Art. 1186.

The condition shall be

deemed fulfilled when the obligor
voluntarily prevents its fulfillment.
 (Doctrine of Constructive Fulfillment of Suspensive
Condition)

• Requisites:
– Voluntary – Obligor intends to
prevent obligee from complying with
the condition.
– Actually prevents- Obligor actually
prevents obligee from complying
with the condition
Example:
A promised B that she will give him a laptop if he passes the
BAR exam. On the day of the bar exam A poisoned B. B missed
some of the exams as a result and failed the bar exam.
- A is still bound to give B a laptop.
 Principle of Retroactivity in Suspensive Condition
• 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
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.
Once the condition is fulfilled, the effects of the
condition shall retroact to the day of the constitution
of the obligation and not on the date when the
condition was fulfilled.

Example: On Jan. 1, 2016, Arja agreed to give Avi a

house and lot if she passes the Novemeber 2016 Bar
Exam. If Avi passes the Exam, she is entitled to the
house and lot effective Jan 1, 2016, because Avi’s
right over the land retroacts to the date when the
obligation was constituted.
As to the fruits and interest- the effect of conditional
obligation to give, as a rule, do not retroact to the date of
the constitution of the obligation. The following rule shall
govern:
• In reciprocal obligation (like contract of sale) – the fruits
and interest during the pendency of the condition shall
be deemed to have been mutually compensated.
• Example: May agrees to sell and Ann agrees to buy May’s
lot if Ann passes the November 2016 Bar exams. If Ann
passes the Bar, the obligation becomes demandable. Ann
is entitled to all the interests that her money (with which
to pay May) may earn while May is entitled to the fruits
which the parcel of land may have produced during the
pendency of the condition.
In unilateral obligation- the debtor shall appropriate
the fruits and interests received during the
pendency of the condition unless a contrary
intention appears.
Example: J promised to give A land if A passes the
May 2019 CPA exams. Pending the happening of
the condition, J is entitled to the fruits which the
land may produce, J will deliver only the land if
the condition is fulfilled, unless contrary intention
appears.
 Creditor’s right before the fulfillment of the condition

• 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.
 Par 1 authorizes the creditor to take any appropriate actions for the
preservation of creditor’s right during the pendency of the condition.

• Example: On Jan 1, 2015, John obliged himself

to sell a parcel of land to Tony if he passes the
Board exams in December 2015. From the
time the obligation was constituted and
pending the happening of the condition, Tony
may cause the annotation of the condition in
the certificate of title in the Register of Deeds
where the land is located, to preserve his right
over the parcel of land.
Par 2 in order that debtor may recover what he has paid by mistake,
during the pendency of the condition, the following requisites my be
present:

• 1. The debtor paid the creditor before the fulfillment of

the condition.
• 2. Payment made by the debtor was through mistake and
error.
• (N.B the action to recover what was paid by mistake should be made before
the fulfillment of the condition.)

• Example: P obliged himself to pay S P20,000 if PAL plane crashes at

Cebu before Dec 30, 2016. After the obligation was constituted and
before December 30,2016, a plane crashed in Cebu, P honestly and
believing that the condition was fulfilled paid the P20K to S. It
turned out however, that it was a Cebu airline that crashed. Thus P
may recover the amount paid to S by mistake for the reason that the
condition has not yet been fulfilled.
• Art. 1189. When the conditions have been imposed with the intention of
suspending the efficacy 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.
•
• Q: What are the requisites for Art.1189 to apply?
• A:
• 1. Must be a real obligation;
• 2. Object is a specific/determinate thing;
• 3. 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 of the
condition.
 When the thing is lost.
• In case of loss of the thing without the fault of
the debtor, the obligation shall be extinguished.
If the thing is lost through the fault of the debtor,
he shall obliged to pay damages.
• Example: J obliged himself to give L a specific car if he
passes the May 2018 board exam. If during the pendency
of the condition the car was lost trough fortuitous event
without the fault of J, the obligation to deliver the car is
extinguished even if the condition is fulfilled later.
when the thing deteriorates
• when the thing deteriorates during the
pendency of the condition without the fault of
the debtor, the impairment is to be borne by
the creditor.
• A. (Please refer to example above) during the
pendency of the condition the car was partially
damaged by flood, without the fault on the part of J.
If the condition is fulfilled, L will bear the impairment.
• Ex. B. if the thing deteriorates during the
pendency of the condition, through the fault of
the debtor, the creditor may choose, after the
fulfillment of the condition between the
rescission of the obligation or its fulfillment,
with indemnity for damages in either case.
 When the thing is improved
• If the thing improved during the pendency of the
condition, by its nature, or by time, the
improvement shall inure to the benefit of the
creditor. The reason for this is to compensate the
creditor who would suffer in case, instead of
improvement, there would be deterioration
without the fault of the debtor.
• If the thing is improved at the expense of the
debtor, he have no other right than that granted
to the usufructuary.
• Effects of Loss, Deterioration and Improvement in
Real Obligations (During the Pendency of the
Condition)
• Loss
• Without debtor’s fault—obligation is extinguished
• With debtor’s fault—debtor pays damages.
• Applies only to determinate thing. A thing is loss when
it:
– Perishes
– Goes out of commerce of men
– Disappears in such a way that its existence is unknown or it
cannot be recovered.
 Q: Distinguish Act of God from Act of Man

