Classification

of
Obligations
Classification of
Obligations
• Primary classification of obligations under the Civil Code:
– Pure a n d conditional obligations (Articles 1179-1192);
– Obligations with a period (Articles 1193-1198);
– Alternative (1199-1205) a n d facultative obligations (Article
1206);
– Joint a n d solidary obligations (Articles 1207-1222);
– Divisible a n d indivisible obligations (Articles 1223-1225); a n d
– Obligations with a penal clause (Articles 1226-1230)

• Secondary classification of obligations under the Civil

Code:
– Unilateral a n d bilateral obligations (Articles 1169-1191);
– Real a n d personal obligations (Articles 1163-1168);
– Civil a n d natural obligations (Articles 1423); a n d
– Legal, conventional, a n d penal obligations (Articles 1157,
1159, 1161)
 ART. 1179. Every obligation
whose performance does not
depend upon a future or
uncertain event, or upon a past
event unknown to the parties, is
demandable at once.
Every obligation which
contain a resolutory condition
shall also be demandable,
without prejudice to the effects
of the happening of the event.
(Art. 1179, N C C )
Pure Obligation- one without a condition or a term
(hence, demandable at once, provided there will b e
no absurdity).
Examples:
a.I promise to p a y you P1million (This is
demandable at once, unless period was really
intended, as when a loan has just been contracted,
or when some time is reasonably necessary for the
actual fulfillment of the obligation, as when a person
binds himself to p a y immediately for the subscription of
corporate share of stock.

b.“I’ll p a y you P1million o n demand”. But

instant perform a n ce is not a necessity, otherwise
absurd consequen c es will arise.
[Link] the original period or condition has
 Condition is a future a n d uncertain event,
u p on the happening of which, the effectivity or
extinguishment of a n obligation (or right) subject to it
depends.

Characteristic of a condition
1. Future and uncertain – In order to constitute a n event
as a condition, it is not enough that it b e future; it
must also b e uncertain. The first paragraph of Article
1179 obviously uses the disjunctive or between
future a n d uncertain to distinguish pure obligation
from both the conditional obligation a n d one with
a period. Be that as it may, the word or should b e
and.
2. Past but unknown – a c o ndition ma y refer to a past
event unknown to the parties. (infra) If it refers to a
future event, both its very o ccurrence a n d the time
 2 Principal Kinds of
1.
Condition
Suspensive condition (condition precedent or
condition antecedent) or one the fulfillment of
which will give rise to a n obligation (or
right). In other words, the demandability of the
obligation is suspended until the happening of
the uncertain event which constitutes the
condition.

Example:
I will sell you the land if it is adjudicated to m e
in
the division of my d e c e a s e d father’s estate. M y
obligation is demandable only after the condition
is fulfilled – my becoming the owner of the land. In
the meantime, I a m not liable to you.
2. Resolutory condition (condition subsequent) or
one the fulfillment of which will extinguish a n
obligation (or right) already existing.

Example:
“Dong binds himself to give Casy P1
thousand monthly allowance until Casy
graduates from
college.”

Dong’s obligation is demandable now

but it shall b e extinguished or terminated
upon the happening of the resolutory
condition – Casy’s graduating from college.
 Distinctions between suspensive
and resolutory
conditions
The difference between the two conditions is very
clear: both bear a n influence on the existence of the
obligation, but in diametrically op p osed manner.

1. If the suspensive condition is

fulfilled, the obligation arises, while if it
is the resolutory condition that is
fulfilled, the obligation is extinguished.
2. If the first does not take place,
the tie of the law (juridical or legal
tie) does not appear, while if it is
the other, the tie of the law is
consolidated.

3. Until the first takes place, the

existence of the obligation is a
mere hope, while in the second,
its effects flow, but over it hovers
the possibility of termination.
 When obligation is demandable
at once
A n obligation is demandable at o n c e –

1. When it is pure. (Art. 1179, par. 1, N C C )

2. When it is subject to a resolutory condition (Ibid.,

par. 2)

3. When it is subject to a resolutory period (Art. 1993,

par 2.)
 Past event unknown to
the parties
A conditi on really refers only to a n uncertain a n d future event. A past
event ca n n o t b e said to b e a conditi on since the demandability of a n obligati on
subject to a conditi on d e p e n d s u p o n whether the event will h a p p e n or will not
happen.

