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CHAPTER 3: DIFFERENT KINDS OF OBLIGATIONS Past event unknown to the parties

Sec. 1. - Pure and Conditional Obligations What is really contemplated by the law is the
knowledge to be acquired in the future of a past event
ART. 1179. EVERY OBLIGATION WHOSE PERFORMANCE which at the moment is unknown to the parties
DOES NOT DEPEND UPON A FUTURE OR UNCERTAIN interested, for it is only in that sense that the event can
EVENT, OR UPON A PAST EVENT UNKNOWN TO THE be deemed uncertain. This knowledge determines
PARTIES, IS DEMANDABLE AT ONCE. whether the obligation will arise or not.
Example:
EVERY OBLIGATION WHICH CONTAINS A RESOLUTORY Sean is the owner of a parcel of land which is
CONDITION SHALL ALSO BE DEMANDABLE, WITHOUT being claimed by X. Last week, the Supreme Court has
PREJUDICE TO THE EFFECTS OF THE HAPPENING OF rendered a final decision upholding the right of Sean.
THE EVENT. However, Sean has not yet received the notice that he
had won the case. Now, Sean obliged himself to sell the
Pure Obligation- one whose effectivity or land to B for a definite price, should he win the case
extinguishment does not depend upon the fulfillment against X.
or non-fulfillment of a condition or upon the expiration Under the facts, Sean would be bound to sell
of a term or period. the land to B upon receipt of the notice that he had won
the case against X.
Elements of a Pure Obligation:
a) Not subject to a condition Explanation: Now there are actually two principal kinds
b) Not subject to a term/period of Condition pabalik balik tayo dito mamaya so dapat i-
 Characterized by the quality of immediate master na since almost all articles is involved ito.
demandability, but there must be a reasonable Suspensive or Resolutory.
period of grace.
Two Principal Kinds of Condition
Example:
 Pogi promise to deliver his specific to Ganda Suspensive condition
 Ganda promise to give pogi 10,000 on demand. • (Condition precedent/antecedent)
• Fulfillment of the condition will give rise to an
Conditional Obligation obligation.
 one whose consequences are subject in one • Demandability of the obligation is suspended
way or another to the fulfillment of a condition. until the happening of a future and uncertain
 Effectivity is subject to the fulfillment of a event which constitutes the condition
condition. • The birth, perfection or effectivity of the
contract subject to a condition can take place
Example: only if and when the condition happens or is
Pogi promises to give a car to Ganda if she passes the fulfilled.
board exam. • If the suspensive condition does not take place,
the parties would stand as if the conditional
Condition - a future and uncertain event, upon the obligation had never existed.
happening of which, the effectivity or extinguishment of • There can be no rescission of an obligation that
an obligation (or rights) subject to it depends. is still non-existent, the suspensive condition
not having been fulfilled

Explanation: So may few requisites, futurity and Explanation:


uncertainty, diba kung saan nakadepende yung birth or Kapag suspensive ito yung parang sinususpend ang
yung death ng obligation. Take note that a condition effectivity ng obligation hanggang sa mangyari or
may also refer to a past event unknown to the parties. maganap yung condition dun na rin yung pagkakaroon
In future event dapat UNCERTAIN yung happening niya ng bisa or effectivity ng obligation. No fulfillment, No
(walang katiyakan kung mangyayari or hindi). Kapag Obligation. (i.e. I will give you 10,000 pesos if you will
past event naman ang importante UNKNOWN TO THE pass the subject) this is suspensive because it suspends
PARTIES the demandability of the obligation, hanggat hindi mo
pa naipapasa ang subject na to, wala rin akong
Bakit nga ba pag future yung condition dapat uncertain? obligation na magbayad sayo ng 10,000 pesos, hindi mo
Kasi kapag certain yan, future and certain (siguradong parin pwedeng idemand na magbayad ako sayo ng
mangyayari hindi na yan conditional obligation magiging 10,000 pesos. So ang main point dito is kapag nafulfill
obligation with a term or period na siya. na yung condition which is i.e. yung “if you will pass the
subject” saka lang mag gi-give rise yung obligation (para
Characteristics: siyang birth of the obligation kapag nafulfill yung
• Future and Uncertain – future and uncertain condition).
must go together
• Past but unknown – past event unknown to the Resolutory Condition
parties. • (Condition subsequent)
• Fulfillment of the condition will extinguish an
obligation already existing
Explanation: Happening ng condition or fulfillment ng Explanation ni sir: Kung may debtor daw na nagsabi na
condition extinguishes the obligation (gaya ng sabi ko magbabayad siya when his means permits him to do so,
kanina which is yung death ng obligation kapag nafulfill it shall be deemed as one with a period. Bakit? Bakit
na yung condition) So parang kabaliktaran lang ng hindi siya conditional? Kasi ganito yan, what the law
suspensive condition. says is that this debtor will have his means kasi paano
siya kakaain kung di siya magkakaroon ng means so
The obligation takes effect at once, kaagad may darating ang time na magkakaroon siya ng means to
condition na, but it will terminate (mawawala siya upon pay. The fact remains that the payment is not
the happening/fulfillment of the event or condition) dependent on debtor’s will. He indeed promise
payment, and what really depends on him is not the
Summary: So again, if the suspensive condition is payment but the time, when the payment is to be
fulfilled the obligation arises (magkakaroon ng made. Darating at darating yan, certain siya na
obligation) while if it is the resolutory condition that is magkakaroon ng means to do so. It’s not a question of
fulfilled ang obligation ay mawawala it will extinguish if, it’s a question of when. So for example nagkautang
the obligation already existing. kayo tapos sinabi niyo “babayaran kita kapag nagkapera
na ako” then it’s deemed with a term or period and not
When is an obligation demandable at once? condition.
Obligations that are immediately demandable:
1. Pure obligations (Art 1179) Where duration of period depends upon the will of
2. Obligations with resolutory condition (Art. debtor.
1179, par.2)
3. Obligations with resolutory period (Art. 1193, 1. The debtor promises to pay when his means permit
par.2) him to do so
4. Obligations with a condition not to do an  In this case, what depends upon the debtor’s
impossible thing (Art. 1183, par.2) will is not whether he should pay or not for
indeed he binds himself to pay.
 What is left only to his will is the duration of the
Distinctions between suspensive and resolutory period.
conditions.  If the debtor and the creditor cannot agree as
to the specific time for payment, the court shall
(1) If the suspensive condition is fulfilled, the obligation
fix the same on the application of either party.
arises, while if it is the resolutory condition that is
 What really depends on him is not the
fulfilled, the obligation is extinguished;
obligation but the time.
 It’s a question of when.
(2) Until the first takes place, the existence of the
obligation is a mere hope, while in the second, its
2. Other cases – As when the debtor binds himself to
effects flow, but over it, hovers the possibility of
pay:
termination.
 Little by little
 As soon as possible
ARTICLE 1180. WHEN THE DEBTOR BINDS HIMSELF TO
 From time to time
PAY WHEN HIS MEANS PERMIT HIM TO DO SO, THE
 As soon as I have the money
OBLIGATION SHALL BE DEEMED TO BE ONE WITH A
 At any time I have the money
PERIOD, SUBJECT TO THE PROVISIONS OF ARTICLE
 In partial payments
1197.
 When I am in a position to pay
Period – is a future and certain event upon the arrival
ARTICLE 1181: IN CONDITIONAL OBLIGATIONS, THE
of which the obligation subject to it either arises or
ACQUISITION OF RIGHTS, AS WELL AS THE
extinguished.
EXTINGUISHMENT OR LOSS OF THOSE ALREADY
ACQUIRED, SHALL DEPEND UPON THE HAPPENING OF
Explanation:
THE EVENT WHICH CONSTITUTES THE CONDITION.
Ang sinasabi ng article 1180 pag daw sinabi ni debtor
magbabayad siya when his means permit him to do so
Explanation: This article reiterates ang pagkakaiba sa
yan daw ay with a period.
pagitan ng suspensive condition at ng isang resolutory
condition.
The obligation is not conditional but with a period kasi
yun na yung sinasabi ng batas pero actually it’s because
Effect of happening of condition:
the payment does not depend upon the will of the
This article reiterates the distinction between a
debtor it’s only the time, yung oras lang kung kailan ba
suspensive (or antecedent) condition and a resolutory
ifufulfill yung obligation. It’s not whether or not dapat
(or subsequent) condition.
ba siyang mag deliver, dapat ba siyan magbayad or
dapat ba siyang mag fulfill ng obligation niya, hindi
1. Acquisition of rights
ganon kasi kapag ganon it’s considered as conditional
 In obligations subject to a suspensive condition,
obligation na. Pero dito dapat talaga, he’s bind to
the acquisition of rights by the creditor depends
deliver his obligation pero kung kailan yan ang hindi
upon the happening of the event which
natin alam.
constitutes the condition. (so magkakaroon lang
ng acquisition of rights si creditor once na  Impossible – when the condition is not capable
nafulfill na ang condition) of realization according to nature, law, public
 What characterizes this kind of obligation is the policy or good customs.
fact of its efficacy or obligatory force (as o Explanation: (it is not capable, due to
distinguished from its demandability) is its nature or due to the operation of law
subordinated to the happening of a future and or morals or public policy (i.e. due to
uncertain event; nature: I will give you this if you give me
 so that if the suspensive condition does not take the moon, it’s physically impossible)
another is the operation of law: I will
place, the parties would stand as if the
give you 1M if you kill your bestfriend,
conditional obligation had never existed
it’s impossible by law because there’s a
 or before the suspensive condition has taken
law prohibiting killing a person.
place, what is acquired by the creditor is a mere 4. As to cause or origin
hope or expectancy of acquiring right.  Potestative – when the fulfillment of the
 Bibigay ko sayo yung kotse ko kapag pumasa ka condition depends upon the will of a party to
sa oblicon sub. the obligation. (either debtor or creditor)
2. Loss of rights already acquired  Casual – when the fulfillment of the condition
 In obligations subject to a resolutory condition, depends upon chance and/or upon the will of a
the happening of the event which constitutes third person.
the condition produces extinguishment or loss  Mixed – when the fulfillment of the condition
of rights already acquired. depends partly upon the will of a party to the
 The creditor will enjoy the things he currently obligation and party upon chance and/or will of
have, and loss his rights kapag nafulfill na ang a third person
condition. 5. As to mode
 Bibigay ko sayo tong kotse ko ngayon pero pag  Positive – when the condition involves the
pumasa ka sa oblicon ibabalik mo yung car performance of an act. Act na kailangan mo
ibigay
 Negative – when the condition involves the
Effect of non-compliance with resolutory condition.
omission of an act. Act na kailangan mo i-omit
 Where a contract is subject to a resolutory
6. As to number
condition, non-compliance with or non-  Conjunctive – when there are several
fulfillment of the condition resolves the conditions, all of which must be realized.
contract by force of law without need of o Explanation: Dapat lahat ng condition
judicial intervention. maperform to give rise to the
obligation. For example “If you pass all
ARTICLE 1182: WHEN THE FULFILLMENT OF THE of your subjects in your second year
CONDITION DEPENDS UPON THE SOLE WILL OF THE first sem, then I will give you a car” So
DEBTOR, THE CONDITIONAL OBLIGATION SHALL BE wala kang ibang choice need mo ipasa
VOID. lahat
IF IT DEPENDS UPON CHANCE OR UPON THE WILL OF A  Alternative – when there are several
THIRD PERSON, THE OBLIGATION SHALL TAKE EFFECT conditions, but only one must be realized.
IN CONFORMITY WITH THE PROVISIONS OF THIS CODE. o Explanation: Pero kapag alternative,
pwedeng ano lang “If you pass my
Explanation: So in this article we will understand subject in your first sem, then I will give
Potestative, Casual and Mixed Obligations. you a card.” So iisa lang ang
cinoconsider mo.
7. As to divisibility
Classifications of Conditions:
 Divisible – when the condition is susceptible of
1. As to effect
partial realization. Capable of partial
 Suspensive – when the fulfillment of the
performance.
condition results in the acquisition of rights
 Indivisible – when the condition is not
arising out of the obligations.
susceptible of partial realization.
 Resolutory – when the fulfillment of the
condition results in the extinguishment of rights
Meaning of Potestative Condition
arising out of the obligation.
A Potestative condition is a condition suspensive in
2. As to Form
nature and which depends upon the sole will of one of
 Express – when the condition is stated
the contracting parties. Performance depends
expressly. I will give you 50 sacks of rice if you
exclusively on the will of one of he parties either debtor
pass the oblicon sub (very explicit)
or creditor.
 Implied – when the condition is tacit. I will give
you 50 cavans of rice if you pass my subject (di
mo alam anong sub)
Where suspensive condition depends upon the will of
3. As to possibility
debtor.
 Possible – when the condition is capable of
realization according to nature, law, public (1) Conditional obligation void.
policy or good customs. (it is capable of  Where the Potestative condition depends solely
fulfillment in nature and in law, most of the upon the will of the debtor, the conditional
classifications are positive condition) obligation shall be void because its validity and
compliance is left to the will of the debtor and it
cannot, therefore, be legally demanded.
Examples:  (2) When the fulfillment of the condition does
