends exclusively upon the will of the

creditor, the obligation is valid.

EXAMPLE: “I will pay you my indebtedness upon your

demand.” The obligation does not become illusory. Normally,
the creditor is interested in the fulfillment of the obligation
because it is for his benefi t. It is up to him whether to enforce
his right or not. 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. The fulfillment of the condition merely
causes the extinguishment or loss of rights already acquired.
The debtor is naturally interested in its fulfillment. The
position of the debtor when the condition is resolutory is
exactly the same as that of the creditor when the condition is
suspensive. A condition which is both potestative (or
facultative) and resolutory may be valid, even though the
condition is left to the will of the obligor.

Potestative vs. Casual vs. Mixed (1182)

ART. 1182. When the fulfillment of the condition depends

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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

Potestative
Casual Condition Mixed Condition
Condition
A condition that
A condition depends partly
suspensive in A condition that upon the will of
nature and which depends upon one of the parties
depends upon the chance or upon and partly upon
sole will of one of the will of a third chance or upon
the contracting person. the will of a third
parties. person.
One which
depends upon the This is a valid This is also a valid
will of one of the obligation obligation
parties
Facultative
condtion

a. Potestative on the part of the debtor, If suspensive -

the obligation is void. Even if the condition is
fulfilled, the obligation is not demandable. Both
condition and obligation is void.

Example:
D is to give C P50,000 if D goes to Baguio.
I’ll give you P10,000 if I like

b. Potestative on the part of the debtor, If resolutory -

the obligation is valid.

Example: D is to allow the use of his car by C until

D returns from Baguio.

c. Potestative on the part of the creditor - the

obligation is valid whether the condition is suspensive
or resolutory.

Examples:

1.) D is to give C P 50,000 if C goes to Baguio.

2.) D is to allow the use of his car by C until C returns
from Baguio.
3.) I will give you P10,000 if you like

Casual condition.

(1) If the suspensive condition depends upon chance or

upon the will of a third person, the obligation subject to it
is valid.

EXAMPLES:

(1) Where X, building contractor, obliges himself in favor

of Y owner, to repair at X’s expense any damage that may
be caused to the building by any earthquake occurring
within ten
(10) years from the date of the completion of its construction.

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(2) Where S binds himself to sell his land to S if he wins a case (2) Legally impossible conditions. — when they are contrary
which is pending before the Supreme Court. to law, morals, good customs, public order, or public policy.

(2) When the fulfillment of the condition does not depend on Effect of impossible conditions.
the will of the obligor, but that on a third person who can in
no way be compelled to carry it out, and it is found by the Conditional obligation void. — to do an impossible or illegal
court that the obligor has done all in his power to comply thing. Both the obligation and the condition are void. The
with his obligation, his part of the contract is deemed reason behind the law is that the obligor knows his obligation
complied with and he has a right to demand performance of cannot be fulfilled. He has no intention to comply with his
the contract by the other party. obligation. In conditional testamentary dispositions and in
simple and remuneratory donations, the rule is different.
Mixed condition.
Example: I’ll give you P10,000 if you will make a dead man
The obligation is valid if the suspensive condition depends alive.
partly upon chance and partly upon the will of a third person.
Conditional obligation valid. — If the condition is negative,
EXAMPLE: Where X, building contractor, obliges himself in that is, not to do an impossible thing or illegal thing, it is
favor of Y, owner, to repair at X’s expense, any damage to disregarded and the obligation is rendered pure and valid.
the building taking place after an earthquake if found by a Both the condition and the obligation are valid. Actually, the
panel of arbitrators that construction defects contributed in condition is always fulfi lled when it is not to do an impossible
any way to the damage. Both conditions must take place in thing so that it is the same as if there were no condition. The
order that X’s obligation will arise. negative condition may be not to give an impossible thing.
Impossible and Illegal (1183) Example: I will give you P10,000 if you will not kill X.
ART. 1183. Impossible conditions, those contrary to good Only the affected obligation void. — If the obligation is
customs or public policy and those prohibited by law shall divisible, the part thereof not affected by the impossible
annul the obligation which depends upon them. If the condition shall be valid.
obligation is divisible, that part thereof which is not affected
by the impossible or unlawful condition shall be valid. The EXAMPLE: “I will give you P10,000.00 if you sell my land,
condition not to do an impossible thing shall be considered as and a car, if you kill Pedro.” The obligation to give
not having been agreed upon. P10,000.00 is valid but the obligation to give a car is void
because it is dependent upon an impossible condition.
Possible Impossible
One that is capable of Only the condition void. — If the obligation is a pre-
One that is not capable of
fulfillment in its nature and existing obligation, and, therefore, does not depend upon
fulfillment in its nature
by law. the fulfi llment of the condition which is impossible, for its
Such as "if you can swim existence, only the condition is void.
across the Pacific Ocean," or
due to operation of law, such EXAMPLE: D incurred an obligation in the amount of
as "if you kill X." In this case, P10,000.00 in favor of C. If C later agreed to kill X before D
the obligation and the pays him, the condition “to kill X” is void but not the pre-
condition are void. existing obligation of D “to pay C.”
Note: if the condition is not
If the condition is negative, that is, not to do the impossible,
to do an impossible thing, it
just disregard the condition, but the obligation remains.
shall be deemed as not
having been agreed upon. Example: I will give you P10,000 if you cannot make a circle
Thus, the obligation is that is at the same time a square.
immediately demandable.
Example: D is to give C Positive Condition (1184)
P50,000 if C does not swim
across the Pacific Ocean. ART. 1184. The condition that some event happen at a
determinate time shall extinguish the obligation as soon as
Two kinds of impossible conditions. the time expires or if it has become indubitable that the event
will not take place.
They are:
Positive Condition Negative Condition
(1) Physically impossible conditions. — when they, in the This is a condition that some This is a condition that some
nature of things, cannot exist or cannot be done; and event happen at a event will not happen at a
determinate time. determinate time.

