CHAPTER THREE Characteristics:
DIFFERENT KINDS OF OBLIGATIONS
Sec. 1. - Pure and Conditional Obligations
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.
Pure Obligation- one whose effectivity or
extinguishment does not depend upon the
fulfillment or non-fulfillment of a condition or upon
the expiration of a term or period.
Elements:
a.) Not subject to a condition
b.) Not subject to a term
 Characterized by the quality of immediate
demandability, but there must be a
reasonable period of grace.
 *Immediate demandability: It does not mean
outright but speaks of a reasonable time;
depends on the nature and complexity of the
obligation.
 Simple Obligation does not equal to pure
Obligation. Former speaks of an obligation
with only one prestation, while the latter
speaks of an obligation that does not depend
on a condition or period.
Obligations that are immediately demandable:
1. Pure obligations (Art 1179)
2. Obligations with resolutory condition
(Art. 1179, par.2)
3. Obligations with resolutory period (Art.
1193, par.2)
4. Obligations with a condition not to do an
impossible thing (Art. 1183, par.2)
2 Types of Events:
1. Condition – a future and uncertain event upon
which the acquisition and resolution of rights is
made to depend by those who execute the juridical
act
 Future
 Uncertain – may or may not happen.
 Possibility
2. Term/Period – an interval of time, which exerting
an influence onan influence on an obligation as a
consequence of a juridical act, either suspends its
demandability or produces its extinguishment.
Characteristics:
 Future
 Certain although not known when it will
happen
 Suspensive Condition and Term –
Happening of which will arise to acquisition
of rights
 Resolutory Condition and Term –
Happening of which will result to the
extinguishment of an obligation
Conditional Obligation - one whose effectivity is
subordinated to the fulfillment or non-fulfillment of
a future and uncertain act or event.
Is a past event unknown to the parties be
considered as a condition?
According to Sir Ulan, quoting Tolentino,
a past event cannot be “future and uncertain”,
which are the elements of a condition, and thus
cannot be one. What can be a condition is the
future knowledge or proof of a past event
unknown to the parties, but NOT the event itself.
Thus, the contract or obligation arises, not when
the event happened or the fact came into
existence, which would be in the past, but when
the proof of such fact or event is presented,
which would be in the future.
Example: I will give you P50,000 if you could
prove that Rizal returned to the Catholic Church
before he died.
Classification of Conditions:
1. Suspensive or Resolutory
 Suspensive – when the fulfillment of the
condition results in the acquisition of rights
arising out of the obligations.
 Resolutory – when the fulfillment of the
condition results in the extinguishment of
rights arising out of the obligation.

2. Potestative, Casual, or Mixed
 Potestative – when the fulfillment of the
condition depends upon the will of a party to
the obligation.
 Casual – when the fulfillment of the
condition depends upon chance and/or upon
the will of a third person
 Mixed – when the fulfillment of the
condition depends partly upon the will of a
party to the obligation and partly upon
chance and/or will of a third person
3. Possible or Impossible
 Possible – when the condition is capable of
realization according to nature, law, public
policy or good customs
 Impossible – when the condition is not
capable of realization according to nature,
law, public policy or good customs
4. Positive or Negative
 Positive – when the condition involves the
performance of an act
 Negative – when the condition involves the
omission of an act.
5. Divisible or Indivisible
 Divisible – when the condition is susceptible
of partial realization
 Indivisible – when the condition is not
susceptible of partial realization
6. Conjunctive or Alternative
 Conjunctive – when there are several
conditions, all of which must be realized
 Alternative – when there are several
conditions, but only one must be realized
7. Express or Implied
 Express – when the condition is stated
expressly
 Implied – when the condition is tacit
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.
 Should the debtor bind himself to pay when
his means permit him to do so, the
obligation is one with a period and not
subject to a condition
 Since the duration of the period is left to the
discretion of the debtor, it is subject to 1197
or where the courts shall fix the duration of
the period by which he shall pay the
obligation. Thus in cases falling under this
article, creditor should file an action to fix a
period for the payment of the obligation.
Indications of a term or period:
When the debtor binds himself to
pay – • when his means permit
him to do so
 little by little
 as soon as possible
 from time to time
 as soon as I have the money
 in partial payment
 when in the position to pay
Art. 1181. In 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.
Art. 1182 When the fulfillment of the
condition depends upon the sole will of the
debtor, the conditional obligation 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.
2 kinds of Potestative:
• simple potestative condition – presupposes
not only a manifestation of will but also
the realization of an external act
e.g. “if you sell your house”; “If I go to Madrid, I
promise to sell you my house”.
• purely potestative condition1 – depends solely
and exclusively upon the will
e.g. “if I like it” or “if I deem it proper”; “I promise
to sell you my house on such date if I deem it
convenient.”
1

