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Conditional Obligation
When obligation demandable at once:
- One whose consequences are subject in one way
a. When it is pure
or another to the fulfillment of a condition
b. When it is subject to resolutory condition
c. When it subject to resolutory period
Condition
- Future and uncertain event, upon the Past event unknown to the parties
happening of which the effectivity or - What is contemplated is the knowledge to be
extinguishment of an obligation subject to it acquired in the future of the past event which at
depends. the moment is unknown to the parties
interested (Manresa)
Characteristics of Condition:
1. Future and uncertain
2. Past but unknown Article 1180
When the debtor binds himself to pay when his
Two principle Kinds of Condition: means permit him to do so, the obligation shall be
a. Suspensive Condition the fulfillment of which deemed to be one with a period, subject to the
will give rise to an obligation. provisions of Article 1197
- Condition precedent/ Condition antecedent
- Demandability of obligation is suspended until - What is left to the will of the debtor is the
the happening of a future and uncertain duration of the period only
event.
- There can be no rescission of an obligation Period
that is still non-existent, the suspensive - Future and certain event
condition not having been fulfilled.
b. Resolutory Condition Other Cases:
- Condition subsequent 1. Little by little
- The fulfillment of which will extinguish the 2. As soon as possible
obligation 3. From time to time
4. As soon as I have the money
Distinctions Between Suspensive and Resolutory 5. At any time I have the money
6. In partial payments or upon the will of the third person, the obligation
7. When I am in p1qosition to pay shall take effect in conformity with the provisions
of this Code.
Where Resolutory Condition Depends upon the Will Two kinds of Impossible Conditions:
of the Debtor 1. Physically Impossible Condition when they, in
- The obligation is valid although it is dependent nature of things, cannot exist or cannot be done;
upon the sole will of the debtor 2. Legally Impossible Condition when they are
- The fulfillment of the condition merely causes contrary to law, morals, good customs, public
the extinguishment or loss of rights already order or public policy
acquired.
Effects of impossible conditions:
1. Conditional Obligation Void
CASUAL CONDITION - Both the obligation and condition void
- Depends upon chance or upon the will of a third - The reason behind the law is that the
person: obligation is valid obligor knows his obligations cannot be
fulfilled.
Example: - In conditional testamentary dispositions
and in simple and remuneratory
conditions, the rule is different.
2. Conditional Obligation Valid If no time has been fixed, the condition shall be
- If the condition is negative (not to do an deemed fulfilled at such time as may have been
impossible ting); obligation is rendered probably been contemplated, bearing in mind the
pure and valid nature of the obligation.
3. Only the affected Obligation Void
- If the obligation is divisible, the part
thereof not affected by the impossible or Obligation shall become effective and binding:
unlawful condition shall be valid 1. From the moment the time indicated has
4. Only the Condition Void elapsed without the event taking place
- I the obligation is a pre-existing obligation, 2. From the moment it has become evident that
and, therefore, does not depend upon the the event cannot occur, although the time
fulfillment of the condition which is indicated has not yet elapsed.
impossible for its existence, only the
condition is void.
ARTICLE 1186 Constructive Fulfillment
Article 873
The condition is deemed fulfilled when the obligor
Impossible conditions and those contrary to law or
voluntarily prevents its fulfillment.
good customs shall be considered as not imposed
and shall in no manner prejudice the heir, even if
Requisites:
the testator should otherwise provide.
1. Condition is suspensive
2. Obligor actually prevents the fulfillment of the
condition; and
Article 727 3. He acts voluntarily or intentionally
Illegal or impossible conditions in simple and
remuneratory donations shall be considered as not Mere intention of the debtor (without actually preventing
imposed. the fulfillment) is insufficient
This article applies only if: As for obligations to do or not to do, the provisions
a. The obligation is a real obligation of the second paragraph of Article 1187 shall be
b. The object is a specific or determinate thing observed as regards the effect of the
c. The obligation is subject to a suspensive extinguishment of the obligation.
condition
d. The condition is fulfilled; and
e. There is loss, deterioration, or improvement of In obligations to give:
the thing during the pendency of the happening 1. There is a return to the status quo. In other
on one condition. words, the effect of the fulfillment of the
condition is retroactive.
Kinds of loss: 2. The obligation of mutual restitution is absolute.
1. Physical loss when a thing perishes as when a It applies not only to the things received but also
house is burned the fruits and interests.
2. Legal loss when a thing goes out of commerce 3. In case the thing to be returned is legally in the
or when a thing heretofore becomes illegal possession of a third person who did not act in
3. Civil loss when a thing disappears in such a bad faith, the remedy of the part entitled to
way that its existence is unknown, or even if restitution is against the other.
known it cannot be recovered, whether as a 4. In obligations to give subject to a suspensive
matter of fact or of law. condition, the retroactivity admits of exceptions
according to whether the obligation is bilateral
Art. 562 or unilateral. Here, there are no exceptions,
Usufruct gives a right to enjoy the property of another whether the obligation is bilateral or unilateral.
with the obligation of preserving its form and substance, 5. If the condition is not fulfilled, the rights
unless the title constituting it or the law otherwise acquired by a party become vested.
provides.