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extinguished because
Here, the the istime indicated
obligation Here, thehas alreadybecomes
obligation elapsed.
extinguished as soon as the effective as soon as the time
time expires or it has become indicated has elapsed or it Effect if period of fulfillment is not fixed
indubitable that the event has become evident that the
will not take place. even will not occur. Article 1185, paragraph 2 states that 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
Example: D is to give P50,000 Example: D is to give C
of the obligation. This rule will apply if the period for
if C will marry X on or before P50,000 if C will not marry X
fulfillment is not stated.
June 30, 2016. The obligation on or before June 30, 2016.
will be extinguished on July The obligation becomes Negative Condition (1185)
1, 2016 if C has not yet effective on July 1, 2016 if C
married X as of June 30, gas not yet married X as of ART. 1185. The condition that some event will not happen at a
2016. June 30,2016. determinate time shall render the obligation effective from
If X dies on June 1, 2016 If X dies on June 1, 2016 the moment the time indicated has elapsed, or if it has
before C has married her, before C has married her, become evident that the event cannot occur. If no time has
then the obligation is then the obligation becomes been fi xed, the condition shall be deemed fulfilled at such
extinguished on such date effective on such date time as may have probably been contemplated, bearing in
because there is no more because there is no more mind the nature of the obligation.
doubt that the marriage will doubt that the marriage will
not take place. not take place. The above provision speaks of a negative condition that an
event will not happen at a determinate time.
The above article refers to a positive (suspensive) condition —
the happening of an event at a determinate time. The The obligation shall become effective and binding:
obligation is extinguished:
(1) from the moment the time indicated has elapsed without
(1) as soon as the time expires without the event taking place; the event taking place; or
or
(2) from the moment it has become evident that the event
(2) as soon as it has become indubitable that the event will cannot occur, although the time indicated has not yet
not take place although the time specifi ed has not yet elapsed. If no time is fixed, the circumstances shall be
expired. considered to determine the intention of the parties. This rule
may also be applied to a positive condition.
EXAMPLE: X obliges himself to give Y P10,000.00 if Y will
marry W before Y reaches the age of 23. (a) X is liable if Y EXAMPLE: X binds himself to give Y P10,000.00 if Y is not yet
marries W before he reaches the age of 23. (b) X is not liable married to W on December 30. (a) X is not liable to Y if Y
if Y marries W at the age of 23 or after he reaches the age of marries W on December 30 or prior thereto. (b) X is liable to Y
23. In this case, the time speci ed, before reaching the age of if on December 30 Y is not married to W or if Y marries W
23, has expired without the condition (marrying W) being after December 30. In the latter case, the condition (not
fulfilled. The obligation is extinguished as soon as Y becomes
marrying W) is fulfilled upon the expiration of the time
23 years old. (c) If Y dies at the age of 22 without having
married W, the obligation is extinguished because it has indicated, which is December 30. (c) Suppose W dies on
become indubitable that the condition will not take place. In November 20 without having been married to Y. The
this case, the obligation of X is deemed extinguished from the obligation is rendered effective because it is certain that the
death of Y, although the time specified (before reaching the condition not to marry W will be fulfilled. In this case, the
age of 23) has not yet expired. obligation becomes effective from the moment of W’s death
on November 20 although the time indicated (December 30)
Effects of positive condition
has not yet elapsed.
Example: I will give you a specific car if you will marry X this
year, 2011. Effects of Negative condition

