ARTICLE 1179

Every obligation whose performance does not depend upon a failure or uncertain event unknown to the parties, is
demandable at once.
Every obligation which contain a resulotory condition shall also be demandable, without prejudice to the effects of
the happening of the event (1113)

*Meaning of Pure Obligation: one which is not subject to any condition and no specific date is mentioned for its
fulfillment and is, therefore, immediately demandable.
*Meaning of Conditional Obligation: one whose consequences are subject in one way or another to the
fulfillment of a condition.

CONDITION

*Condition: is a future and uncertain event, upon the happening of which, the effectivity or extinguishment of an
obligation (or right) subject to it depends.

CHARACTERISTICS:

1) Future and uncertain

2) Past but unknown
*A condition must not be impossible

TWO PRINCIPLE KINDS OF CONDITION:

1) Suspensive condition (condition precedent or condition antecedent) – fulfillment of which will give rise to
an obligation or right
2) Resulotory condition (condition subsequent) – fulfillment of which will extinguish an existing obligation
or right

DISTICTION:
1) In suspensive obligation arises, in resulotory obligation is extinguished
2) If the first does not take place, the tie of the law (juridicial or legal tie) does not appear, while if it is the
other, the tie of law is consolidated; and
3) Until the first takes place, the existence of the obligation is a mere hope while the second, its effects
flow, but over it hovers the possibility of termination.

WHEN OBLIGATION IS DEMANDABLE AT ONCE

When –

1) When it is pure
2) When it is subject to a resulotory condition or
3) When it is subject to a resulotory period

PAST EVENT KNOWN TO THE PARTIES

Since a condition refers only to uncertain and future events, a past event cannot be a condition since the
demandability of an obligation subject to a condition depends on the event happening or not. The law
contemplates the knowledge to be acquired in the future of a past event which is at the moment i unknown to the
parties interested.
 ARTICLE 1180

When the debtor binds himself to pay his means permit him to do so, the obligation shall be deemed to be one with a
period, subject to the provisions of the article 1197. (n)

WHERE THE DURATION OF THE PERIOD DEPENDS UPON THE WILL OF THE DEBTOR

*Period: a future and certain event upon the arrival of which the obligation subject to it either arises or is
extinguished.

1) The debtor promises to pay when his means permit him to do so

*If the creditor and debtor cannot agree to a specific time of payment, the court shall fix the same on the
application of the other party. (Art. 1197, par. 2)
2) Other Cases – as when the debtor binds himself to pay:
a) Little by little
b) As soon as possible
c) From time to time
d) At any time I have the money
e) In partial payments
f) When I am in a position to pay

ARTICLE 1181

In conditional obligations, acquisitions of rights, as well as the extinguishment or loss of those already acquired shall
depend upon the happening of the event which constitutes the condition. (1114)

EFFECT HAPPENING OF CONDITION

Reiterates the distinction between a suspensive (antecedent) condition and a resolutory (subsequent) condition

1) Acquisition of rights – obligations subject to a suspensive condition, acquisition of rights by the creditor
depends upon the happening of the event which constitutes the condition. The efficacy or obligatory force
(as distinguished from demandability) is subordinate to the happening of a future and uncertain event. It
follows that if suspensive condition does not take place then it will not be fulfilled, the parties would stand
as in the conditional obligation had never existed. During pendency of a suspensive condition the creditor
only has hope of getting the right.
*Heir example: The fortune will be with H if T dies in two years, otherwise…

2) Loss of rights already acquired – In obligations subject to a resulotory condition, the happening of the
event it relation to the condition produces the loss of rights.
*Graduate example: after graduating then support given by Y to T is extinguished since Y is only obligated to
support T until he graduates.

