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 b) Impossible not capable of fulfillment
fulfullment, 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
contracting parties person (a) and (b)

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

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

7) As to divisibility:
a) Divisible susceptible of partial b) Indivisible not susceptible of partial
performance 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
its 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 Xs 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 Xs 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: Ill 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 its 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 debtors fault obligation is extinguished

2) Loss of thing through debtors fault debtor will be entitled to damages
3) Deterioration of thing without the debtors fault debtor will have to pay for
damage
4) Deterioration of thing through debtors 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 plaintiffs 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 defendants 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