a. If you marry X on December 20, my obligation is to give Example: I will give you a specific car if you will not marry X
you the car. this year, 2011
b. If on December 20, X died, without marriage, my
obligation is extinguished because one party is dead. a. If on December 20 you marry X, my obligation is
Marriage is impossible to take place. extinguished because you violated the condition.
c. If the year has ended, no marriage taking place, both b. If on December 20, X died and no marriage took
parties are alive, just the same my obligation is place, my obligation becomes effective (not

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extinguished), because the expected event cannot
occur anymore.
c. If the year has ended, and no marriage took place,
both parties are still alive, my obligation becomes
effective (not extinguished) because the time
indicated has already elapsed.
Summary: When an obligation is demandable if the
condition is positive
a. When it becomes indubitable, clear and evident that
the event will not take place.
b. When the time expires without the event taking
place.
Summary: When an obligation is demandable if the
condition is negative
a. When the time has elapsed without the prohibited
event taking place.
b. When it becomes clear or evident that the prohibited
event cannot occur, although the time indicated has
not yet elapsed.
Constructive Fulfillment (1186)
ART. 1186. The condition shall be deemed fulfilled when the
obligor voluntarily prevents its fulfillment.
Constructive fulfillment of suspensive condition
There are three (3) requisites for the application of this
article:
(1) The condition is suspensive;
(2) The obligor actually prevents the fulfillment of the
condition; and
(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. In a reciprocal obligation
like a contract of sale, both parties are mutually obligors
and also obligees.
EXAMPLES:
(1) X agreed to give Y a 5% commission if the latter could sell
the former’s land at a certain price. Y found a buyer who
definitely decided to buy the property upon the terms
prescribed by X. To evade the payment of the commission
agreed upon, X himself sold to the buyer the property at a
lower price without the aid of Y.
In this case, it can be said that the due performance by Y of
his undertaking, the condition for the payment of the
commission, was purposely prevented by X, and is deemed
fulfilled.
(2) S promised to sell his land to Y if Y would be able to secure
a loan from a certain bank. Later on, S changed his mind
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about selling his land. He induced the bank not to give Y a
loan. Under the above article, the condition is deemed
complied with and S is liable to sell his land. S should not be
allowed to profit by his own fault or bad faith.
(3) Suppose the inducement made by S was promoted by
some other reason, is there constructive fulfillment? Yes. The
law does not require that S act with malice or fraud as long as
his purpose is to prevent the fulfillment of the condition. But
Article 1186 does not apply if the act of the obligor is in the
exercise of a right.
(4) X agreed to paint the house of Y for P50,000 after
completion. Before X could complete the job, Y hired Z,
another contractor, who finished the painting. The condition
— painting of the house — is deemed fulfilled under Article
1186 and Y’s obligation to pay X P50,000 is converted to a
pure obligation.
Constructive fulfillment of resolutory condition.
Article 1186 applies also to an 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.
EXAMPLE: X obliges himself to allow Y to occupy the former’s
house in Manila as long as X is assigned by their company in
the province. When Y learned that X would be transferred to
Manila, he was able to induce the president of the company
to assign another person in place of X. The obligation of X is
extinguished because the fulfillment of the resolutory
condition was voluntarily prevented by Y. Hence, Y must
vacate the house.
Effect when the debtor voluntarily prevents fulfillment of
the condition
When the debtor voluntarily prevents the fulfillment of the
condition, the condition is deemed fulfilled. The obligation
therefore, is effective. This is called constructive or presumed
fulfillment.
Requisites of constructive fulfillment
a. The fulfillment is prevented by the debtor
b. The prevention is voluntary on the part of the debtor
c. Example: D obliges himself to sell his parcel of land
to C if C could pass the 2011 CPA Examination. By
means of threat or intimidation, D prevented C from
taking the examination. In here, even if C did not
pass the examination, D is obliged to sell his land
because he voluntarily prevented the fulfillment of
the condition. The logic of the law is that “one must
not profit by his own fault.”