What is really co nte m p l ated b y the law is the kn owle d ge to b e

acquired in the future of a past event which a t the moment is unknown to the
parties interested, for it is only in that sense that the event c a n b e d e e m e d
uncertain. This kn o wle d ge determines whether the obligati on will arise or not
 ART. 1180. When the
debtor binds himself to pay
when his means permit him
to do so, the obligation
shall be deemed to be one
with a period, subject to
theprovisions of article
1197. (Art. 1180, N C C )
Where duration of period depends upon the will of
the debtor?

A period is 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. – the
obligation shall b e d e e m e d to b e
one with a period. In this case,
what depends upon the debtor’s
will is not whether he should p a y or
not for indeed he binds himself to
p ay. What is left only to his will is
the duration of the period. If the
debtor a n d the creditor cannot
agree as to the specific time for
payment, the court shall fix the
same on the application of either
[Link] cases. – As when the debtor binds
himself to pay:
a. “little by little”(Scone v. Francisco, 24 Phil.
309.)
b. “as soon as possible” (Gonzales v Jose, 66
Phil. 369.)
c. “from time to time”
d.“at any time I have the money” (Soriano v.
Abalos, 84 Phil. 206.)
e.“in partial payments” (Levy Hermanos v.
Paterno, 18 Phil. 353.)
f.“when I a m in a position to pay” (see Luding
Hahn v Lazatin, 105 Phil. 1358)
 ART. 1182. When the
fulfillment of the condition
depends upon the sole will 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 effect in
conformity with the provisions
of this Code. (Art. 1182, N C C )
 This article deals with
three kinds of
Conditions
a. Potestative – depends on the exclusive
will of one of the parties. (this is also
called facultative condition)

b. Casual– depends on c h a n c e O R
upon the will of the third person. [If I
win the lotto. (valid)]
A. Potestative on the part of the DEBTOR
[Link] also suspensive – both the
condition a n d the obligation are VOID,
for the obligations is really illusory.

2. If also resolutory – valid

[Link] on the part of the

CREDITOR- VALID
 ART. 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, that 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. (Art.
1183, N C C )
Two kinds of
impossible
conditions
[Link] impossible conditions – when
they, in nature of things, cannot exist or
cannot b e done.

Examples:
a.“I will p a y you P1 thousand if it will not rain
for one year in the Philippines.”
b. “I will p a y you P1 thousand if you c a n carry
20cavans of palay on your shoulder.”
2. Legally impossible conditions – when they are
contrary to law, morals, g o o d customs, public
order, or public policy.

Examples:
Xander will give Agnes P1 thousand if A g n e s —
a. Will kill Barney (against the law)
b. Will b e the common-law wife of Xander (against
morals)
c. Will slap her father (against g o o d customs)
[Link] publicly advo c at e the overthrow of the
government (against public order)
[Link] not appear as a witness against Xander in a
criminal case (against public policy)
 Effect of Impossible
Conditions
1. Conditional obligation void– Impossible conditi ons annul the obligati on
w h i c h d e p e n d s u p o n them. Both the obligati on a n d the conditi on a re void.
The re a s o n b e h i n d the law is that the obligor knows his obligati on c a n n o t
b e fulfilled. H e h a s n o intention to c o m p l y with his obligati on.
[Link] obligation valid– If the condition is
negative,
that is, not to d o a n impossible thing, it is
disregarded a n d
the o b ligation is rendered pure a n d valid. Actually,
the
condition is always fulfilled when it is not to d o a n
impossible thing so that it is the same as if there
were no condition.

Examples:
a.“I will sell you my land if you d o not carry 20
cavans of palay on your shoulder”
b.“I will sell you my land if you d o not give m e a
d o g that talks.”