 I will give you 10,000 pesos if I like (pag ganiyan not depend on the will of the obligor, but that
daw void kasi naman masyadong halata, the on a third person who can in no way be
obligation is illusory, para lang kayong compelled to carry it out, and it is found by the
naglolokohan) court that the obligor has done all in his power
 I will pay you after I receive a loan from a bank to comply with his obligation, his part of the
 I will pay you after I recover what D owes me contract is deemed complied with and he has a
right to demand performance of the contract by
(2) Only the condition void the other party.
 If the obligation is a pre-existing one, and,
therefore, does not depend for its existence Mixed Condition
upon the fulfillment by the debtor of the  The obligation is valid if the suspensive
potestative condition, only the condition is void condition depends partly upon chance and
leaving unaffected the obligation itself. Here, partly upon the will of a third person
the condition is imposed not on the birth of the  Example: Where X, building contractor, obliges
obligation but on its fulfillment. himself in favor of Y, owner to repair at X’s
 Example: D borrowed P10,000 from C payable expense, any damage to the building taking
within 2 months. Subsequently, D promised to place after an earthquake if found by a panel of
pay V “after D sells his car” to which C agreed. In arbitrators that construction defects
this case, only the condition is void but not the contributed in any way to the damage. Both
pre-existing obligation of D to pay C. conditions must take place in order that X’s
obligation will arise.
Where suspensive condition depends upon the will of
creditor. Where suspensive condition depends partly upon the
 If the condition depends exclusively upon the will of debtor.
will of the creditor, the obligation is valid.  According to Manresa, the use of the word
 Example: I will give you 10,000 pesos if you like “exclusive” (now “sole”) makes it clear that
(valid siya kapag Potestative obligation on the conditional obligations whose fulfillment
part of the creditor) depends partly upon the will of the debtor and
 The obligation does not become illusory. partly upon the will of a third person, or upon
Normally, the creditor is interested in the chance are perfectly valid.
fulfillment of the obligation because it is for his  For example, “I will give you 1M if you marry
benefit. It is up to him whether to enforce his Sarrah” So it will not entirely dependent upon
right or not. the will of the debtor, mixed siya, Yung will ni
debtor and yung will ng third person which is si
Where resolutory condition depends upon the will of Sarrah.
the debtor.
 If the condition is resolutory in nature, like the Summary
right to repurchase in a sale with pacto de retro,  Potestative on debtor + Suspensive = VOID
the obligation is valid although its fulfillment  Potestative on debtor + Resolutory = Valid (no
depends upon the sole will of the debtor. (So harm done since the work has been rendered,
Potestative + Resolutory ito, valid yung the creditor enjoyed the fruits of his labor)
obligation and only the condition lang ang void, (there is no damage done)
since the obligation has been rendered  Potestative on part of creditor = Valid
naeenjoy n ani creditor yung fruits of labor ni  Casual = Valid
debtor)  Mixed = Valid
 The fulfillment of the condition merely causes
the extinguishment or loss of rights already ARTICLE 1183: Impossible conditions, those contrary to
acquired. good customs or public policy and those prohibited by
 The debtor is naturally interested in its law shall annul the obligation which depends upon
fulfillment. them. If the obligation is divisible, that part thereof
 The position of the debtor when the condition is which is not affected by the impossible or unlawful
resolutory is exactly the same as that of the condition shall be valid.
creditor when the condition is suspensive.
 A condition which is both potestative (or The condition not to do an impossible thing shall be
facultative) and resolutory may be valid, even considered as not having been agreed upon.
though the condition is left to the will of the
obligor. Explanation: Obviously this condition talks about
impossible and illegal conditions, so the three kinds of
Casual Condition Impossible Conditions according to this condition are:
 (1) If the suspensive condition depends upon
chance or upon the will of a third person, the Three kinds of impossible Conditions
obligation subject to it is valid.  Physically impossible condition
 Example: I will give you 10,000 pesos if I won in o By nature of things, cannot exist or
the lottery tomorrow. cannot be done
o Ex. Obligation to make the dead man  As soon as it has become indubitable that the
alive event will not take place although the time
 Illogical condition specified has not yet expired
o You draw a circle at the same time a Example:
square X obliges himself to give Y P10,000.00 if Y will marry W
 Legally Impossible Conditions before Y reaches the age of 23.
o When they are contrary to law, morals, a) X is liable if Y marries W before he reaches the
good customs, public order, or public age of 23.
policy. b) X is not liable if Y marries W at the age of 23 or
o Ex. Condition to kill someone, both the after he reaches the age of 23. In this case, the
obligation and condition are void time specified, before reaching the age of 23,
has expired without the condition (marrying W)
Effect of Impossible Conditions being fulfilled. The obligation is extinguished as
1. Conditional obligation void soon as Y becomes 23years old.
 Impossible conditions annul the obligation c) If Y dies at the age of 22 without having married
which depends upon them. Both the obligation W, the obligation is extinguished because it has
and the condition are void. become indubitable that the condition will not
 The reason behind the law is that the obligor take place. In this case, the obligation of X is
knows his obligation cannot be fulfilled. He has deemed extinguished from the death of Y,
no intention to comply with his obligation. although the time specified (before reaching
 In conditional testamentary dispositions and in the age of 23) has not yet expired.
simple and remuneratory donations, the rule is
different. Article 1185: The condition that some event will not
happen at a determinate time shall render the
2. Conditional Obligation Valid obligation effective from the moment the time
If the condition is negative, that is, not to do an indicated has elapsed, or if it has become evident that
impossible thing, it is to disregard the condition but the the event cannot occur.
obligation is rendered pure and valid. If no time has been fixed, the condition shall be
deemed fulfilled at such time as may have probably
The condition not to do an impossible thing shall be been contemplated, bearing in mind the nature of the
considered as not having been agreed upon. obligation
 Both obligation and condition are valid
 Ex. I will give you 1Million if you cannot make a Negative Conditions
dead man alive (okay nay un since di mo naman The above provision speaks of a negative condition that
na talaga kayang buhayin yung patay na) an event will not happen at a determinate time. The
obligation shall become effective and binding:
3. Only the affected obligation void.  From the moment the time indicated has
Note: If the obligation is divisible, that part thereof elapsed without the event taking place; or
which is not affected by the impossible or unlawful  From the moment it has become evident that
condition shall be VALID. the event cannot occur, although the time
 Ex. I will give you 10,000 if you sell my land and I indicated has not yet elapsed.
will give you a car, if you kill Pedro. If no time is fixed, the circumstances shall be considered
 The obligation to give 10,000 is valid but the to determine the intention of the parties. This rule may
obligation to give a car is VOID because it is also be applied to a positive condition.
dependent upon an illegal condition. Example:
X binds himself to give Y P10,000.00 if Y is not yet
4. Only the Condition void married to W on December 30.
If the obligation is a pre-existing obligation, and, a) X is not liable to Y if Y marries W on December
therefore, does not depend upon the fulfillment of the 30 or prior thereto.
condition which is impossible, for its existence, only the b) X is liable to Y if on December 30 Y is not
condition is void. married to W or if Y marries W after December
30. In the latter case, the condition (not
Article 1184: The condition that some event happen at marrying W) is fulfilled upon the expiration of
a determinate time shall extinguish the obligation as the time indicated, which is December 30.
soon as the time expires or if it has become c) Suppose W dies on November 20 without
indubitable that the event will not take place having been married to Y. The obligation is
rendered effective because it is certain that the
Positive Condition condition not to marry W will be fulfilled. In this
The above article refers to a positive (suspensive) case, the obligation Becomes effective from the
condition – the happening of an event at a determinate moment of W’s death on November 20
time. The obligation is extinguished: although the time indicated (December 30) has
 As soon as the time expires without the event not yet elapsed.
taking place, or Priest are not prohibited to contract marriage
ARTICLE 1186: The condition shall be deemed fulfilled If the obligation is unilateral, the debtor shall
when the obligor voluntarily prevents its fulfillment. appropriate the fruits and interests received, unless
from the nature and circumstances of the obligation it
(Constructive fulfillment/Presumed Fulfillment) should be inferred that the intention of the person
(pag voluntarily pinigilan ng debtor yung fulfillment ng constituting the same was different.
condition automatically fulfilled na ang condition)
In obligations to do and not to do, the courts shall
Constructive fulfillment of suspensive condition. determine, in each case, the retroactive effect of the
There are 3 requisites for the application of this article: condition that has been complied with.
1. The condition is suspensive
2. The obligor actually prevents the fulfillment of Explanation: To simplify this, ganito yan, question: Ano
the condition ang epekto ng fulfillment ng suspensive condition? Alam
3. He acts voluntarily na alam niyo na dapat yan, The obligation becomes
effective or the obligation will arise.
The law does not require that the obligor acts with
malice or fraud as long as his purpose is to prevent the Next question: From what day? Ang sabi ng article 1187
fulfillment of the condition. He should not be allowed to it shall retroact to the day of the constitution of the
profit from his own fault or bad faith to the prejudice obligation to better understand this let’s have an
of the obligee. In a reciprocal obligation like a contract example.
of sale, both parties are mutually obligors and also
obligees. Example:

Example: On January 20, Sean agreed to sell his parcel of land to B


Pogi promised to give a car to Ganda if she passes the for P100,000.00 should Ben win a case involving the
board exam. But Pogi poisoned Ganda para di siya recovery of another parcel of land. On April 10, Sean
matuloy mag exam, therefore, it’s considered na nafulfill sold his land to Cherry. Ben won the case on December
na yung condition since Pogi voluntarily prevents the 4.
fulfillment of the condition kaya need niya parin ibigay
yung car. Before December 4, Ben had no right to demand the
sale of the land by Sean. When the condition, however,
If attempt lang to prevent di magaapply tong article na was fulfilled on December 4, it is as if Ben was entitled
to to the land beginning January 20. Hence, as between
Ben and Cherry, Ben will have a better right over the
When there’s impossibility to the fulfillment of the land. (It is required, however, under the Property
condition, the effect of the prestation to give. Both Registration Decree [Pres. Decree No. 1529, Sec. 51.],
obligation are considered VOID that the promise of Sean be annotated on the back of
the certificate of title of the property to be binding
Constructive fulfillment of resolutory condition. against third persons like Cherry.)
Article 1186 applies also to an obligation subject to a
resolutory condition with respect to the debtor who is If the land was sold by Ben to Den on May 15, Den
bound to return what he has received upon the would still have a better right as against Cherry since
fulfillment of the condition the sale by Ben will be considered valid.

