article 1179 - 1192

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Section I.Pure and Conditional Obligations

ART. 1179. Every obligation whose performancedoes not depend upon a future or uncertain event, orupon a past event unknown to the parties, is

demandable at once.

Every obligation which contains a resolutorycondition shall also be demandable, without

prejudice to the effects of the happening of theevent. (1113)

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1. Pure Obligationwhen the obligation contain noterm or condition whatever upon which dependsthe fulfillment of the obligation contracted by thedebtor.

It is immediately demandable and there is nothing to

exempt the debtor from compliance therewith. ExampleGaya obliged herself to pay her loan of P1,000 to

Tito on demand.

Instances when obligations immediately demandable:

1. It is a pure obligation;2. It is subject to a resolutory condition;

3. It is subject to resolutory period.

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2. Conditional Obligationsone which is subject to a

condition of one whose performance depends upon afuture or uncertain events or upon past event unknown tothe parties.

ART. 1180. When the debtor binds himself to paywhen his means permits him to do so, the obligationshall be deemed to be one with the period, subject to

the provisions of article 1197.(n)

Example

A promissory note states that This is to acknowledgereceipt of sum of One thousand Six Hundred pesos (P1,

600.00) and I am to pay my debt to Arvin as soon aspossible or as soon as I have the money. It was held thatthe conditional obligation is void, because the collectionwould be impossible, the remedy of the creditor is to ask theCourt to fix the period of payment, thus, it becomes anobligation with a period.

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ART. 1181. In conditional obligations, the acquisition ofrights as well as the extinguishment or loss of those alreadyacquired, shall depend upon the happening of the eventwhich constitutes the condition. (1114)

ART. 1182. When the fulfillment of the condition dependsupon the sole will of the debtor, the conditional obligationshall be void. If it depends upon chance or upon the will of a

third person, the obligation shall take effect in conformity withthe provisions of this code. (1115)

ART. 1183. Impossible conditions, those contrary to goodcustoms or public policy and those prohibited by law shallannul the obligation which depends upon them. If theobligation is divisible, that part thereof which is not affected bythe impossible or unlawful condition shall be valid,

The condition not to do an impossible thing shall beconsidered as not having been agreed upon. (1116a)

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ART. 1184. The condition that some event happen at a

determinate time shall extinguish the obligation as soon asthe time expires or if it has become indubitable that theevent will not take place. (1117)

ART. 1185. The condition that some event will nothappen at a determinate time shall render the obligation

effective from the moment the time indicated has elapsed,or if it has become evident that the event cannot occur.

Ifnot time has been fixed, the condition shall bedeemed fulfilled at such time as may have probably been

contemplated, bearing in mind the nature of the obligation.(1118)

ART. 1186. The condition shall be deemed fulfilledwhen the obligor voluntarily prevents its fulfillment. (1119)

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Kinds or classifications of condition:1. Suspensive and Resolutory

Suspensivethe happening of the condition gives rise to an obligation.

Example:Maya binds herself to deliver a determinate car to Tito if he marries Gaya.The obligation is only demandable upon the happening of the conditionthat is, if Tito marries Gaya. The obligation is suspended and not yetdemandable.

Resolutorythe happening of the condition extinguishes the obligation alreadyexisting.

Example:Arvin binds himself to lend his only car to Ian until the latter passes the CPABoard. The obligation to lend is immediately demandable. Ians right overthe car is extinguished upon his passing the CPA board. Ian is now obligedto return the car.

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Kinds or classifications ofcondition:

2. Potestative, Casual and Mixed

Potestativeis one the fulfillment of which depends upon the sole will of the debtor. This kind ofcondition is void.

Example:

Arvin Promise to give his only parcel of land to Maya if he decides to leave for the UnitedStates.

Casual is one the fulfillment of which depends upon chance.

Example:Mario agrees to give Maria a determinate car if Marias only racing horse will win thesweepstake race.

Mixed is one which depends partly upon the will of third person and partly upon chance

Example:

Vincent promise to give Victor a new Toyota Car if Victor will be able to play with and beatKarpov in a game of chess. This is mixed condition, that is Karpov willingness to play chesswith Victor and the latters winning over Karpov.

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3. Possible and ImpossibleImpossible condition is divided into 2:

a) Physical Impossibilitythe condition imposed is not capable of beingperformed physically.

Example:Grace will give Christine a gold necklace if she swims across

the Pacific Ocean.

b) Illegal Impossibilitywhen the condition imposed is contrary to law, goodcustom or public policy.

Example:1. Contrary to lawPedro agrees to give Ernesto P100,000 if Ernesto

will kill Mario.2. Contrary to good custom Santos binds himself to give Maria a goldwrist watch if she will cohabit with Mr. Reyes without benefit ofmarriage.

3. Contrary to public policy Maria agrees to employ Grace in hercompany if Grace will not join a labor union.

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4. Positive and Negative:

A Negative condition is one where some event will not happen at adeterminate time, either

a.) the time indicated has elapsed; orb.) it has become evident that the event cannot

occur (Art. 1185, NCC)

Example:Victor will give Jason a car if he will not marry Helen until Dec.