Retroactivity, as to fruits and interest (1187)
ART. 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
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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.
Effect of fulfillment of suspensive condition
General Rule: The effect of the fulfillment of the suspensive
condition retroacts to the day of the constitution of the
obligation.
Exceptions: There shall be no retroactive effect with respect
to the fruits and interests as follows:
1. In reciprocal obligations, the fruits and interests shall
be deemed to have been mutually compensated, i.e.,
each party shall keep the fruits and interest received
by him prior to the fulfillment of the condition.
Example: On May 1, 2011, S agreed to sell his land to
B and B agreed to pay the price of P50,000 if X
finishes his Accounting degree on March 15, 2015. X
finished his Accounting degree stipulated. It was as if
S was entitled to the price and B to the land
beginning on May 1, 2011. However, S shall keep the
fruits on the land and B the interest on the price
during the pendency of the condition.
2. In unilateral obligations, the debtor keeps the fruits
and interests received before the fulfillment of the
condition
Example: On May 1, 2012, S promised to give B his
land if B passed the Bar Examination on February
2015. B passed the Bar Examination as stipulated. It
was as if B was entitled to the land beginning on May
1, 2012. However, S will keep the fruits on the land
during the pendency of the condition.
Retroactive effects as to the fruits and interest
a. If unilateral, the debtor as a rule will get the fruits
and interest
b. If reciprocal, the fruits and interest during the
pendency of the condition are deemed mutually
compensated although unequal.
Payment before the condition is fulfilled (1188)
ART. 1188. The creditor may, before the fulfi llment 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.
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1. Creditor – he may bring the appropriate actions for
the preservation of his right, such as registering his
claim with the Register of Deeds, if appropriate, to
notify all third persons, or asking the debtor to
provide a security if the debtor is about to become
insolvent.
2. Debtor – he may recover what he has paid by
mistake.
Effects of payment before the condition is fulfilled
a. Payment by mistake – the debtor may recover under
solution indebiti. In addition, he may claim the fruits
or legal interest if the creditor accepts payment in
bad faith.
b. Payment of the debtor with knowledge of the
condition – if the payment is made with knowledge
of the pendency of the condition, the condition is
deemed waived and the debtor can no longer
recover what has been paid.
Effect when the debtor voluntarily prevents fulfillment of
the condition
The condition is deemed fulfilled if the debtor voluntarily
prevents its fulfillment; hence, the obligation becomes
immediately demandable. Here, there must be an intent on
part of the debtor to prevent compliance with the condition
and actually prevents its fulfillment.
Example: D promised to give P10,000 to C, a marathon
athlete, if C finishes the race during the athlete meet.
However, on the eve of the scheduled race, D put a substance
on the drink of C who experienced weakening after taking the
drink, and hence, was not able to join the race. Here, D must
give P10,000 to C since the condition is deemed fulfilled.
When resolutory condition is fulfilled (1190)
ART. 1190. When the conditions have for their purpose the
extinguishment of an obligation to give, the parties upon the
fulfi llment 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.
a. The obligation is extinguished
b. The parties should return or restore to each other
what they have received including the fruits and
interest
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c. The rules in the preceding Article 1189 will apply to Rules on Loss
whoever has got a duty to return in case of loss,
deterioration or improvement of the thing a. Loss without debtor’s fault – obligation is
extinguished
d. If the obligation is to do or not to do, the courts are
given the power to determinate the retroactivity of b. Loss due to debtor’s fault – obligation is to pay
the fulfillment of the condition as stated in Article damages
1187
Rules on Deterioration
Rules on Loss, Deterioration, and Improvement (1189)
a. Without debtor’s fault – impairment shall be borne
ART. 1189. When the conditions have been imposed with the by the creditor, debtor is not liable
intention of suspending the effi cacy of an obligation to give,
the following rules shall be observed in case of the b. Due to debtor’s fault – creditor may choose between
improvement, loss or deterioration of the thing during the
pendency of the condition: 1. Rescission plus damages