ARTICLE 1182
 When the fulfillment of the obligation depends upon the sole of the debtor, the conditional obligation shall be void. If
it depends upon chance or upon the will of a third person, the obligation shall take conformity with the provisions of
this Code. (1115)

CLASSIFICATIONS OF CONDITIONS

1) As to effect:
a) Suspensive – rise of obligation b) Resolutory – extinguishment of obligation

2) As to form:
a) Express – clearly stated b) Implied – merely inferenced

3) As to possibility:
a) Possible – condition is capable of fulfullment, b) Impossible – not capable of fulfillment
legally and physically

4) As to cause or origin:
a) Potestative – depends b) Casual – depends upon c) Mixed – depends partly
upon will of one of the chance or will of a third upon chance and partly (a)
contracting parties person and (b)

5) As to mode:
a) Positive – consists in performance of act b) Negative – consists in omission of an act

6) As to numbers:
a) Conjunctive – several conditions, all must be b) Disjunctive – several conditions, only some or
fulfilled one must be fulfilled

7) As to divisibility:
a) Divisible – susceptible of partial performance b) Indivisible – not susceptible of partial
perfornmance
*Potestative Condition: a condition suspensive in nature and which depends upon the sole will of one of the
contracting parties

WHERE SUSPENSIVE CONDITION DEPENDS UPON WILL OF DEBTOR

1) Conditional obligation void – the potestative condition depends solely upon the will of the debtor, the
conditional obligation shall be void because its validity depends on the will of the debtor therefore cannot
be easily demanded. If the debtor does not fulfill the condition then he will not be held liable. No burden on
debtor and no juridicial tie is created.
*Example: I will pay you after said condition has been done or will be done

2) Only the condition void – if obligation is pre-existing and therefore does not depend for it’s existence
upon the fulfillment by the debtor of the potestative condition, only the condition is void leaving unaffected
the obligation itself. Condition not imposed on birth of obligation but on fulfillment.
*Example: D borrowed money from C payable within two months, D also promised to pay C after D sells his
car to which C agreed. Here, only the condition is void but not the pre-existing obligation of D to pay C

WHERE SUSPENSIVE CONDITION DEPENDS UPON WILL OF CREDITOR

If condition depends exclusively upon will of creditor, obligation is valid.
*Example: I will pay you my indebtedness upon your demand
The obligation does not become illusory. Normally, creditor is interested upon fulfillment of obligation
cccccccccbecause it is for his benefit. It is up to hime to enforce his right or not.

WHERE RESOLUTORY CONDITION DEPENDS UPON WILL OF DEBTOR

If condition is resolutory like the right to repurchase in a sale with pacto de recto, the obligation is valid though
fulfillment depends upon sole will of debtor. The fulfillment of the condition causes the extinguishment of rights
already(Art. 1181) gotten. Condition of debtor when condition is resolutory is the same as creditor when condition
is suspensive.

*Casual Condition: if suspensive condition depends on chance or on will of tihrd person, the obligation subject to
it is valid.
*Example: where S binds himself to sell his land to B if he wins a case pending before the supreme court.

*Mixed Condition: obligation is valid when suspensive condition depends partly upon chance and upon will of a
third person
*Example: X a building contractor binds himself to Y to repair at X’s expense if the building was damaged due to an
earthquake judged by a panel of arbritators that the construction contributed to the damage in anyway. Both
conditions must happen so that X’s obligation will arise.

WHERE SUSPENSIVE CONDITION DEPENDS PARTLY UPON WILL OF DEBTOR

Use of the word exclusive (now sole) makes it clear that conditional obligations whose fulfillment depends partly
on the will of the debtor and partly on the will of a third person or upon chance are perfectly valid however if
compliance of obligation still depends on the will of the debtor then obligation is void since fulfillment is optional
under the power of the debtor. Situation is the same if condition depends entirely upon will of debtor.

ARTICLE 1183

Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the
obligation which depends upon them. If the obligation is divisible, the part thereof which is not affected by the
impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be considered as not having been agreed upon. (1116a)

*This article refers to suspensive conditions. Only applies to cases where the impossibility already exisited at the
time the obligation was constituted. If impossibility arises after creation of obligation, Article 1266 governs.

TWO KINDS OF IMPOSSIBLE CONDITIONS

1) Physically impossible conditions

2) Legally imposible conditions

EFFECT OF IMPOSSIBLE CONDITIONS

 1) Conditional obligation void – impossible conditions annul the obligation which depends upon them
therefore both obligation and condition are void. Since the obligor knows the condition cannot be fulfilled,
the obligation will not be complied with
2) Conditional obligation valid – if condition is negative, that is, not to do an impossible thing, it is
disregarded and the obligation is rendered pure and valid. Condition is always fulfilled when it is not to do
an impossible thing so that it is the same as if there were no condition. The negative thing may not be to
give an impossible thing.
3) Only the affected obligation void – If obligation is divisible then part of obligation not affected by
impossible condition is valid.
*Example: I’ll give you 10,000php if you sell my land and a car if you kill Pedro. Valid to give 10,000 void to get
a car since it is dependent upon an impossible condition.
4) Only the condition void – if it is a pre-existing obligation therefore it does not depend upon fulfillment of
the condition which is impossible, for its existence, only the condition is void.
*Example: D borrowed 10,000php from C then later C agreed to kill X before D pays him. Condition to kill X is
void but not pre-exisiting obligation to pay C.