19, 2001, if Jason has not married Helen until Dec. 19, 2001 or if Helen

has died within the prescribed time without having married to Jason,the obligation becomes demandable. If Jason married Helen withinthe prescribed time, the obligation of Victor is extinguished.

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5. Divisible and Indivisible

Divisiblethat part of obligation which is not affected by

impossible or unlawful condition shall be valid (Art. 1183,NCC)Example-X promise to pay Y the sum of P1, 000.00 if Y furnishes X withinformation as to the whereabouts of Z and another sum ofP2, 000.00 if Y kills Z. in the obligation, the first part (to pay P1,000.00) is valid while the second part (P2, 000.00) is void

because only the latter is affected by the condition.

6. Express and Implied

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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 mutuallycompensated. 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. (1120)

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Effects of conditional obligation to

give: Once the condition is fulfilled, the effects of the

conditional obligations shall retroact to the day ofthe constitution of the obligation and not on thedate when the condition was fulfilled.

Example

On Jan. 1, 1999 A agreed to give B a parcel of land ifhe passes the May, 1999 CPA exams. If B passes the

CPA exams in May, 1999, he is entitled to the landeffective Jan. 1, 1999 because Bs right over the landretroacts to the date when the obligation wasconstituted.

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As to the fruits and interestThe effect of conditional

obligation to give, as a rule, do not retroact to the date ofthe constitution of the obligation. The following rules shallgovern:

1. In reciprocal obligation (like a contract of sale) - the fruitsand interest during the pendency of the condition shall be

deemed to have been mutually compensated.

Example:

A agrees to sell and B agrees to buy As parcelof land if B passes the May, 1999 CPA exams. If B passes

the May, 1999 CPA Board, the obligation becomesdemandable. B is entitled to all the interests that hismoney (with which to pay A) may earn while A isentitled to the fruits which the parcel of land may

have produced during the pendency of thecondition.

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2. In unilateral obligationthe debtor shall appropriate

the fruits and interests received during the pendency

of the condition unless a contrary intention appears.

Example

X agreed to give Y a parcel of land if Ypasses the CPA Board in May, 1999 exams.Pending the happening of the condition, A isentitled to the fruits which the land may

produce, A will deliver only the parcel of land if thecondition is fulfilled, unless a contrary intentionappears.

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ART. 1188. The creditor may, before the fulfillment of the

condition, bring the appropriate actions for the preservation ofhis right.

The debtor may recover what during the same timehe has paid by mistake in case of a suspensive

condition (1121a)

Preservation of Creditors Right

The action for the preservation of the creditors rightmay have for their objectives:

1. To prevent the loss or deterioration of the things which arethe objects of the obligation by enjoining or restraining actsof alienation or destruction by the debtor himself or by thirdperson;

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2. To prevent concealment of the debtorsproperties which constitute the guaranty incase of non-performance of the obligation;

3. To demand security if the debtor becomesinsolvent;

4. To compel the acknowledgement of thedebtors signature on a private document orthe execution of proper public document forregistration so as to affect third person.

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5. To register the deeds of sale or mortgages;

6. To set aside fraudulent alienation made by thedebtor;

7. To interrupt the period of prescription by

actions against adverse possessors of thethings which are objects of the obligation.(Lawyers journal, 1951, p. 47)

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Paragraph I of the above article authorizes thecreditor to take any appropriate actions for thepreservation of creditors right during the pendency ofthe condition:

Example:

On Jan. 1, 1999, Raul obliged himself to sell a parcel ofland to Dennis if he passes the CPA exams in October,1999. From the time the obligation was constituted and

pending the happening of the condition (passing theCPA Exams) Dennis may cause the annotation of thecondition in the certificate of title in the Register of Deedswhere the land is located, to preserve his right over theparcel of land.

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Paragraph II in order that debtor may recover what he has paid

by mistake, during the pendency of the condition, the followingrequisites may be present:

1. The debtor paid the creditor before the fulfillment of thecondition;

2. Payment made by debtor was through mistake and error;

1. The action to recover what was paid by mistake should bemade before the fulfillment of the condition.

Example

Pedro obliged himself to pay Santos P20, 000 if a PAL plane

crashes at Cebu before Dec. 30, 1998. After the obligation wasconstituted and before Dec. 30, 1998, a plane crushed in Cebu.Pedro honestly and believing that the condition was fulfilled paidthe P20, 000 to Santos. It turned out however that it was a Cebuairline that crushed. Thus, Pedro may recover the amount paid toSantos by mistake for the reason that the condition has not yetbeen fulfilled.

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ART. 1189. When the conditions have been imposed with the

intention of suspending the efficacy of an obligation to give, thefollowing rules shall be observed in case of the improvement,loss or deterioration of the thing during the pendency of thecondition:

1) If the thing is lost without the fault of the debtor, the obligation shallbe extinguished.