The obligations are pure and,

3. Only the affected obligation void – If the
obligation is divisible, the part thereof not
aff ected by the impossible condition shall be
valid.
Example:
“ I will give you P5,000 if you sell my land, a n d a
car, if you kill Pedro”

The obligation to give P5,000 is valid

but the obligation to give a car is void
beca u se it is dependent upon a n impossible
condition.
4. Only the condition void – If the
obligation is a pre existing
obligation, and, therefore, does
not d e p e n d upon the
fulfillment of the condition
which is impossible, for its
existence, only the condition is
void.
 ART. 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. (Art. 1184, N C C )
Positive (Suspensive) Condition – the
happening of a n event at a
determinate time. The obligation is
extinguished:

a. As soon as the time expires without

the event taking place; or

b. As soon as it has become

indubitable that the event will not
take place although the time specified
has not expired.
 Exampl
Xand e r obliges himself to g ive Barney P10,000 if
e Barney will
marry Charley before Barney reaches the a g e of 23.

[Link] is liable if Barney marries Charley before he

reaches the a g e of 23.

b. Xander is not liable if Barney marries Charley at the a g e

of 23 or
after he reaches the a g e of 23. In this case, the time
specified, before
reaching the a g e of 23, has expired without the condition
(marrying
Charley) being fulfilled. The obligation is extinguished as
soon as Barney becomes 23 y/o.

c. If Barney dies at the a g e of 22, without having married

Charley, the
 ART. 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
 Exampl
e Harry binds himself to give Ron P10,000 if Ron is
not yet married to Hermione on December 30.

[Link] is not liable to Ron if Ron marries Hermione on

December 30 or prior thereto.

b. Harry is liable to Ron if on December 30, Ron is not married to

Hermione a n d if Ron marries Hermione after December 30. In
the latter
case, the condition (not marryin g Hermione) is fulfilled
upon the expiration of the time indicated, which is
December 30.

c. Suppose Hermione dies on November 20 without

having been
married to Ron. The obligation is rendered effective
because it is certain
 ART. 1186. The condition
shall be deemed fulfilled
when the obligor voluntarily
prevents its fulfillment. (Art.
1186, N C C )
 There are three requisites for
the application of this article:

1. The condition is suspensive

[Link] obligor actually prevents the fulfillment
of the condition
3. He acts voluntarily

The law does not require that the obligor

acts with malice or fraud as long as his
purpose is to prevent the fulfillment of the
condition. He should not b e allowed to profit
from his own fault or b a d faith.
 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 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
1. In obligation to give – a n obligation to give
subject to a suspensive condition becomes
demandable only upon the fulfillment of the
condition. However, o n c e the condition is
fulfilled, its effects shall retroact to the d a y when
the obligation was constituted. (par. 1; see
Enriquez v Ramos, 73 S C RA 116.)
The reason is becau se the condition is
only a n accidental element of a contract. (see
Art. 1318) A n obligation c a n exist without being
subject to a condition. Ha d the parties known
beforehand that the condition would b e
fulfilled they would have bound themselves
under a pure obligation. Hence, the obligation
should b e considered from the time it is
constituted a n d not from the time the condition
2. In obligation to do or not to do – with
respect to the retroactive effect of the
fulfillment of a suspensive condition, in
obligations to d o or not to do, no fixed rule
is provided.
This does not mean, however, that in these
obligations the principle of retroactivity is
not applicable. The courts are empowered
by the use of sound discretion a n d
bearing in mind the intent of the parties, to
determine, in e a c h case, the retroactive
effect of the suspensive condition that has
been complied with. It includes the power
to decide that the fulfillment of the
condition shall have no retroactive effect or
from what date such retroactive effect
 ART. 1188. The creditor
may, before the fulfillment of
the condition, bring the
appropriate actions for the
preservation of his right.
The debtor may recover
what during the same time he
has paid by mistaken in case
of a suspensive condition. (Art.
1188, N C C )
 Rights of the
Creditor
He ma y take or bring appropriate actions
for the preservation of his right, as the debtor
m a y render nugatory the obligation upon the
happening of the condition. Thus, he m a y g o to
court to prevent the alienation or concealment of
the property of the debtor or to have his right
annotated in the registry of property. The rule in
paragraph one applies by analogy to
obligations subject to a resolutory condition. (see
Art.
1190, par. 1)
Right of the Debtor

He is entitled to recover what he

has paid by mistake prior to the
happening of the suspensive condition.
This right is granted to the debtor
because the creditor m a y or m a y not
b e able to fulfill the condition imposed
a n d hence, it is not certain that the
obligation will arise. This is a case of
solutio indebiti which is based on the
p rinciple that no one shall enrich himself
at the expense of another.
 ART. 1189. When the
conditions have been imposed
with the intention of
suspending the effi cacy of an
obligation to give, the
following rules shall be
observed in case of the
improvement, loss or
deterioration of the thing
during the pendency of the
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 the
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 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. (Art. 1189, N C C )
Requisites for Application of Article
1189
Article 1189 applies only if:

1. The obligation is a real obligation

2. The object is in a specific or determinate
thing
3. The obligation is subject to a
suspensive conditions
4. The condition is fulfille d
5. There is loss, deterioration, or
improvement of
the thing during the pendency of
Rules in case of
loss,
deterioration, or
improvement of
thing during
pendency of
suspensive
condition
1. Loss of thing without debtor’ fault
Example:
Francis obliged himself to give
Paul his car worth P100,000 if Paul will
sell Francis’ property. The car was lost
without the fault of Francis.
The obligation is extinguished
a n d Francis is not liable to Paul even if
Paul sells the property. A person,
as a general rule, is not liable for a
fortuitous event. (Art. 1174)
2. Loss of thing through debtor’s fault

Example:
In the same example, if the loss occurred
because of the negligence of Francis, Paul will
b e entitled to d e m a n d d a m a g e s (Art. 1170) i.e.,
P100,000 plus incidental damages, if any.
3. Deterioration of thing without debtor’s fault – A thing deteriorates when
its value is reduced or impaired with or without the fault of the debtor.

Example:
If the car figured in a n accident, as a result of
which its windshield was broken a n d some of its paints
were scratched a w a y without the fault of Francis, thereby
reducing its value to P90,000, Paul will have to suffer the
deterioration or impairment in the amount of P10,000. (Art.
1174, N C C )
4. Deterioration of thing through debtor’s
fault
Example:
In this case, B ma y choose
between:
a. Rescission (or cancellation) of the
obligation with damages; in this
case, Francis is liable to p a y Paul
P100,000, the value of the car
before its deterioration plus
incidental d a m a g e s, if any
b. Fulfillment of the obligation also with
damages. In this case, Francis is
5. Improvement of thing by nature or by time – A thing
is improved when its value is increased or
enhanced by nature or by time or at the
expense of the debtor or creditor. (see Art.
1187, N C C )

Example:
Suppose the market value of car
increased, who gets the benefit?
The improvement shall inure to the
benefit of Paul. In as much as Paul would suffer
in case of deterioration of the car through a
fortuitous event, it is but fair that he should b e
compensated in case of improvement of the
car instead.
6. Improvement of thing at the expense of debtor

Example:
During the pendency of the
condition, Francis h a d the car painted
a n d its seat cover c h a n g e d at his
expense.
In this case, Francis will have the
right granted to a usufructuary with
respect to improvements m a d e on
the thing held in usufruct.
 ART. 1190. When the condition 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 obligations to do and 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.
(Art. 1190, N C C )
 Effects of fulfillment of
resolutory condition
1. In obligation to give – when the resolutory condition in
a n obligation to give is fulfilled, the obligation is
extinguished (Art. 1181.) a n d the parties are obliged to
return to e a c h other what they have received under the
obligation. There is a return to the status quo. In other
words, the effect of the fulfillment of the condition is
retroactive. But in case the thing to b e returned is legally
in the possession of a third person who did not act in b a d
faith, the remedy of the party entitled to restitution is
against the other.
 The obligation of mutual
restitution applies not only to
the thing received but also to
the fruits a n d interests. In
obligations to give subject to
suspensive condition, the
retroactivity admits exceptions
according as the obligation is
bilateral or unilateral.
 The reason for the
difference is quite plain. The
happening of the suspensive
condition gives birth to the
obligation. O n the other hand,
the fulfillment of the resolutory
condition produces the
extinguishment of the obligation
as through it h a d never existed.
The only possible exception is
when the intention of the parties
is otherwise.
2. In obligation to do or not to
do – In such obligations, the
courts shall determine the
retroactive effect of the
fulfillment of the resolutory
condition as in the case where
the condition is suspensive.
(Art. 1187, par. 2) The courts in
the exercise of the discretion
m a y even disallow
retroactivity, taking into
 ART. 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 chosen 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
Kinds of obligation
according to the person
obliged.
1. Unilateral – when only one
party is obliged to comply with
a prestation.