(so if nafulfill na raw yung condition kunyare ang


Example:
obligation is to give a land and yung obligation na yan is
X obliges himself to allow Y to occupy the former’s house
prinomise nung January 20 and then nafulfill lang yung
in Manila as long as X is assigned by their company in
condition nung December 4, ang mangyayari, yung land
the province. When Y learned that X would be
na prinomise sayo nung January 20 sayo na yun from
transferred to Manila, he was able to induce the
that day since sabi nga sa article 1187 it shall retroact
president of the company to assign another person in
to the day of the constitution of the obligation.
place of X.
Constitution meaning yung birth ng obligation. So bakit
ng aba ito important, so based sa ating example binenta
The obligation of X is extinguished because the
raw ni Sean yung land kay Cherry nung April 10, which is
fulfillment of the resolutory condition was voluntarily
may right naman talaga si Sean na ibenta yung land
prevented by Y. Hence, Y must vacate the house.
since asa kaniya pa yung land so siya pa yung may real
right over the land and hindi pa naman nafufulfill ni Ben
ARTICLE 1187: The effects of a conditional obligation to
yung condition na Manalo sa case nung April 10, since
give, once the condition has been fulfilled, shall
according nga sa facts nung example, nanalo lang si Ben
retroact to the day of the constitution of the
sa case nung December 4,
obligation.
so ito ang question, from December 4 sino na ang mas
Nevertheless, when the obligation imposes reciprocal
may right kay Ben and kay Cherry? Si ben, dahil sakaniya
prestations upon the parties, the fruits and interests
nakapromise yung land nay un and if stated naman sa
during the pendency of the condition shall be deemed
back ng certificate ng title ng lupa na yung land na yun is
to have been mutually compensated.
nakapromise na kay Ben, then si Ben ang mas may right
pwede niyang kunin kay Cherry yung land, pero kapag
hindi alam, or hindi informed si cherry na yung land pal The debtor may recover what during the same time he
ana yun is nakapromise sa ibang tao, the cherry is a has paid by mistake in case of a suspensive condition.
purchaser in good faith meaning hindi pwedeng kunin
 (PAR 1. Preservation of the right of the
sakaniya ang lupa since hindi niya nga alam na may
Creditor) Rights of Creditor
usapan pala si Ben and si Sean na ganon.
o He may take or bring appropriate
Retroactive effects of fulfillment of suspensive actions for the preservation of his right,
condition as the debtor may render nugatory the
1. In obligation to give obligation upon the happening of the
condition. Thus, he may go to court to
 An obligation to give subject to a suspensive
prevent the alienation or concealment
condition becomes demandable upon the
of the property of the debtor or to have
fulfillment of the condition. However, once the
his right annotated in the registry of
condition is fulfilled, its effects shall retroact to
property.
the day when the obligation was constituted.
o It provides for actions to preserve the
 The reason is because the condition is only an
creditors right, malamang dapat talaga
accidental element of a contract.
otherwise baka pag dating ng panahon
 An obligation can exist without being subject to
nafulfilled ang condition but he will not
a condition. Had the parties known beforehand
receive anything so kailangan niyang i-
that the condition would be fulfilled, they would
preserve, but take note the action is for
have bound themselves under a pure
the preservation of his right, now these
obligation.
includes among others the right to go to
 Hence, the obligation should be considered
court to prevent alienation and
from the time it is constituted and not from the
concealment of the property of the
time the condition is fulfilled
debtor or the right to have it annotated
 It would seem that the rule on retroactivity has
in the registry of property, depende
no application to real contracts as they are
kung ano yung situation or yung
perfected only by delivery of the object of the
obligation)
obligation.
 (Par 2. The right of the debtor to recover what
2. In obligations to do or not to do
was paid by mistake) Rights of Debtor
 With respect to the retractive effect of the
o To prevent unjust enrichment
fulfillment of a suspensive condition in
o He is entitled to recover what he has
obligations to do or not to do, no fixed rule is
provided. paid by mistake prior to the happening
of the suspensive condition. This right is
 This does not mean, however, that in these
granted to the debtor because the
obligations the principle of retroactivity is not
creditor may or may not be able to
applicable.
fulfill the condition imposed and hence,
 The courts are empowered by the use of sound
it is not certain that the obligation will
discretion and bearing in mind the intent of the
arise. This is a case of solutio indebiti
parties, to determine, in each case the
which is based on the principle that no
retroactive effect of the suspensive condition
one shall enrich himself at the expense
that has been complied with.
of another
 It includes the power to decide that the
fulfillment of the condition shall have no
ARTICLE 1189: When the conditions have been
retroactive effect or from what date such
imposed with the intention of suspending the efficacy
retroactive effect shall be reckoned.
of an obligation to give, the following rules shall be
observed in case of the improvement, loss or
(Retroactive effect as to the Fruits and Interest)
deterioration of the thing during the pendency of the
condition:
Reciprocal – mutually compensated (Hindi kailangan
ibigay ni debtor ang fruits na nag accrue during the
(1) If the thing is lost without the fault of the debtor,
dependency of the obligation same din kay creditor di
the obligation shall be extinguished;
niya need ibigay interest ng pera niya na ibabayad niya
dapat) Reciprocal obligation- walang kailangan gawin or
(2) If the thing is lost through the fault of the debtor,
ibalik exception lang pag nag agree both parties
he shall be obliged to pay damages; it is understood
that the thing is lost when it perishes, or goes out of
Unilateral – usually no retroactive effect because they
commerce, or disappears in such a way that its
are gratuitous. The debtor receives nothing from the
existence is unknown or it cannot be recovered;
creditor.
(3) When the thing deteriorates without the fault of
ARTICLE 1188:
the debtor, the impairment is to be borne by the
The creditor may, before the fulfillment of the
creditor;
condition, bring the appropriate actions for the
preservation of his right.
(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 The debtor is not in the fault if the debtor performs the
damages in either case; necessary diligence required with that kind of
obligation, or ordinary diligence (diligence of a good
(5) If the thing is improved by its nature, or by time, father of a family) So if the debtor failed to exercise that
the improvement shall inure to the benefit of the ordinary diligence then it he will be at fault
creditor;
(2) Loss of thing through debtor’s fault.
Example:
(6) If it is improved at the expense of the debtor, he
In the same example, if the loss occurred because of the
shall have no other right than that granted to the
negligence of X, Y will be entitled to demand damages,
usufructuary.
i.e., P100,000 plus incidental damages, if any.
Deals with scenarios in which a thing is either loss,
(2) If the thing is lost through the fault of the debtor,
deteriorated or improved.
he shall be obliged to pay damages; it is understood
that the thing is lost when it perishes, or goes out of
Article 1189 applies only if:
commerce, or disappears in such a way that its
 The obligation is a real obligation
existence is unknown or it cannot be recovered;
 The object is a specific or determinate thing
 The obligation is subject to a suspensive
So if the debtor failed to exercise that ordinary diligence
condition
then it he will be at fault:
 The condition is fulfilled
 There is loss, deterioration, or improvement of
So what will happen if the debtor is at fault when the
the thing during the pendency of the condition.
thing was lost?
- He shall be obliged to pay damages.
Kind of loss:
(1) Physical loss – when a thing perishes as when a
Can the creditor compel the debtor for specific
house is burned and reduced to ashes.
performance for the thing that was lost, with respect to
(2) Legal loss – when a thing goes out of commerce
Art. 1189? No, because 1189 refers to specific things
(e.g. when it is expropriated) or when a thing
and the characteristics of a specific thing is that it
heretofore legal becomes illegal (e.g. during the
cannot be substituted. So, if the thing was lost, you as
Japanese occupation, American dollars had
the creditor cannot compel for specific performance for
become impossible since their use was
the delivery of the thing since nawala na nga eh. Always
forbidden by the belligerent occupant)
remember that when the specific thing was lost the only
(3) Civil Loss – when a thing disappears in such a
remedy left to the creditor is to ask for the payment of
way that its existence is unknown (e.g. a
damages.
particular dog has been missing for sometime),
or even if known, it cannot be recovered,
(3) Deterioration of thing without the debtor’s fault –
whether as a matter of fact (e.g. a particular
A thing deteriorates when its value is reduced or
ring is dropped from a ship at sea) or of law
impaired with or without the fault of the debtor.
(e.g. a property is lost through prescription).
Example:
Rules in case of loss, deterioration, or improvement of If the car figured in an accident, as a result of which its
thing during pendency of suspensive condition. windshield was broken an some of its paints were
scratched away without the fault of X, thereby reducing
(1) Loss of thing without the debtor’s fault its value to P90,000, Y will have to suffer the
Example: deterioration or impairment in the amount of P10,000
X obliged himself to give Y his car worth P100,000 if Y
will sell X’s property. The car was lost without the fault
of X. (3) When the thing deteriorates without the fault of
The obligation is extinguished and X is not liable to Y the debtor, the impairment is to be borne by the
even if Y sells the property. A person, as a general rule, creditor;
is not liable for a fortuitous event.
Deterioration is also known as partial loss for example
(1) If the thing is lost without the fault of the debtor, yung car, nasira, kinalawang, nabasag yung windshield,
the obligation shall be extinguished natanggalan ng side mirror or nawalan ng gulong.