ARTICLE 1184

The condition that some event happen at a determinate time shall extinguish the obligation as soon as the time
expires or if it has become indubitable that the event will not take place. (1117)

POSITIVE CONDITION

This article refers to positive (suspensive) condition. Obligation is extinguished:

1) As soon as time expires without the event taking place

2) As soon as it has become indubitable that the event will not take place although the specific time has not
expired

ARTICLE 1185

The condition that some event will not happen at a determinate time shall render the obligation effective from the
moment the time indicated has elapsed, or if it has become evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled as such time as it may probably been contemplated,
bearing in mind the nature of the obligation. (1118)

NEGATIVE CONDITION

The above provision speaks of a negative condition. The obligation shall become effective and binding:

1) From the moment the time indicated has elapsed without the event taking place
2) From the moment it has become evident that the event cannot occur, although the time has not yet elapsed.
If no time fixed the circumstances shall be considered to arrive at intention of parties. This rule may be also
applied to a positive condition.
*Example: (both for 1185 and 1184) X binds himself to give B 10,000php to B if B not yet married to C on Dec.
30 but on dying example, 1184 extinguished obligation, 1185 obligation rendered effective

ARTICLE 1186
 The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment. (1119)

CONSTRUCTIVE FULFILLMENT OF SUSPENSIVE CONDITION

Requisites:

1) The condition is suspensive

2) The obligor actually prevents fulfillment of the condition
3) He acts voluntarily

The law does not require that the obligor acts with malice or fraud as long as the purpose is to prevent
fulfillment of condition. He should not be allowed to profit from his own fault or bad faith.
*Example: S promised to sell land to Y if Y borrows money from a certain bank, S later changes his mind and tell
the bank not to give a loan to Y. The condition is deemed complied with and liable to S and S should not act in bad
faith.

CONSTRUCTIVE FULFILLMENT OF RESOLUTORY CONDITION

This article applies also to an obligation subject to a resolutory condition with respect to the debtor who is bound
to return what he has received upon the fulfillment of the obligation.
*Example: X obliges himself to occupy house of Y in Manila as long as X is assigned by their company to this particular
province then X is transferred to Manila.

ARTICLE 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 about the parties, the
fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated. If the
obligation is unilateral, the debtor shall appropriate the fruits and interests received, unless from the nature and
circumstances of the obligation it should be inferred that the intention of the person constituting the same was
different.

In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of the condition
that has been complied with. (1120)

RETROACTIVE EFFECTS OF FULFILLMENT OF SUSPENSIVE CONDITION

1) In obligations to give – An obligation to give subject to a suspensive condition is only demandable when
obligation is fulfilled, then the effects of fulfillment will retroact to the day the obligation was constituted.
*Because condition is only accidental
2) In obligations to do or not to do – there is no fixed rule provided, however, this does not mean that
principle of retroactivity is not applicable. Courts are empowered by sound discretion and bearing in mind
intent of parties to determine retroactive effect of suspensive condition that has been complied with. It
includes when retroactive effect takes or does not take place

RETROACTIVE EFFECTS AS TO FRUITS AND INTERESTS IN OBLIGATIONS TO GIVE

 1) In reciprocal obligations – No retroactivity because fruits and interest received during the waiting period
of the condition are mutually compensated. This is necessary for convenience since the parties would not
have to render mutual accounting of what they have received. (Fruits: natural, industrial or civil)
*Example: any fruit that was born before the specified time of condition may not be given and receiver is not
obliged to pay legal interests on the price since fruits received are deemed to have been mutually compensated
2) In unilateral obligations – Usually no retroactive effect since gratuitous. Debtor receives nothing from
creditor thus fruits and interests belong to debtor (unless from nature, and if inferred that intention of the
person consulting the same was different)
*Example: Debtor has the right to keep the fruits of his delivery if he received it during pendency of condition
unless a contrary intention was inferred