Note:
Simple potestative condition approaches very well
the nature of a mixed condition. (Caguioa) Hence, it
is valid. Purely or strict potestative condition on the
other hand destroys the efficacy of the legal tie.
Note that it is only when the potestative condition
depends exclusively upon the will of the debtor that
the conditional obligation is void. (Tolentino)
 Simple potestative – valid;
 Purely potestative (creditor)– valid; purely
potestative (debtor) - void
a) Potestative on the part of the Creditor
- if the fulfillment of the condition is dependent
upon the sole will of the creditor the obligation is
VALID
Example: I will give you a car on the condition that
you go to Baguio on or before Dec 10, 1965.
b) Potestative on the part of the Debtor
i) Suspensive condition:
- If a suspensive condition is solely dependent
upon the will of the debtor, the obligation is VOID.
Example: I’ll give you a diamond ring if I go to
Tokyo this year.
ii) Resolutory condition:
-A condition which is both potestative and
resolutory is VALID, even though the fulfillment
of the condition is dependent upon the will of the
debtor
Example: I’ll give you a car until I return from
Baguio.
Art. 1183. Impossible conditions, those
contrary to good customs or public policy and
those prohibited by law shall annul the
obligation which depends upon them. If the
obligation is divisible, that part thereof which
is not affected by the impossible or unlawful
condition shall be valid.
The condition not to do an impossible
thing shall be considered as not having been
agreed upon.
Possible conditions – those which are valid
and allowed by law; proper conditions.
Impossible conditions – contrary to good
customs or public policy or prohibited by law.
2 kinds:
1. Physically impossible – when the realization of
the event constituting the condition is incompatible
with or contrary to nature. 2. Juridically impossible
– when contrary to law, morals, good customs, and
public policy.
 Illicit conditions – those which tend to
restrain or fetter the exerciseof those rights
or powers arising from the natural or civil
liberties of man
 Immoral conditions – those which tend to
compel a person toexecute an act contrary to
good customs.
Note: In the case of illicit and immoral conditions,
the illicit act provided for in the contract must refer
to that of one of the parties but not where the illicit
act is the act of a third person. The illicit character
of the act is not determined by the act or fact in
itself, but by its effects upon one of the parties.
Applicability:
The article applies only to contracts. It has no
application to gratuitous obligation (simple and
remuneratory donations and testamentary
dispositions).
Effects:
1. Impossible condition on obligation to give/to do
(positive & suspensive)
 obligation is annulled
Example: I’ll give you P40,000 if you go to the
moon this year.
2. Impossible condition on obligation not to do
 obligation is void (deemed not having been
agreed upon); hence obligation remains
valid & subsequent => becomes pure and
simple
Example: D obliged himself to give C P40,000 if C
does not go to the moon this year.
Impossible condition imposed on gratuitous
obligation:
 condition is deemed not imposed; hence
obligation is valid and becomes pure and
simple
Requisites for the nullity of an obligation with
impossible conditions:
1. Conditions are positive and suspensive
2. Obligation is a contract
3. Impossibility exists at the time of the
creation of the obligation
Art. 1184. The condition that some event happen
at a determinate time shall extinguish the
obligation as soon as the time expires or if it has
become indubitable that the event will not take
place.
Art. 1185. The condition that some event will
not happen at a
determinate time shall render the obligation
effective from the moment the time indicated
has elapsed, or if it has become evident that
the event cannot occur.
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 of the obligation.
Positive conditions – those that depend on the
fulfillment of an event.
Negative conditions – those which depend on the
non-happening of an event.
- If the condition is positive (that an event should
occur within a determinate period, the obligation
is extinguished from the moment the period
lapses or it has become indubitable that the event
will not take place.
Example: I’ll give you a car if you marry X on or
before Dec 10, 1992. My obligation to give the
car is extinguished if on Dec 11, 1992 X is still
single or if before Dec 10, 1992 X dies, because
by then it is evident that you can no longer marry
X.
 If the condition is negative (that some
event would not happen within a
determinate time), the obligation becomes
effective from the moment the period
lapses, or if it has become evident that the