Examples:
Donation; in a contract of loan,
the lender has the obligation to give.
After the lender has complied with
his obligation, the debtor has the
obligation to pay.
 2. Bilateral – when both parties are mutually
bound to e a c h other. In other words, both
parties are debtors a n d creditors of e a c h other.
Bilateral obligations m a y b e reciprocal or non-
reciprocal.
a. Reciprocal obligations are those which arise from the s a m e c a u s e
a n d in which e a c h party is a debtor a n d creditor of the other, such that the
performance of o n e is designed to b e the equivalent a n d the conditi on for the
performance of the other. E a c h party m a y treat the fulfillment of what is
incumbent u p o n the other as a suspensive conditi on to his obligati on (see Art.
1169, last par.) a n d its n o n fulfillment, as a tacit or implied resolutory condition,
giving him the right to d e m a n d the rescission of the contract.
Remedies in reciprocal obligations
In case one of the obligors does not
comply with w h at is incumbent upon him, the
a g g rieved party nay choose between two
remedies:

1. Action for specific performance (fulfillment)

of the obligation with damages.

2. Action for rescission of the obligation also

with damages.
 The principal action for rescission for
non- performance under Article 1191
must b e distinguished from the subsidiary
action for rescission by reason of lesion or
d a m a g e under Article 1318, et seq., a n d
from cancellation of a contract based, for
example, on defect in the consent a n d
not on violation by a party of his
obligation. Article 1191 governs where
there is non-compliance by one of the
contracting parties in case of reciprocal
obligations. The remedy is granted for
breach by the other contracting party
 ART. 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
 Exampl
e Simon sold his television set to Barbie. The
agreement is that set shall b e delivered on October 1
at the house of Barbie a n d payment shall b e m a d e
by Barbie upon delivery.
Simon did not deliver the set on October 1 in
spite of the
d e m a n d m a d e by Barbie. Five days later,
Simon delivered the set but Barbie incurred in delay in
paying the purchase price.
In suit between Simon a n d Barbie, the
liability of Simon for d a m a g e s should b e equitably
tempered by the court, taking into consideration
the breach also of the obligation on the part of
Barbie.

If both allege d that the other was the first

Obligations with period
 ART. 1193. Obligations for
whose fulfillment a day has
been fixed, shall be
demandable only when that
day comes.
Obligations with a
resolutory period take effect
at once, but terminate upon
arrival of the day certain.
 A day certain is understood
to be that which must
necessarily come, although it
may not be known when.
If the uncertainty consists in
whether the day will come or not,
the obligation is conditional, and
it shall be regulated by the rules
of the preceding section. (Art.
1193, N C C )
M e a n i n g of Obligation with a
Period
A n obligation with a period is
one whose consequences are
subjected in one way or another to the
expiration of said period of term.
Meaning of Period or
TermA period is a future a n d certain event
upon the arrival of which the obligation (or
right) subject to it either arises or is
terminated. It is a d a y certain which must
necessarily c o m e (like the year 2013; next
Christmas), although it m a y not b e known
when, like the death of a person. (Art.
1193, par. 3.)
Period a n d Condition distinguished
1. As to fulfillment. – A period is a certain event which
must h a p p e n sooner or later at a d ate known
beforehand, or at a time which ca n n o t b e determined, while a c o nditio n
is a n uncertain event.
2. As to time. – A period refers only to the future, while a
conditi on m a y refer also to past event unknown to the parties.
3. As to influence on the obligation. – A period merely
fixes the tome for the effi caciousness of the obligation.
If suspensive, it ca n n o t prevent the birth of the
obligati on in d u e time; If resolutory, it d o e s not
invalidate the fact that the obligati on existed. O n the
other hand, a conditi on causes a n obligati on either to arise or to cease.
Period a n d Condition
distinguished
4. As to effect, when left to debtor’s will. –
A period which
depends upon the will of the debtor empowers the court
to fix the duration thereof. (Art. 1197, par. 2), while a
condition which depends upon the sole will of the debtor
invalidates the obligation (Art. 1182)
3. As to retroactivity of effects. – unless.– Unless there is
a n agreement to the contrary, the arrival of a
period does not have any retroactive effect, while
the happening of a condition has retroactive
effect.
 Like a condition (see Art.
1183), a period must b e
possible. If the period is
impossible (e.g., February 30
because it will never come;
construction of a building
within 24hrs because it is too
short), the obligation is void.
Kinds of Period or Term