Supposed I will give 10,000 to Anna and it was lost Pag walang fault si debtor tapos partial loss
without my fault because it was robbed, despite having (deterioration) si creditor ang magsusuffer.
security guards and putting it in a safe. Is my obligation
to give 10,000 to Anna extinguished? No, because (4) Deterioration of thing through debtor’s fault
money is generic, and a generic thing never perishes so I Example:
am still obliged to give 10,000 to Anna. (Generic thing is In this case, B may choose between:
a class or species that is unsegregated, undivided and a) Rescission (or cancellation) of the obligation
without any particularity. Generic thing never perishes, with damages [in this case, X is liable to pay Y
therefore it can never be extinguished) P100,000, the value of the car before its
deterioration plus incidental damages]
b) Fulfillment of the obligation with damages [In (1) In obligations to give – When the resolutory
this case, X is bound to Y to give the car and pay condition in an obligation to give is fulfilled, the
P10,000 plus incidental damages obligation is extinguished and the parties are
obliged to return to each other what they have
(4) If it deteriorates through the fault of the debtor, received under the obligation.
the creditor may choose between the rescission of the a. There is a return to the status quo. In
obligation and its fulfillment, with indemnity for other words, the effect of the
damages in either case fulfillment of the condition is
retroactive.
(5) Improvement of thing by nature or by time – a b. In case the thing to be returned is
thing is improved when its value is increased or legally in the possession of a third
enhanced by nature or by time or at the expense of the person who did not act in bad faith, the
debtor or creditor. remedy of the party entitled to
restitution is against the other.
Example:
c. The obligation of mutual restitution is
Suppose the market value of the car increased, who
absolute. It applies not only to the thing
gets the benefit?
received but also to the fruits and
interests.
The improvement shall inure to the benefit of Y. In as
d. In obligations to give subject to a
much as Y would suffer in case of deterioration of the
suspensive condition, the retroactivity
car through a fortuitous event, it is but fair that he
admits exceptions according as the
should be compensated in case of improvement of the
obligation is bilateral or unilateral.
car instead.
The reason for the difference is quite plain. The
(5) If the thing is improved by its nature, or by time,
happening of the suspensive condition gives birth to the
the improvement shall inure to the benefit of the
obligation. On the other hand, the fulfillment of the
creditor
resolutory condition produces the extinguishment of
the obligation as though it has never existed. The only
(6) Improvement of thing at expense of debtor.
possible exception is when the intention of the parties is
Example: otherwise.
During the pendency of the condition, X had the car
painted and its seat cover changed at his expense. EXAMPLE:
In this case, X will have the right granted to a
usufructuary with respect to improvements made on D obliges himself to allow C to use the former’s car until
the thing held in usufruct. D returns from the province. Upon the return of D from
the province, C must give back the car.
Usufruct – is the right to enjoy the use of fruits of a
thing belonging to another The effect of the happening of the condition is to annul
the obligation as if it had never been constituted at all.
(6) If it is improved at the expense of the debtor, he In this case, the parties intend the return of the car.
shall have no other right than that granted to the
usufructuary. (2) In obligations to do or not to do. — In some
obligations, the courts shall determine the
If the debtor installed several rare parts, in short debtor retroactive effect of the fulfillment of the
ang nag improve. What would happen? Walang resolutory condition (par. 2.) as in the case
Karapatan yung debtor over the improvements, hindi where the condition is suspensive. (Art. 1187,
niya pwedeng tanggalin, he’s only granted the par. 2.) The courts in the exercise of discretion
usufructuary (pinapagamit mo sa iba yung gamit mo or may even disallow retroactivity taking into
enjoyment of using other people’s property) account the circumstances of each case.

Article 1190: When the conditions have for their Applicability of Article 1189 to party with obligation to
purpose the extinguishment of an obligation to give, return.
the parties, upon the fulfillment of said conditions,
shall return to each other what they received. In the example above, D is the debtor and C, the
creditor, pending fulfillment of the resolutory condition
In case of loss, deterioration or improvement of the — the return of D from the province. Upon the
thing, the provisions which, with respect to the debtor, happening of the condition. D becomes the creditor
are laid down in the preceding article shall be applied with a right to demand the return of the car and C, the
to the party who is bound to return. debtor, with the obligation to return the car.