In obligations to do or not to do
Art. 579 - The courts shall determine the retroactive effect
The usufructuary may make on the property held in of the fulfillment of the resolutory condition.
usufruct such useful improvements or expenses for mere
pleasure as he may deem proper, provided he does not
alter its form or substance; but he shall no right to be
indemnified therefor. He may, however, remove such
ARTICLE 1191
improvements, should it be possible to do so without
The power to rescind obligations is implied in
damage to the property.
reciprocal ones, in case one of the obligors should
In every case, the courts shall determine 1. Term is for the benefit of the debtor alone
such period as may under the - He cannot be compelled to pay prematurely, but
circumstances have been probably he can, if he desires to do so.
contemplated by the parties. Once fixed by
- Examples:
the courts, the period cannot be changed
a. D borrowed from C P100 to be paid within
by them
one month without interest.
b. D promised to pay his debt on or before
Dec. 31, 2014.
3. According to definiteness
a. Definite period
2. Term is for the benefit of the creditor
- When it is fixed or it known when it will
- He may demand fulfillment even before the
come
b. Indefinite period arrival of the term but the debtor cannot require
him to accept payment before the expiration of
- When it is not fixed or it is not known when
it will come. Where the period is not fixed the stipulation period.
but a period is intended, the courts are - Example: D borrowed from C P 10,000 payable
usually empowered by law to fix the same. on Dec. 31 with the stipulation that D cannot
make payment before the lapse of the period but
C may demand fulfillment even before said date.
ARTICLE 1194
In case of loss, deterioration or improvement of the Acceleration by debtor of time payment
thing before the arrival of the day certain, the rules - Unless the creditor consents, the debtor has no
in Article 1189 shall be observed. right to accelerate the time of payment even if
the premature tender included an offer to pay
principal and interest in full
ARTICLE 1195
Anything paid or delivered before the arrival of the
ARTICLE 1197
period, the obligor being unaware of the period or
If the obligation does not fix a period, but from its
believing that the obligation has become due and
nature and the circumstances it can be inferred
demandable, may be recovered, with the fruits and
that a period was intended, the courts may fix the
interests.
duration thereof.
- Applies only to obligations to give
The courts shall also fix the duration of the period
- Presumption: debtor knew that the debt was not
when it depends upon the will of the debtor.
yet due
In every case, the courts shall determine such
period as may under the circumstances have been
probably contemplated by the parties. Once fixed
ARTICLE 1196
by the courts, the period cannot be changed by
Whenever in an obligation a period is designated, it
them.
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
If the obligation does not state a period and no period is - In case of a fortuitous event, the security must
intended, the court is not authorized to fix a period. The disappear.
courts have no right to make contracts for the parties. - Equally satisfactory no explanation as to
whom satisfaction should be considered
When court may fix a period: Consent of the creditor is not required
1. Inferred that period was intended (Par 1)
Examples: Par. 4: When debtor violates an undertaking
a. X agreed to construct the house of Y. The - Special undertaking: consideration upon which
parties failed to fix the period within which the creditor has given the term/period.
construction is to be made. Here, the court
can fix the term for it is evident that the Par. 5: When debtor attempts to abscond
parties intended that X should construct - Mere attempt or intent is sufficient
the house within a certain period.
b. B bought cement from the store of A on
credit. The period for payment in the
invoice was left blank. From the nature of ALTERNATIVE OBLIGATIONS
the obligation, it can be inferred that a
period is intended. ARTICLE 1199
2. Duration depends on the will of the debtor A person alternatively bound by different
prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of
ARTICLE 1198; IDIVA
one and part of the other undertaking.
The debtor shall lose every right to make use of the
period:
1. When after the obligation has been
Kinds of obligation according to object:
contracted, he becomes insolvent, unless
1. Simple Obligation
he gives a guaranty or security of the debt;
- There is only one prestation
2. When he does not furnish to the creditor
2. Compound Obligation
the guaranties or securities which he has - One where there are two or more prestations
promised; a. Conjunctive obligation
3. When by his own acts he has impaired said - One where there are several
guaranties or securities after their prestations and all of them are due
establishment, and when through a b. Distributive obligation
fortuitous event they disappear, unless he - One where one of two or more
immediately gives new ones equally prestations is due. It may be
satisfactory; alternative or facultative.
4. When the debtor violates any undertaking,
in consideration of which the creditor Alternative Obligation
agreed to the period; - One wherein various prestations are due but the
5. When the debtor attempts to abscond. performance of one of them is sufficiently
determined by the choice, which, as a general rule,
belongs to the debtor.