ARTICLE 1188

The creditor may, before fulfillment of condition, may bring appropriate actions for the preservation of his right.
The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition.
(1121a)

RIGHTS PENDING FULFILLMENT OF SUSPENSIVE CONDITION

1) Rights of creditor – He may bring appropriate actions for the preservation of his right as debtor may
render nugatory the obligation upon happening of condition. He may go to court to prevent concealment of
property or to have his right annotated in the registry of property.
2) Rights of debtor – He is entitled to recover what he has paid by mistake due to the suspensive condition.
This right is granted to the debtor because the creditor may not be able to fulfill the condition and therefore
it is not certain that obligation will arise. (Solutio Indebti – no one shall enrich himself for the benefit of
another)

ARTICLE 1189

When the conditions have been imposed with the intention of suspending the efficacy of an obligation to give, the
following rules shall be observed in case of the improvement, loss or deterioration of one thing during the pendency of
the condition:

1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;
2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is understood that the
thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence is
unknown or it cannot be recovered;
3) When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor;
4) If it deteriorates through the fault of the debtor, the creditor may choose between the rescission of the
obligation and its fulfillment with indemnity for damages in either case;
5) If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor;
6) If it is improved at the expense of the debtor, he shall have no other right than that granted to the usufructuary.
(1122)

REQUISITES FOR APPLICATION OF ARTICLE 1189

Only applicable if:

1) Obligation is a real obligation;

2) The object is a specific thing;
3) The obligation is subject to suspensive conditions;
4) The condition is fulfilled; and
5) There is loss, deterioration, or improvement of the thing during the pendency of the condition

KINDS OF LOSS

Loss in civil law may be:

1) Physical loss
2) Legal loss – when a thing goes out of commerce or it becomes illegal
3) Civil loss – a thing disappears in a way that its existence is unknown (lost dog) or cannot be recovered,
whether it’s a matter of fact (ring dropped at sea) or law (property is lost through prescription).

RULES IN CASE OF LOSS, DETERIORATION, OR IMPROVEMENT OF THING DURING PENDENCY OF

SUSPENSIVE CONDITION

1) Loss of thing without debtor’s fault – obligation is extinguished

2) Loss of thing through debtor’s fault – debtor will be entitled to damages
3) Deterioration of thing without the debtor’s fault – debtor will have to pay for damage
4) Deterioration of thing through debtor’s fault – in rescission/cancellation, pay value of thing plus
incidental damages. In fulfillment of obligation with damages, pay for damages plus incidental damages
5) Improvement of thing by nature or by time – creditor will benefit improvement
6) Improvement of a thing at expense of debtor – debtor will have right granted to a usufructuary with
respect to the improvements he made on the thing held in usufruct.
*Usufruct – right to enjoy fruits of a thing belonging to another

ARTICLE 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 loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are laid
down in the preceding article shall be applied to the party who is bound to return.

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

EFFECTS OF FULFILLMENT OF RESOLUTORY CONDITION

1) In obligations to give – when the resolutory condition on an obligation to give is fulfilled, the obligation is
extinguished and the parties are obliged to return to each other what they have received under obligation.
Includes fruits and interests
*Example: borrows car to go to province, return car when back in city

2) In obligations to do or not to do – Courts shall determine the retroactive effect of the fulfillment of the
resolutory condition as in case where condition is suspensive.
 APPLICABILITY OF ARTICLE 1189 TO PARTY WITH OBLIGATION TO RETURN

If X is the debtor and Y is the creditor, pending fulfillment of resolutory condition is the fulfillment of provision
given by Y of X. Upon the happening of the condition, X becomes creditor with a right to demand the obligation and
Y to fulfill the obligation.
Happening of a resolutory condition has same effect on creditor as the happening of a suspensive condition has on
the debtor – an obligation arises. Fulfillment of resolutory condition turns creditor into debtor and vice versa.