event cannot occur.
Example: I’ll give you my car if you do not
marry X on or before Dec 10, 1992. If on Dec 11,
1992 you have not married X, you can demand
delivery of the car. If X dies before Dec 11, 1992
you can, on the death of X demand delivery of
the car without waiting for Dec 11, 1992,
because it is evident that you can no longer
marry X.
Art. 1186. The condition shall be deemed fulfilled
when the obligor voluntarily prevents its
fulfillment.
Constructive Fulfillment of Conditions
If the debtor prevents the creditor from fulfilling
the condition of the obligation, the condition is
deemed fulfilled and the obligation demandable.
It is essential that the obligor must have actually
prevented the obligee from complying and that it
must have been voluntary and willful.
Requisites:
1. Condition is suspensive
2. Debtor actually prevents the fulfillment of the
condition
3. He acts voluntary/intention
Example: Dean Ulan will give Anjo P50,000 if
Dean Ulan and Dean Jara will run around the
campus. If only Dean Jara only ran, Art 1186 will
apply UNLESS if it was not Dean Ulan’s
intention and fault not to run.
 Underlying principle: A party to a contract
may not be excused from performing his
promise by the non-occurrence of an event
which he himself prevented.
Exception:
  If in preventing the fulfillment of the
condition the debtor acts pursuant to a right,
the condition will NOT be deemed fulfilled.
Applicable to:
 Suspensive and potestative (creditor)
 Suspensive and casual
 Suspensive and mixed
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 obligation imposes reciprocal
prestations upon the parties, the fruits and
interests during the pendency of the
condition shall be deemed to have been
mutually recompensated. 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.
Retroactive effects of fulfillment of
suspensive condition
1. In obligations to give - An obligation to give
subject to a suspensive condition becomes
demandable only upon the fulfillment of the
condition. However, once the condition is
fulfilled, its effects shall retroact to the day
when the obligation was constituted.
When is an obligation constituted?
When the essential elements which give rise thereto
concur. Condition is not an essential element; it is
only an accidental element of the obligation.
The reason is because the condition is only
accidental element of a contract. An obligation
can exist without being subject to a condition.
Consequently, once the event which constitutes
the condition is fulfilled thus resulting in the
effectivity of the obligation, its effects must
logically retroact to the moment when the
essential elements which gave birth to the
obligation have taken place and not to the
moment when the accidental element was
fulfilled. *Note:applicable only to consensual
contracts (perfected upon meeting of the
minds) and not to real contracts(perfected by
delivery)
2. In obligations to do or not to do - No
definite rule. 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. 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 take effect.
Retroactive effects as to fruits and interests in
obligations to give
1. In reciprocal obligations - No retroactivity
since the fruits and interests are deemed to have
been mutually compensated.
Example: On Jan 10, 1992 D obliged himself to
give C a certain ricefield and C agreed to give D
a certain fishpond provided X passes the CPA
examinations. If X passes the CPA exam on Aug
10, 1992, C is obliged to deliver the fishpond to
D and D is obliged to deliver the ricefield to C.
However D is not obliged to deliver the fruit of
the ricefield to C. Neither is C required to give
the fruits of the fishpond to D.
2. In unilateral obligations - There is usually no
retroactive effect because they are gratuitous. The
debtor receives nothing from the creditor. Thus,
fruits and interests belong to the debtor unless
from the nature and other circumstances of the
obligation it should be inferred that the intention
of the person constituting the same was different.
Example: On Jan 10, 1992 D obliged himself to
give C a certain ricefield provided C passes the CPA
exams. If on Aug 10, 1992 C passes the CPA exams,
D obliged to deliver the ricefield to C but not the
fruits received from Jan. 10, 1992
Exceptions to the rule of retroactivity:
1. Real contracts
2. Successive contracts (those contracts
whose fulfillment is realized within a
period of time; e.g. contract of lease,
contract of labor, life annuities)
Reason for retroactivity: The condition is only
accidental, not essential element of the obligation.
Art. 1188, par. 1- Protection for the creditor
 file an injunction to stop the debtor
 does not necessarily always involves court
action in spite the wordings of the law.
i.e. registration