Par. 1: When debtor becomes insolvent
- Insolvency need not be judicially declared
- It is sufficient that the assets are less than the
ARTICLE 1200
liabilities
- Insolvency must occur after the obligation has The right of the choice belongs to the debtor, unless
been contracted it has been expressly granted to the creditor.
The debtor shall have no right to choose those
Par. 2: When debtor does not furnish guaranties or prestations which are impossible, unlawful or
securities promised which could not have been the object of the
obligation.
Par. 3: When guaranties or securities given have been
impaired or disappeared
Impossible, Unlawful prestations or those which could not If through the fault of J, item one is destroyed, D can
have been the object of the obligation rescind the contract if he wants. In case of rescission,
- Their presence does not invalidate the obligation the amount of 10,000 must be returned by D with
if it includes other undertakings otherwise free interest. J, in turn, must pay D the value of item one
from such defects. The debtors right pf choice is plus damages.
not extinguished altogether but limited to the
remaining valid prestations. D, instead of rescinding the contract, may choose
- If there is only one remaining; the obligation from item two or three with a right to recover the
becomes simple. value of item one with damages. If D chooses item
one, his obligation is extinguished. C is not liable for
damages.
ARTICLE 1201
The choice shall produce no effect except from the
time it has been communicated. ARTICLE 1204
The creditor shall have a right to the indemnity
Communication of notice: for damages when, through the fault of the
1. Effect of Notice Until the choice is made and debtor, all the things which are alternatively
communicated, the obligation remains alternative. the object of the obligation have been lost, or
a. Once the notice of election has been given to the compliance of the obligation has become
the creditor, the obligation ceases to be impossible.
alternative and becomes simple.
b. Such choice once properly made and The indemnity shall be fixed taking as a basis
communicated is irrevocable and cannot be the value of the last thing which disappeared,
renounced. or that of the service which last became
c. Where the choice has been expressly given to impossible.
the creditor, such choice shall likewise produce
legal effects upon being communicated to the Damages other than the value of the last thing
debtor. or service may also be awarded.
Alternative Facultative
Number of Several Only one is due Joint obligation
prestations prestations are although the - One where the whole obligation is to be paid or
due but debtor is fulfilled proportionately by the different debtors
compliance with allowed to and/or is to be demanded proportionately by the
one is sufficient substitute different creditors.
Right of choice May be given to Given only to
the creditor or the debtor Solidary obligation
third person - One where each one of the debtor is bound to
Loss through Does not Extinguished render, and/or each one of the creditors has a
fortuitous event extinguish the the obligation right to demand entire compliance with
obligation prestation.
Loss through Not liable; Liable
fault of debtor however, if the Joint obligations:
choice is given 1. There are as many debts as there are debtors;
to the creditor, 2. There are as many credits as there are creditors.
debtor will be 3. The debts/credits are considered distinct and
liable separate from each other.
Nullity of Does not Invalidates the 4. Each debtor is liable only for a proportionate
prestation invalidate the obligation part of the debt;
others 5. Each creditor is entitled only to a proportionate
part of the credit.
Debtor or Debtor is not
creditor shall bound to Presumption in Article 1208 is rebuttable.
choose from the choose
remainder substitute Article 1277. Confusion does not extinguish a joint
obligation except as regards the share corresponding to
the creditor or debtor in whom the two characters concur
ARTICLE 1212
ARTICLE 1217
Each one of the solidary creditors may do whatever
Payment made by one of the solidary debtors
may be useful to the others, but not anything which
extinguishes the obligation. If two or more
may be prejudicial to the latter.
solidary debtors offer to pay, the creditor may
choose which offer to accept.
Effects of Prejudicial Acts as to Creditors
- If the creditor does a thing that it is prejudicial
He who made the payment may claim from his co-
to the others, he will be liable for damages.
debtors only the share which corresponds to each,
- As for the debtors, the act shall be valid and
with the interest for the payment already made. If
binding.
the payment is made before the debt is due, no
interest for the intervening period may be
demanded.
ARTICLE 1213
A solidary creditor cannot assign his rights without
When one of the solidary debtors cannot, because of
the consent of the others.
his insolvency, reimburse his share to the debtor
Reason: Each creditor represents the others and the paying the obligation, such share shall be borne
assignee may not have the confidence of the by all his co-debtors, in proportion to the debt of
original solidary creditors considering that the each.
assignee after receiving payment may not give
the shares of the others.
ARTICLE 1218
- A solidary creditor who assigns his rights to another Payment by a solidary debtor shall not entitle him
without the consent of his co-creditors shall answer reimbursement from his co-debtors if such payment
subsidiarily for any prejudice caused to the is made after the obligation has prescribed or
latter by the assignee in connection with the credit. become illegal.
corresponding to them.
ARTICLE 1221
If the thing has been lost or their prestation has
Effect of extension of time given by creditor to a become impossible without the fault of the