(1) If the thing is lost without the fault of the debtor, the 2. Fulfillment plus damages
obligation shall be extinguished;
Rules on improvement of the thing:
(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 a. By nature or by time – it shall inure to the benefit of
lost when it perishes, or goes out of commerce, or disappears the creditor
in such a way that its existence is unknown or it cannot be
recovered; b. At the expense of the debtor – debtor’s right is that
granted to a usufructuary.
(3) When the thing deteriorates without the fault of the
debtor, the impairment is to be borne by the creditor; By contract of usufruct, a person has a right to enjoy
the use and the fruits of the thing belonging to
(4) If it deteriorates through the fault of the debtor, the another
creditor may choose between the rescission of the obligation
and its fulfi llment, with indemnity for damages in either case; Rules in case of loss, etc. of thing during pendency of
suspensive condition.
(5) If the thing is improved by its nature, or by time, the
improvement shall inure to the benefi t of the creditor; (1) Loss of thing without debtor’s fault. —

(6) If it is improved at the expense of the debtor, he shall have
no other right than that granted to the usufructuary.
Kinds of loss.
Loss in civil law may be:
(1) Physical loss. — when a thing perishes as when a house is
burned and reduced to ashes; or
(2) Legal loss. — when a thing goes out of commerce (e.g.,
when it is expropriated) or when a thing heretofore legal
becomes illegal (e.g., during the Japanese occupation,
American dollars had become impossible since their use was
forbidden by the belligerent occupant); or
EXAMPLE: D obliged himself to give C his car worth
P100,000.00 if C sells D’s property. The car was lost without
the fault of D. The obligation is extinguished and D is not
liable to C even if C sells the property. A person, as a general
rule, is not liable for a fortuitous event.
(2) Loss of thing through debtor’s fault. —
EXAMPLE: In the same example, if the loss occurred because
of the negligence of D, C will be entitled to demand damages,
i.e., P100,000 plus incidental damages, if any.
(3)Deterioration of thing without debtor’s fault. — A thing
deteriorates when its value is reduced or impaired with or
without the fault of the debtor.

(3) Civil loss. — when a thing disappears in such a way that its
existence is unknown (e.g., a particular dog has been missing
for sometime); or even if known, it cannot be recovered
whether as a matter of fact (e.g., a particular ring is dropped
from a ship at sea) or of law (e.g., a property is lost through
prescription).
EXAMPLE: If the car figured in an accident, as a result of which
its windshield was broken and some of its paints were
scratched away without the fault of D, thereby reducing its
value to P80,000.00, C will have to suffer the deterioration of
impairment in the amount of P20,000.00.
(4) Deterioration of thing through debtor’s fault. —

