GLOBAL RECIPROCAL COLLEGES

COLLEGE OF ACCOUNTANCY
Law on Obligations and Contracts

DIFFERENT KINDS OF OBLIGATIONS

(ARTS. 1179 - 1192)
1. Pure and Conditional Obligations - Art. 1179 - 1192
2. Obligations with a Period - Art. 1193 - 1197
3. Alternative Obligations - Art. 1198 - 1206
4. Joint and Solidary Obligations - Art. 1207 - 1222
5. Divisible and Indivisible Obligations - Art. 1223 - 1225
6. Obligations with a Penal Clause - Art. 1226 - 1230

Pure obligation, defined - one which is not subject to any condition and no
specific date is mentioned for its fulfillment and is, therefore, immediately
demandable.
 I promise to give you P5,000.00.
 I promise to deliver a car to Mark.

Conditional obligation, defined - one whose consequences are subject in one way
or another to the fulfillment of an obligation.
 I will give you my car if you pass the CPA Examination.
 I will let you use my car until you pass the CPA Examination.

 Condition
A. Characteristics
i. Future and uncertain
ii. Not impossible
B. Classification
i. Suspensive condition - condition antecedent or condition precedent
a) The happening of which gives rise to the obligation.
b) The birth of the obligation takes place only if and when the
event that constitutes the condition happens or is fulfilled.
ii. Resolutory condition - condition subsequent
a) The happening of which extinguishes the obligation.
b) Obligation is demandable at once.

Suspensive Condition Resolutory Condition

Condition is fulfilled, obligation Condition is fulfilled, obligation is
arises. extinguished.

Does not take place, juridical tie is Does not take place, juridical tie is
absent. consolidated.

Mere hope Possibility of termination

1 | P a g e ObliCon05
Sheila Marie C. Caculitan, CPA, CTT
Faculty, College of Accountancy
 GLOBAL RECIPROCAL COLLEGES
COLLEGE OF ACCOUNTANCY
Law on Obligations and Contracts

iii. Potestative - a condition that depends upon the will of one of

the contracting parties.
Condition Debtor Creditor
Suspensive Void Valid
Resolutory Valid Valid

 Jerome promised to give Sachzna a bracelet if Jerome will study Accountancy.

 Jerome promised to give Sachzna a bracelet if Sachzna will study Accountancy.
 Jerome promised to allow Sachzna use his car until Jerome secures a license.
 Jerome promised to allow Sachzna use his car until Sachzna finishes her study.

iv. Casual - a condition that depends upon chance or upon the will of a
third person.
v. Mixed - a condition that depends partly upon the will of one of the
parties and partly upon chance or upon the will of a third person.
vi. Possible - one that is capable of fulfillment in its nature and by
law.
vii. Impossible - one that is not capable of fulfillment in its nature
or by operation of law.
a) Effects
Effect on obligation Rationale
Impossible conditional Void Impossible conditions
obligation - to do annual the obligation
which depends upon them.
Impossible conditional Valid Condition is disregarded.
obligation - not to do
Impossible conditional and Only the affected The part not affected by
divisible obligation - to obligation is void the impossible condition
do shall be valid.
Obligation is pre- Only the obligation is The obligation is pre-
existing, condition is void. existing, and therefore,
impossible does not depend upon the
impossible condition.

viii. Positive - a condition of which the happening of an event at a

determinate time will extinguish the obligation if:
a) The time expires without the event taking; or
b) The condition becomes indubitable that the event will not take
place although the time is not yet expired.

2 | P a g e ObliCon05
Sheila Marie C. Caculitan, CPA, CTT
Faculty, College of Accountancy
 GLOBAL RECIPROCAL COLLEGES
COLLEGE OF ACCOUNTANCY
Law on Obligations and Contracts
 Ali obliges himself to give Marco P150,000 if Marco will marry
Christine before he reaches the of 30.
ix. Negative - a condition that some event will not happen at a
determinate time will render the obligation effective if:
a) The time indicated has elapsed without the event taking place;
b) It has become evident that the event cannot occur
 Ali obliges himself to give Marco P150,000 if Marco will not
marry Christine before he reaches the of 30.

 Effects of fulfillment of suspensive condition

A. General rule - retroacts to the day of the constitution of the
obligation.
B. Exception - there shall be no retroactive effect with respect to the
fruits and interests if:
i. The obligation is reciprocal obligation - fruits and interests shall
be deemed to have been mutually compensated.
ii. The obligation is unilateral obligation - debtor keeps the fruits and
interest received during the pendency of the obligation.
Note: The rules are applicable only to obligation to give.

 Rights of the parties before fulfillment of the condition

A. Creditor - to bring appropriate actions for the preservation of his
right.
B. Debtor - to recover what he has paid by mistake.

 Effect when the debtor voluntarily prevents fulfillment of the condition

A. Requisites -
i. Condition is suspensive;
ii. Debtor or obligor actually prevents the fulfillment of the condition;
and
iii. The act is voluntary.
B. Effects - the condition is deemed fulfilled.

 Rules in case of loss, deterioration or improvement of determinate thing

before the fulfillment of the suspensive condition
A. Applicability
i. Real obligation;
ii. Object is specific or determinate; and
iii. Obligation is subject to suspensive condition.
B. Concept of Loss
i. Physical loss - when a thing perishes
ii. Legal loss - when a thing goes out of commerce
iii. Civil loss - when a thing disappears in such a way that its
existence is unknown, or even if unknown, it cannot be recovered.

3 | P a g e ObliCon05
Sheila Marie C. Caculitan, CPA, CTT
Faculty, College of Accountancy
 GLOBAL RECIPROCAL COLLEGES
COLLEGE OF ACCOUNTANCY
Law on Obligations and Contracts

C. Rules
Movement in the object
Loss of the thing
Deterioration of the thing
Improvement of the thing
Participation of Debtor Effect
W/o debtor’s fault Obligation is extinguished
W/ debtor’s fault Creditor is entitled for
damages
W/o debtor’s fault The impairment shall be
borne creditor
W/ debtor’s fault Creditor may choose:
1. Rescission plus
damages; or
2. Fulfillment plus
damages
None The benefit shall inure to
the benefit of the
creditor
At the expense of the The debtor is granted of
debtor rights of usufructuary1

1Usufructuary - the right to enjoy the use and fruits of a thing belonging to
another.
“The usufructuary may make on the property held in usufruct such useful
improvements or expenses for mere pleasure as he may deem proper provided he does
not alter its form or substance; but he shall have no right to be indemnified
therefor. He may, however, remove such improvements should it be possible to do
so without damage to the property”.

 Rules in case of fulfillment of resolutory conditions

1. The obligation is extinguished.
2. The parties shall return to each other what they have received.
3. Rules in case of loss, deterioration, or improvement - apply same rules
as with suspensive conditions.

4 | P a g e ObliCon05
Sheila Marie C. Caculitan, CPA, CTT
Faculty, College of Accountancy