• A:
• ACT OF GOD ACT OF MAN
• Fortuitous event Force majeure
• Event which is absolutely independent Event caused by the legitimate or
illegitimate of human intervention
• acts of persons other than the obligor
• i.e. – earthquakes, i.e. – armed invasion,
• storms, floods, robbery, war
• epidemics
• Q: Is the statement of a debtor that he will
pay when his means permit him to do so
relate to a period or a condition? Is such a
statement valid considering that the same is
left to the will of the debtor?
• A: When the debtor binds himself to pay
when his means permit him to do so, the
obligation is deemed with a period or term.
This is valid because it is not the payment
itself that is dependent upon the will of the
debtor, but the moment of payment.
Effects when resolutory condition is
fulfilled.
• 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 the 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.
 Efffects:
• The obligation is extinguished.
• Parties should restore to each other what they
have received.
• The fruits and interests should also be
returned after deduction the expenses made
for the production, gathering and preservation
• The courts are given power to determine the
retroactivity of the fulfillment of a resolutory
conditions.
• Example: A gave B a parcel of land on condition
that B will pass the BAR exams on November 2017. B
did not pass the exams. The obligation is
extinguished and therefore it is as if there was never
an obligation at all. B therefore have to return both
the land and the fruits he had received from the
moment A has given him the land.
• 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.
• The power to rescind is given to the injured party
and the injured party has the following
alternative remedies:
• 1. Demand fulfillment of the obligation plus
damages; or
• 2. demand rescission of the obligation plus
damages.
• Example: In a contract of sale, the buyer can rescind if
the seller does not deliver or the seller can rescind if the
buyer does not pay.
• 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 first violated the contract, the same shall
be deemed extinguished, and each shall bear his
own damages.
• (If known – the liability of the first infractor should be equitably reduced.
• If cannot be determined – the court shall declare the extinguishment of the
obligation and each shall bear his own damages.)
 Obligations with a period
• Art. 1193. Obligations for whose fulfillment a day
certain has been fixed, shall be demandable only
when that day comes.
• Obligations with a resolutory period take effect at
once, but terminate upon arrival of the day certain.
• A day certain is understood to be that which must
necessarily come, although it may not be known
when.
• If the uncertainty consists in whether the day will
come or not, the obligation is conditional, and it shall
be regulated by the rules of the preceding Section.
 Obligations with a Period.
• Those whose demandability or extinguishment is subject to the expiration
of a term or period.
• Requisites:
– Future
– Certain
– Possible, legally and physically.

• Classification of Term or Period:

• Suspensive (Ex die)—obligation becomes demandable only
upon arrival of a day certain.
• Resolutory (In Diem)—arrival of day certain terminates the
obligation;
• Legal—granted by law.
• Conventional—stipulated by parties.
• Judicial—fixed by courts.
• Definite—date/time is known beforehand.
• Indefinite—the date/time of day certain is unknown.
• Q: Is the statement of a debtor that he will
pay when his means permit him to do so
relate to a period or a condition? Is such a
statement valid considering that the same is
left to the will of the debtor?
• A: When the debtor binds himself to pay
when his means permit him to do so, the
obligation is deemed with a period or term.
This is valid because it is not the payment
itself that is dependent upon the will of the
debtor, but the moment of payment.
 When obligation is demandable?
A. Obligation with suspensive period –
obligation with a suspensive period shall be
demandable only when the period comes.
• Example: I will give you a car on Dec. 10, 2019. The car is
demandable on December 10, 2019.
B. Obligation with resolutory period – is demandable
at once, but will terminate upon arrival of the
period.
Ex. I will give you a car until March 20, 2019. Demandable at once but will
terminate on March 20, 2019.
 Q: When may the court fix the
period?
• A:
• 1. If the obligation does not fix a period,
• but from its nature and circumstances it
• can be inferred that a period was
• intended by the parties
• 2. If the duration of the period depends
• upon the will of the DR
• 3. In case of reciprocal obligations, when
• there is a just cause for fixing the period
• 4. If the DR binds himself when his means
• permit him to do so
 Art. 1194. In case of loss, deterioration or
improvement of the thing before the arrival of the day
certain, the rules in Article 1189 shall be observed.
• Art. 1195. Anything paid or delivered before
the arrival of the period, the obligor being
unaware of the period or believing that the
obligation has become due and demandable,
may be recovered, with the fruits and
interests.
• Art. 1195 applies only in the obligation to give.
It has no application to do or not to do. It is
similar to the recovery of what has been paid
by mistake before the fulfillment of a
suspensive condition. (The creditor cannot
unjustly enrich himself by retaining the thing
or money received before the arrival of the
period.
 (Principle of Solutio Indebiti)
• Example: X owes Y P20K which is supposed to
be paid on February 20, 2020. By mistake, x
paid his obligation on February this year.
Question: Assuming that today is September 20,
can X recover the P20K plus interest (6% legal
rate per annum)?
Answer: Yes, under 1195.
Question:
What are the things to be proved in order for the
debtor to recover or demand for the payment
which is premature?
• Answer:
the debtor must have to prove his ignorance
of the period. He must not aware of the due
date of the agreed payment of the debt.
(burden of proof)
• Art. 1196. Whenever in an obligation a period
is designated, it is presumed to have been
established for the benefit of both the
creditor and the debtor, unless from the
tenor of the same or other circumstances it
should appear that the period has been
established in favor of one or of the other
• General rule: When a period is designated for
the performance or fulfilment of an
obligation, it is presumed to have been
established for the benefit of both creditor
and debtor.
• Exception: When it appears from the tenor of
the obligation or other circumstances that the
period has been established in favor of one or
of the other.
 General Rule
• Example:
On January 1, D borrowed from C P10K payable on
December 31 at 12% interest. D cannot pay
before December 31, without the consent of C.
Neither can C compel D to pay before the
expiration of the term.
Question:
Who are benefited?
• Answer: Both
• - D is benefited because he can use the money
for one year.
• - C is also benefited because of the interest
the money would earn for one year.
 Exception to the G.R:
• Example:
• 1. D borrowed from C P1K to be paid within
one year without interest.
• 2. D promised to pay his debt on or before
December 31, 2019.
• Term is for the benefit of the debtor alone- he
cannot compelled to pay prematurely, but he
can, if he desires to do so.
 Judicial period – fixed by the court
Contractual period – fixed by the parties

• Art. 1197. If the obligation does not fix a period, but

from its nature and the circumstances it can be
inferred that a period was intended, the courts may
fix the duration thereof.
• The courts shall also fix the duration of the period
when it depends upon the will of the debtor.
• In every case, the courts shall determine such period
as may under the circumstances have been probably
contemplated by the parties. Once fixed by the
courts, the period cannot be changed by them.
 When Court May Fix Period.

• If the obligation does not fix a period, but

from its nature and circumstances it can be
inferred that a period was intended by the
parties;
• If the duration of the period depends upon
the will of the debtor;
• If the debtor binds himself when his means
permit him to do so (Art. 1180).
Reason for Fixing Period (Art. 1197

• There can be no possibility of any breach of

contract or failure to perform the obligation
unless the period is fixed by the courts.
• To prevent the possibility that the obligation
may never be fulfilled or cure the defect in a
contract.
• Art. 1198. The debtor shall lose every right to make use of the period:
The courts shall also fix the duration of the period when it depends upon
the will of the debtor.
• In every case, the courts shall determine such period as may under the
circumstances have been probably contemplated by the parties. Once
fixed by the courts, the period cannot be changed by them
• (1) When after the obligation has been contracted, he becomes
insolvent, unless he gives a guaranty or security for the debt;
• (2) When he does not furnish to the creditor the guaranties or securities
which he has promised;
• (3) When by his own acts he has impaired said guaranties or securities
after their establishment, and when through a fortuitous event they
disappear, unless he immediately gives new ones equally satisfactory;
• (4) When the debtor violates any undertaking, in consideration of which
the creditor agreed to the period;
• (5) When the debtor attempts to abscond.
When debtor loses right to make use of period:

• When after the obligation has been contracted, he

becomes insolvent.
• When he does not furnish to the creditor the
guaranties or securities he promised;
• When by his own act he has impaired said guaranties
or securities after their establishment, and when
through fortuitous event they disappear, unless he
gives new ones equally satisfactory when debtor
violates any undertaking, in consideration of which the
creditor agreed to the period; or
• When debtor attempts to abscond.