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EXAMPLE: In this case, C may choose between: (a) Rescission
(or cancellation) of the obligation with damages; in the case D
is liable to pay P100,000.00, value of the car before its
deterioration plus incidental damages, if any; or (b) Fulfi
llment of the obligation also with damages (see Art. 1191.); in
this case, D is bound to C to give the car and pay P20,000.00
plus incidental damages, if any.
(5) Improvement of thing by nature or by time. — A thing is
improved when its value is increased or enhanced by nature
or by time or at the expense of the debtor or creditor. (see
Art. 1187.)
EXAMPLE: Suppose the market value of the car increased,
who gets the benefit? The improvement shall inure to the
benefit of C. Inasmuch as C would suffer in case of
deterioration of the car through a fortuitous event, it is but
fair that he should be compensated in case of improvement of
the car instead.
(6) Improvement of thing at expense of debtor. —
EXAMPLE: During the pendency of the condition, D had the
car painted and its seat cover changed at his expense. In this
case, D will have the right granted to a usufructuary with
respect to improvements made on the thing held in
usufruct.6
Rescission in Reciprocal Obligations (1191)
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 fulfi llment and the rescission of the
obligation, with the payment of damages
This remedy in case of breach of obligation should not be
confused with rescission in Article 1281, et seq. Under the
former provision, a distinction existed between rescission and
resolution. 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.
Concept of rescission as used in this article
The power to rescind means the right to cancel or to resolve
the contract in case of non-fulfillment of the obligation on the
part of one of them.
This is not the rescission referred to in Article 1380, which
involves damage or lesion, or injury to the economic interest
of a person. The rescission contemplated by this article is the
breach of faith committed by the person who is supposed to
comply with the obligation.
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Essential Features
a. The right to rescind is implied, so there is no need to
stipulate it in the contract.
b. This right is not automatic or absolute. The injured
party should apply to the court for a decree of
rescission.
c. The court is given discretionary power to fix a period,
instead of rescinding the obligation especially if the
breach is slight or casual. Neither will rescission take
place if the object is in the possession of a third
person who acted in good faith.
Effect
If the contract is rescinded, the obligatory relations of the
parties are extinguished, as if no relation had ever been
created. The extinction is retroactive. The rescission is
equivalent to invalidating and unmaking the judicial tie,
leaving things in their own statues before the celebration of
the contract.
Breach of obligations by both parties (1192)
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 fi rst violated the contract, the same shall
be deemed extinguished, and each shall bear his own
damages.
The liability of the first infractor or violator must be equitably
tempered by the court because the other party is likewise
guilty of violating his obligation. Be it noted that their
corresponding obligations remain to subsist.
If it cannot be determined which of the parties first violated
the contract
The obligation of the parties is extinguished, and each shall
bear his own damages. The principle is “to each his own”
Where both parties guilty of breach
The above article contemplates two situations.
(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.18 Thus, where a bank failed to release
the entire approved loan (P80,000), but the borrower also
failed to pay the partial loan release (P17,000) he received
after it fell due, both are in default and their respective
liability for damages shall be offset equitably, exclusive of the
interest due on the overdue loan portion (P17,000) since the
borrower derived benefit for its use.
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(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 Classification of Conditions
that the contract shall be deemed extinguished and each shall Suspensive. — the happening
bear his own damages. This means that the contract shall not of which gives rise to the
be enforced. In effect, the court shall not provide remedy to obligation.
As to effect Resolutory. — the happening
either of the parties, who must suffer the damages allegedly of which extinguishes the
sustained by them. “The above rules are deemed just. The fi obligation.
rst one is fair to both parties because the second infractor
also derived, or thought he would derive, some advantage by Express. — the condition is
his own act or neglect. The second rule is likewise just clearly stated; and
because it is presumed that both at about the same time tried Implied. — the condition is
As to form
to reap some benefi t.” It has been held that when both merely inferred.
parties to a transaction are mutually negligent in the
performance of their obligations, the fault of one cancels the Possible. — the condition is
negligence of the other and their rights and obligations may capable of fulfi llment, legally
be determined equitably under the law proscribing unjust and physically; and
enrichment. Under Article 1192, “the liability of the fi rst
infractor shall be equitably tempered by the courts’’ but it is As to possibility.
Impossible. — the condition
for the courts, in the exercise of their sound discretion, to
is not capable of fulfi llment,
decide what is equitable under the circumstances.19 In other
legally or physically.
words, the mitigation of the damages to be awarded to the
second infractor is subject to the discretion of the court,
Potestative. — the condition
depending of what is equitable under the circumstances.
depends upon the will of one
of the contracting parties;

Casual. — the condition

depends upon chance or
upon the will of a third
As to cause or origin. person; and

Mixed. — the condition

depends partly upon chance
and partly upon the will of a
third person.

Positive. — the condition

consists in the performance
of an
As to mode.
Negative. — the condition
consists in the omission of an
act.

Conjunctive. — there are

several conditions and all
must be fulfi lled; and
As to number. Disjunctive. — there are
several conditions and only
one or some of them must be
fulfi lled.

Divisible. — the condition is

susceptible of partial
performance; and
As to divisibility.
Indivisible. — the condition is
not susceptible of partial
performance.
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