Limitation of Retroactivity Effect:

 If thing is lost through fortuitous event,

debtor suffers the loss because he is still
the rightful owner. (basis: Art. 1164 --
ownership or personal right is only vested
upon delivery)
Art. 1188, par. 2- protection for the debtor
Obligation subject to Obligation subject to
Art.1188. The creditor may, before the suspensive condition period/term
fulfillment of the condition, bring the
appropriate actions for the preservation of his There is no certainty if It is certain that the
the obligation will be obligation will be fully
right.
fulfilled demandable and
The debtor may recover what during the
enforceable.
same time he has paid by mistake in case of a
suspensive condition. Interests and fruits shall Interests and fruits shall
also be delivered when also be delivered when
Rights pending fulfillment of suspensive the debtor the debtor
condition paid/delivered by paid/delivered by
1. Rights of creditor - He may take or bring mistake. mistake.
appropriate actions for the preservation of his
right, as the debtor may render nugatory the
obligation upon the happening of the condition.
 Action for prohibition restraining the
alienation of the thing pending the
happening of the suspensive condition;
 Action to demand security if the debtor has Art. 1189. When the conditions have been
become insolvent; imposed with the intention of suspending the
 Action to set aside alienations made by the efficacy of an obligation improvement, loss or
debtor in fraud of creditors; deterioration of the thing during the pendency of
the condition:
 Actions against adeverse possessors to
(1) If the thing is lost without the fault of the
interrupt the running prescriptive period;
To have the rights annotated in the registry. debtor, the obligation shall be
extinguished;
2. Rights of the debtor - He is entitled to recover (2) If the thing is lost through the fault of the
what he has paid by “mistake” prior to the debtor, he shall be obliged to pay
happening of the suspensive condition. 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 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 the thing is improved at the expense of
the debtor, he shall have no right that that
granted to the usufructuary.
Requisites:
(1) The obligation is a real obligation (to give);
(2) The object is a specific or determinate thing;
(3) The obligation is subject to a suspensive
condition (resolutory is also applicable
accdg to ULAN)
(4) The condition is fulfilled; and
(5) There is loss, deterioration, or improvement
of the thing during the pendency of the
condition
Application: The loss, deterioration or
improvement should take place after the obligation
is perfected and before the condition is fulfilled.
LOSSES
When is a thing lost?
a) When it perishes
b) When it goes out of commerce
c) When it disappears in such a way that its
existence is unknown orit cannot be
recovered.
Loss without debtor’s fault
- The debtor’s obligation is extinguished if the
thing is lost without his fault
Loss due to debtor’s fault
- The debtor’s is obliged to pay damages if the
thing is lost due to his fault
DETERIORATION
What is deterioration?
A thing deteriorates when its value is reduced or
impaired without the fault of the debtor
Without debtor’s fault
- Impairment to be borne by the creditor
With debtor’s fault
- Obligation is converted into one of
indemnity for damages
The creditor can choose between:
a) Rescission plus damages, or
b) Fulfillment of the obligation plus damages
IMPROVEMENT
What is improvement?
- A thing is improved when its value is increased or
enhanced by nature or by time
a) By nature or by time
- shall inure to the benefit of the creditor
b) At the debtor’s expense
- debtor shall have no other right than that granted
to a usurfructory
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 Resolutory Obligation BEFORE
fulfillment
 Obligor/debtor has hope or expectancy
during the pendency of the condition
 If resolutory condition happens, debtor will