As for obligations to do and not to do, the provisions Stated in another way, the happening of a resolutory
of the second paragraph of article 1187 shall be condition has the same effect on the creditor as the
observed as regards the effect of the extinguishment suspensive condition has, on the debtor — an obligation
of the obligation. arises. The fulfillment of the resolutory condition
converts the creditor into debtor, and the debtor into
Effects of fulfillment of Resolutory condition.
creditor. Hence, the applicability of the provisions of EXAMPLES: Donation; In a contract of loan, the lender
Article 1189 in case of loss, deterioration, or has the obligation to give. After the lender has complied
improvement of the thing; and pending the fulfillment with his obligation, the debtor has the obligation to pay.
of the condition, the parties are entitled to the rights
granted by Article 1188. (2) Bilateral. — when both parties are mutually bound
to each other. In other words, both parties are debtors
I’ll give you my car, and you’ll give me wifi if you and creditors of each other. Bilateral obligations may be
graduate. In resolutory kapag nafulfill na yung condition reciprocal or non-reciprocal.
mag rereturn na ng mga gamit.
(a) Reciprocal obligations are those which arise from the
I’ll give you my car if you give me your phone if you pass same cause and in which each party is a debtor and
the oblicon exam. Supposed that you passed the oblicon creditor of the other, such that the performance of one
sub what would happen? Nothing, because it’s a is designed to be the equivalent and the condition for
suspensive condition and not a resolutory condition, it’s the performance of the other. The general rule is that
not subject to Article 1190. they are to be performed simultaneously or at the same
time such that each party may treat the fulfillment of
PAR 2. (preceding article) what is incumbent upon the other as a suspensive
condition to his obligation (see Art. 1169, last par.), and
Supposed that Ronielyn, a serial gambler, we entered its non-fulfillment, as a tacit or implied resolutory
into an obligation, that I will give her a land now condition, giving him the right to demand the rescission
provided that she will not go to any casino or gambling of the contract, i.e., it may be exercised even if it is not
station. After a month, pumasyal siya sa casino. Yan ba provided in the agreement of the parties.
ay extinguishing the obligation. Maeextinguish yung
obligation and ibabalik yung land. Can she claim that EXAMPLE: In a contract of sale in the absence of any
she’s the owner of the land for that month na tumira stipulation, the delivery of the thing sold by the seller is
siya doon. conditioned upon the simultaneous payment of the
purchase price by the buyer, and vice versa.
Habang nakatira siya doon, inani niya yung mga prutas
at gulay na andoon, amounting to 5,000 pesos. With the The seller is the creditor as to the price and debtor as to
obligation extinguished, what will happen to the fruits? the thing, while the buyer is the creditor as to the thing
When the obligation is extinguished, due to the and debtor as to the price.
happening of the event, the fruits and interest will go
back to the creditor, why? Because as if there’s no (b) Non-reciprocal obligations are those which do not
obligation that took place. Kung walang obligation then impose simultaneous and correlative performance on
that earnings sana will go to the creditor’s income, so both parties. In other words, the performance of one
the debtor have to return it. party is not dependent upon the simultaneous
performance by the other
ARTICLE 1191: The power to rescind obligations is
implied in reciprocal ones, in case one of the obligors EXAMPLES:
should not comply with what is incumbent upon him.
(1) D borrowed from C P50,000.00. C, on the other
The injured party may choose between the fulfillment hand, borrowed D’s car. The performance by D of his
and the rescission of the obligation, with the payment obligation to C is not conditioned upon the performance
of damages in either case. He may also seek rescission, by C of his obligation and vice versa.
even after he has chosen fulfillment, if the latter
should become impossible. Although D and C are debtors and creditors of each
other, their obligations are not reciprocal. The
The court shall decree the rescission claimed, unless obligation of D arises from the contract of loan, while
there be just cause authorizing the fixing of a period. that of C, from the contract of commodatum. The
obligations are not dependent upon each other and are
This is understood to be without prejudice to the rights not simultaneous. Article 1191 applies only if the
of third persons who have acquired the thing, in reciprocity arises from the same cause.
accordance with Articles 1385 and 1388 and the
Mortgage Law. (2) The contract between S and B states: “In the event S
exercises the right to repurchase [land sold by S to B] x x
Power to rescind the obligation x and becomes the owner of the premises, he shall be
obliged to give B the right of lease and execute a lease
Kinds of obligation according to the person obliged. contract.”

Here, no reciprocal obligation is created


They are:
between them for B to reconvey the premises and for S
(1) Unilateral. — when only one party is obliged to to lease them to B. There are two separate and distinct
comply with a prestation. obligations, each independent of the other. The
obligation of B to reconvey is not dependent on the
obligation of S to lease. The obligation of S is not an
essential part of the contract.
In other words, the obligation of S to lease the may also seek rescission even after he has chosen
property to B arises only after B had reconveyed the fulfillment if the latter should become impossible. But
same to S. after choosing rescission of the obligation, he cannot
thereafter demand its compliance, nor seek partial
Remedies in reciprocal obligations.
fulfillment under the guise of recovering damages.
Article 1191 is the general provision on
rescission of reciprocal obligations. It speaks of the right
While the right of choice remains with the plaintiff, an
of the “injured party’’ to choose between rescission or
alternative prayer in the complaint for fulfillment or
fulfillment of the obligation, with the right to claim
rescission is permissible in the discretion of the court
damages in either case. It governs where there is non-
for in such case it cannot be said that the plaintiff is
compliance by one of the contracting parties in case of
availing of both remedies.
reciprocal obligations.
The remedy granted is predicated on a breach
Example: In the preceding example, B may not choose
of obligation by the other party that violates the
both fulfillment and rescission, he may not
reciprocity between them. The breach contemplated is
subsequently ask for fulfillment and if he has selected to
the obligor’s failure to comply with an existing
enforce compliance with the contract, he may not later
obligation, not a failure of a condition to render binding
seek rescission.
that obligation.
However, if fulfillment becomes impossible because the
Choice of remedy by injured party car was lost or destroyed through the fault of S, B is
In case one of the obligors does not comply with allowed to convert his action into that of rescission.
what is incumbent upon him, the injured or aggrieved
party may choose between two remedies: Limitations on right to demand rescission.