ARTICLE 1191

The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with
what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission even after he has chose fulfillment, if the latter should become
impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance
with Articles 1385 and 1388 and the Mortgage Law. (1124)

KINDS OF OBLIGATION ACCORDING TO THE PERSON OBLIGED

1) Unilateral - only one party is obliged to comply with a prestation

2) Bilateral - when both parties are mutually bound to each other; both are debtors and creditors

Reciprocal Obligations:
o Arise from the same cause and in which each party is a debtor and creditor of each other
o Fulfillment of other's obligation = suspensive condition tohis obligation
o Non-fulfillment of other's obligation = resolutory condition
o Gives him right to demand rescission of contract non-reciprocal Obligations
o Do not impose the simultaneous performance of both parties
o Performance of one is not dependent on simultaneous performance of the other

REMEDIES IN RECIPROCAL OBLIGATIONS

o Choice of remedies - in case one of the obligors does not comply

1) Action for specific performance (fulfillment) with damages
2) Action for rescission of obligation with damages
3) Remedy of rescission for non-compliance - remedy is granted because of the breach by other
contracting party

COURT MAY GRANT GUILTY PARTY TERM FOR PERFORMANCE

o Court shall order rescission claimed unless guilty party needs a default period or term to fulfill obligation
o Applies when guilty party needs time to perform, not when he doesn't want to perform

REMEDIES ARE ALTERNATIVE

Injured party can only choose one remedy

Exception: can choose rescission after asking fulfillment, if fulfillment
becomes impossible, but once rescission is chosen, can't ask for
fulfillment

LIMITATIONS ON RIGHT TO DEMAND RESCISSION - NOT ABSOLUTE

o Resort to the courts

o Refers to judicial rescission
o Injured party must go to the courts
o Can't decide by themselves
o Power of court to fix period
o Court has decision over giving guilty party a period wherein he can perform obligation
o Depends on circumstances
o Hindi sinadya ng debtor na hindi magawa
o Right of third person
o Rescission is not available if subject of obligation is in the hands of third person who didn't do anything
wrong
o Substantial violation
o Rescission will not be granted for slight breaches of contract
o Substantial enough as if it defeats the purpose of agreement
o Waiver of right
o Right to rescind may be waived, expressly or impliedly

RESCISSION WITHOUT PREVIOUS JUDICIAL DECREE

o Where automatic rescission expressly stipulated

o Parties can, sa start pa lang, already agree that if there is a violation, cancel agad ng contract; no need for
court
o Needs at least written notice to other party
o Extrajudicial rescission - party does not oppose
o If opposed, court needed to settle where contract still executory
o One has not performed, but the other is ready and willing to comply
o Willing party may declare rescission
o No need for stipulation in contract
o If such action is opposed by other party, go to the courts

*Example: The remedy of “rescission” is not confined to the rescissible contracts enumerated under Article 1381.
Article 1191 of the Civil Code gives the injured party in reciprocal obligations, such as what contracts are
about, the option to choose between fulfillment and “rescission.” Arturo M. Tolentino, a well-known authority
in civil law, is quick to note, however, that the equivalent of Article 1191 in the old code actually uses the term
“resolution” rather than the present “rescission.” The calibrated meanings of these terms are distinct.

“Rescission” is a subsidiary action based on injury to the plaintiff’s economic interests as described in Articles 1380
and 1381. “Resolution,” the action referred to in Article 1191, on the other hand, is based on the defendant’s breach of
faith, a violation of the reciprocity between the parties. As an action based on the binding force of a written contract,
therefore, rescission (resolution) under Article 1191 prescribes in 10 years. Ten years is the period of prescription of
actions based on a written contract under Article 1144.

The distinction makes sense. Article 1191 gives the injured party an option to choose between, first, fulfillment
of the contract and, second, its rescission. An action to enforce a written contract (fulfillment) is definitely an
“action upon a written contract,” which prescribes in 10 years (Article 1144). It will not be logical to make the
remedy of fulfillment prescribe in 10 years while the alternative remedy of rescission (or resolution) is made
to prescribe after only four years as provided in Article 1389 when the injury from which the two kinds of
actions derive is the same.
 ARTICLE 1192

In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably
tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be
deemed extinguished, and each shall bear his own damages. (n) 

WHERE BOTH PARTIES ARE GUILTY OF BREACH

1) First infractor known – one party violated his obligation therefore the other party also violated part of his
obligation. Liability of first infractor must then be reduced
2) First infractor cannot be determined – One party committed violation towards his obligation followed
by another, indeterminate first infractor. Contract shall then be diminished and both parties will have ot
bear their own damages