2) If the thing is lost through the fault of the debtor, he shall be obligedto pay damages; it is understood that the thing is lost when itperishes, or goes out of commerce, or disappears in such a waythat its existence is unknown or it cannot be recovered;

3) When the thing deteriorates without the fault of the debtor, theimpairment 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 improvementshall inure to the benefit of the creditor;

6) If it is improved at the expense of the debtor, he shall have no otherright than that granted to the usufructuary.

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These rules apply only to obligation to give a determinate

or specific thing subject to a suspensive condition in caseof loss, deterioration or improvement of the thing.1. In case of loss of the thing

a) If the thing is lost without the fault of the debtor, theobligation shall be extinguished.

ExampleReyes obliged himself to give Santos a determinate car

if he passes the CPA Exams in Oct. the current year. If duringthe pendency of the condition the car was lost throughfortuitous event without the fault of Reyes, the obligation todeliver the car is extinguished even if the condition is fulfilled

later.

b) If the thing is lost through the fault of the debtor, he shall beobliged to pay damages. If in the example above, thespecific car was lost through the fault of Reyes, he shall beliable for damages upon the fulfillment of the condition.

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It is understood that the thing is lost:a) When it perishes (as when a house is burnt to ashes)

a) When it goes out of commerce (as when the object

before is unprohibited becomes prohibited)

b) When disappears in such a way that its existence is

unknown (as when a particular car has been missing for

some time)

c) When it disappears in such a way that it cannot be

recovered (as when a particular diamond ring is

dropped in the middle of the Atlantic Ocean).

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2. When the thing deteriorates -a) When the thing deteriorates during the pendency of the

condition, without the fault of the debtor, the impairment isto be borne by the creditor.

Example

Arvin obliged himself to give Ian a determinate Toyota car if

Ian passes the October CPA Exams. During the pendencyof the condition, the car was partially damaged by flood,without the fault on the part of Arvin. If the condition isfulfilled, Ian will bear the impairment.

b) If the thing deteriorates, during the pendency of thecondition, through the fault of the debtor, the creditor maychoose, after the fulfillment of the condition, between therescission of the obligation or its fulfillment, with indemnityfor damages in either case.

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3. When the thing improved

a) If the thing improved during the pendency of thecondition, by its nature, or by time, the improvement shall

inure to the benefit of the creditor. The reason for this is tocompensate the creditor who would suffer in case, insteadof improvement, there would be deterioration without thefault of the debtor.

b) If the thing is improved at the expense of the debtor, he

have no other right than that granted to the usufructuary.By us usufruct is meant the right to enjoy the property ofanother which includes the right to enjoy and use the fruitsof the property.

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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 improvementof the thing, the provisions which, with respect to thedebtor , are laid down to the preceding article shallbe applied to the party who is bound to return.

As for obligations to do or not to do, theprovisions of the second paragraph of article 1187shall be observed as regards the effect of theextinguishment of the obligation. (1123)

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Effects When Resolutory Condition

is fulfilled1. The obligation is extinguished. (Art. 1181, NCC)2. Because the obligation is extinguished and considered to have had no

effect, the parties should restore to each other what they have received.3. The fruits and interests thereon should also be returned after deducting of

course the expenses made for the production, gathering and

preservation, if any.4. The rules given in Art. 1189, N CC will apply to whoever has the duty to

return in case of loss, deterioration or improvement of the thing.5. 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 theCPA Exams on May, this year. B did not pass the CPA Exams. Theobligation is extinguished and therefore, it is as if there was neveran obligation at all. B will therefore have to return both the landand the fruits he had received there from the moment A has givenhim the land.

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ART. 1191. The power to rescind obligatios isimplied in reciprocal ones, in case one of the obligorsshould not comply with what is incumbent upon him.

The injured party may choose between thefulfillment and the rescission of the obligation, with the

payment of damages in either case. He may alsoseek rescission, even after he has chosen fulfillment, ifthe later 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, inaccordance with articles 1385 and 1388 and the

Mortgage Law.

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Right to Rescind

The right to rescind means the right to cancel or toresolve in case of reciprocal obligation in case ofnon-fulfillment on the part of one.

Example:In a contract of sale, the buyer can rescind if the sellerdoes not deliver or te seller can rescind if the buyer doesnot pay.

The power to rescind is given to the injured party andthe injured party has the following alternativeremedies:

1. Demand fulfillment of the obligation plus damages; or2. Demand rescission of the obligation plus damages.

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ART. 1192. In case both parties have committed abreach of the obligation, the liability of the first infractorshall be equitably tempered by the courts. If it cannotbe determined which of the parties first violated thecontract, the same shall be deemed extinguished, and

each shall bear his own damages.

Rules if Both Parties Have Committed a Breach

The above rules are deemed just. The first one is fairto both parties because the second infract or, thoughthey would derive some advantage by his ownact or neglect. The second rule is likewise just,because it is presumed that both parties at aboutthe same time tried to reap some benefits. (Report ofthe Code Commission)

article 1179 - 1192

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