(1) action for specific performance (fulfillment) of The right to rescind by the injured party (the one who
the obligation with damages; or has performed what is incumbent upon him) is not
(2) action for rescission of the obligation also with absolute. It is always provisional, i.e., contestable and
damages. subject to scrutiny and review by the courts.
EXAMPLE:
In a contract of sale of a car between S and B, it (1) Resort to the courts. — The rescission contemplated
was agreed that S, the owner, would deliver the car and by Article 1191 is a judicial rescission. (par. 3.) The
the necessary document duly signed by him to B at the injured party has to resort to the courts to assert his
house of C on December 1, and B would deliver the rights judicially (e.g., to recover what he has delivered
payment at the same place and on the same date. under the contract) for the same article provides
that . . . “the court shall decree the rescission
If S does not comply with his obligation. demanded, unless there be just cause authorizing the fi
xing of a period.” No person can take justice in his own
(a) B may, in an action for specific performance, hands and decide by himself what are his rights in the
demand the delivery of the car with damages; or matter. The other party must be given an opportunity to
be heard.
(b) B may demand from the court the rescission of the
contract also with damages. (2) Power of court to fi x period. — The court has
discretionary power to allow a period within which a
When a party demands rescission in reciprocal person in default may be permitted to perform his
obligations he, in effect, treats the non-fulfillment by obligation if there is a just cause for giving time to the
the other party of his obligation as a resolutory debtor, as where the default incurred was not willful or
condition. could be excused in view of the surrounding
circumstances.
Court may grant guilty party term for performance.
(3) Right of third persons. — Rescission creates the
The court shall decree the rescission claimed unless obligation of mutual restitution. However, if the thing,
there should be just cause for granting the party in subject matter of the obligation, is in the hands of a
default a term for the performance of his obligation. third person who acted in good faith, rescission is not
(par. 3.) available as a remedy.

Obviously, this exception applies only where the guilty (4) Slight or substantial violation. — The general rule is
party is willing to comply with his obligation but needs that rescission will not be granted for slight or casual
time to do so and not where he refuses to perform. breaches of contract. The violation should be
substantial and fundamental as to defeat the object of
Remedies are alternative. the parties in making the agreement. Thus, in a case, it
was held that delays on four (4) occasions in the
The remedies of the injured or aggrieved party are payment of rentals for a few days substantial violations
alternative and not cumulative, that is, he is privileged in a contract of lease to justify rescission because the
to choose only one of the remedies, and not both, law is not concerned with trifles.
subject only to the exception in paragraph 2, to wit: he
(5) Waiver of right. — The right to rescind may be The injured party has 2 option:
waived, expressly or impliedly. Thus, the acceptance by
 Demand specific performance plus damages
the seller of the land sold as security for the balance of
the price is an implied waiver of the right to rescind in  Rescission plus damages
case of non-payment by the buyer. His remedy is to
recover the balance. ARTICLE 1192: In case both parties have committed a
breach of the obligation, the liability of the first
Rescission of contract without previous judicial decree. infractor shall be equitably tempered by the courts. If
it cannot be determined which of the parties first
(1) Where automatic rescission expressly stipulated. — violated the contract, the same shall be deemed
The parties, may validly enter into an agreement that extinguished, and each shall bear his own damages.
violation of the terms of the contract would cause
cancellation thereof even without judicial intervention Where both parties guilty of breach. The above article
or permission or termination. This stipulation is in the contemplates two situations.
nature of a resolutory condition. Where the contract
itself contains such a stipulation the right to rescind is (1) First infractor known. — One party violated his
not “implied” but expressly recognized. Hence, Article obligation; subsequently, the other also violated
1191 is not applicable his part of the obligation. In this case, the
liability of the first infractor should be equitably
(2) Where contract still executory. — In the absence of reduced.
stipulation to the contrary, the right to rescind a (2) First infractor cannot be determined. — One
contract must be invoked judicially; it cannot be party violated his obligation followed by the
exercised solely on a party’s own judgment that the other, but it cannot be determined which of
other has committed a breach of the obligation. them was the first infractor. The rule is that the
However, although there is no performance yet by both contract shall be deemed extinguished and each
parties, but one is ready and willing to comply with shall bear his own damages. In effect, the court
what is incumbent upon him, and the other is not (see shall not provide remedy to either of the
Art. 1169, last par.), the willing party may, by his own parties, who must suffer the damages allegedly
declaration, rescind the contract without a previous sustained by them.
judicial decree of rescission. In such case, it is not
necessary that there be a stipulation providing for “The above rules are deemed just. The first one is fair to
automatic rescission. both parties because the second infractor also derived,
or thought he would derive, some advantage by his own
In any case, where the extrajudicial rescission is act or neglect. The second rule is likewise just because it
contested by the other party, he is free to resort to is presumed that both at about the same time tried to
judicial action, and only the final decision of the court reap some benefit.”
can finally settle whether the rescission was proper or
not. Liability ng first infractor will be reduced or equitably
tempered by the court ibig sabihin titimbangin ng court
Reciprocal obligation - obligations that have two parties kung ano yung makatarungan kasi kung hindi nagviolate
being mutually compensated. (i.e. deed of sale: the yung isang party and isa lang yung violator ang dami ng
other person promised to give you 1M, and then you pwedeng remedyo, damages, rescission, specific
promised that person that you will give the item so it’s a performance with damages. Eh kaso nagviolate rin yung
two way) isa edi ang remedy is magbabalance ang court kung ano
yung tama na maging penalty ng first infractor, incase
Unilateral Obligation - are like deed of donation, the however that the first infractor cannot be identified the
donor has the obligation to give you the property but obligation will be extinguished and each of them will
you as the do-nee do not have any obligations to the bear their own damages (for example: Nag infract ako
donor. and nag infract din siya and di alam kung sino nauna
then you will bear your own damages paano kung yung
Question: Si Anna umutang siya kay Jack ng 5k, damage ko 5,000 tapos yung damage niya 1M, each
kinabukasan umutang naman si Jack kay Anna ng 5k. parties would still bear their own damages, even if it’s
Can we call it a reciprocal obligation? No, because it’s unfair.
not reciprocal, remember that a reciprocal obligation
must come from a single event, dapat isa lang yung
usapan, they are mutually obliged to one another but
their obligation is not reciprocal.

The power to rescind obligations are implied to


reciprocal ones, in case one of the obligor do not
comply then you have the right to rescind. (I.e. deed of
sale, ready na ako ibigay yung car pero hindi pa ready
magpay yung other party, so as the injured one I have
the right to rescind the obligation plus ask for the
payment of damages.

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