reacquire whatever he may have paid or
delivered to the
obligee/creditor
Example: I’ll give you a car until you should pass
the CPA exams.
Effect of Resolutory Obligation AFTER
fulfillment
 If resolutory condition is not fulfilled, such
rights are consolidated – absolute
Retroactivity of Effect
 Effect of signifying the non-existence of the
obligation and what is non-existent must not
give rise to any effect whatsoever
 Return to each other what they have
received
 Right to demand reimbursement for all
expenses which he may have incurred in the
production, gathering, and preservation of
the said fruits.
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.
Reciprocal Obligations
- are 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
Effect: When an obligation has been rescinded or
resolved, it is the duty of the court to require the
parties to surrender whatever may have received
from the other; in other words, the parties must be
placed as far as practicable in their original
situation.
Tacit Resolutory Condition (Par.1)
Principle: If one of the parties fails to comply with
what is imcumbent upon him, there is a right on the
part of the other to rescind or “resolve” the
obligation.
Remedies:
1) Action for specific performance
(fulfillment) of the obligation with damages;
or
2) Action for rescission of the obligation also
with damages. *Should be invoked
judicially (par 3) except when stipulated in
the contract
Limitations on right to demand rescission:
1) Resort to the courts- The injured party has
to resort to the courts to assert his rights
judicially
2) Power of court to fix period- The court has
discretionary power to allow a period within
which a person in default may be permitted
to perform his obligation if there is a just
cause for giving time to the debtor, as where
the default incurred was not willful or could
be excused in view of the surrounding
circumstances.
3) Right of third person (par 4)- If the thing
subject matter of the obligation is in the
hands of a third person who acted in good
faith, rescission is not available as a remedy
4) Substantial violation- The general rule is
that rescission will not be granted for slight
breaches of contract; the violation should be
substantial as to defeat the object of the
parties in making the agreement.
5) Waiver of right- The right to rescind may be
waived, expressly or impliedly.
*Note: Where the contract itself contains
stipulations regarding automatic rescission
without judicial interbention upon violation of
the terms of the contract, the right to rescind is
not implied but expressly stated then judicial
permission to cancel or rescind the contract is no
longer necessary. The injured party should give
notice to the other party of the rescission and his
chosen remedy.
Art. 1192. In case both the 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 first violated
the contract, the same shall be deemed
extinguished, and each shall bear his own
damages.

Rules:

1. the liability of the first infractor shall be

equitably tempered by thecourts.
 fair to both parties because the second
infractor also derived, or thought he would
derive, some advantage for his own act or
neglect

2. If it cannot be determined which of the parties

first violated thecontract, the same shall be
deemed extinguished, and each shall bear his own
damages
 it is presumed that both at about the same
time tried to reap some benefit

Term/Period
Interval of time which is future requisites
and certain
Interval of time that must
necessarily come, although it fulfillment
may not be known when
Merely exerts an influence upon Influence on
the time of the demandability or obligation
extinguishment of an obligation.
No retroactive effects unless Retroactive
there is an agreement to the effects
contrary.
When a term or a period is left
exclusively to the will of the Effect of will of
debtor, the existence of the the debtor
obligation is not affected
(potestative term or period)