[Link] to effect:
[Link] period (ex die). – The
obligation begins only from a d a y
certain upon the arrival of period. (Art.
1183, par. 1)
[Link] period (in diem). – The
obligation is valid up to a d a y certain
a n d terminates upon arrival of the
period.
Kinds of Period or Term

[Link] to source:
[Link] period. – When– When
it is provided for by laws.
[Link] or voluntary
period. – When it is agreed to by
the parties. (Art. 1196, N C C )
[Link] period. – When it is fixed by
the court.(Art. 1197, N C C )
Kinds of Period or Term
[Link] to definiteness:
[Link] period. – When it is fixed
or it is known when it will come. (Art.
1193, par. 1, N C C )
[Link] period. – When it is not
fixed or it is not known when it will
come. Where the period is not fixe d but
a period is intended, the courts are
usually empowered by law to fix the
same. (see Art. 1197, N C C )
 ART. 1194. In case of
loss, deterioration or
improvement of the
thing before the arrival
of the day certain, the
rules in Article 1189
shall be observed. (Art.
1194, N C C )
Note

The effect of loss, deterioration, or improvement before

arrival of period was discussed in the previous slides.
(see slides on Art.
1189)
 ART. 1195. Anything
paid or delivered before
the arrival of the period,
the obligor being unaware
of the period or believing
that the obligation has
become due and
demandable, may be
recovered, with the fruits,
and interests. (Art. 1195,
Payment before arrival period
Article 1195 applies only to obligation to
give.
It is similar to Article 1188, paragraph 2, which
allows the recovery of what has been paid
by mistake before the fulfillment of a
suspensive condition.

The creditor cannot unjustly enrich

himself by retaining the thing or money
received before the arrival of the period.
Debtor presumed a w a re of period

The presumption, however, is that the debtor knew that the debt was
not yet due. He has the burden of proving that h e was u n awa re of the period.
Where the duration of the period d e p e n d s u p o n the will of the debtor (see Art.
1197, par 3), p ay m e nt b y him amounts, in effect, to his determination of the arrival
of the period.

The obligor m a y n o longer recover the thing or m o n e y o n c e the

period has arrived but h e c a n recover the fruits or interests thereof from the d ate
of premature performance to the d at e of maturity of the obligation.
Example:
Francis owes Paul P10,000 which was
supposed to b e paid on December 31 this year.
By mistake, Francis paid his obligation on
December 31 last year.
Assuming that today is June 30, Francis c a n
recover the P10,000 plus P600 which is the interest
for one half year at the legal rate of 12% or a
total of P10,600. But Francis cannot recover,
except the interest, if the debt h a d already
matured.
Neither c a n there b e a right to recovery if
Francis h a d knowledge of the period. The theory
under solutio indebiti obviously will not apply.
Francis is d e e m e d to have impliedly renounced
N o recovery in personal obligations

Article 1195 has no

application to obligations to d o or
not to d o because as to the
former, it is physically impossible to
recover the service rendered, a n d
as to the latter, as the obligor
performs by not doing, he cannot,
of course, recover what he has
not done.
 ART. 1196 Whenever in an
obligation a period is
designated, it 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
appear that the period has
been established in favor of
one or of the other. (Art. 1196,
NCC)
Presumption as to benefit of period

In a n obligation subject to a period

fixed by the parties, the period is presumed
to have been established for the benefit of
both the creditor a n d the debtor. This means
that before the expiration of the period, the
debtor m a y not fulfill the obligation a n d
neither m a y the creditor d e m a n d its fulfillment
without the consent of the other especially if
the latter would b e prejudiced or
inconvenienced thereby.
The presumption, of course, is
rebuttable.
Exceptions to the general rule

The tenor of the obligation or the

circumstances may, however, show that it was
the intention of the parties to constitute the
period for the benefit of either the debtor or
the creditor. The benefit of the period m ay b e
the subject of express stipulation of the parties.
Exceptions to the general rule

1. Term is for the benefit of the debtor alone. – He cannot b e

compelled to p a y prematurely, but he can, if he desires
to d o so.

Examples:
Kordell borrowed from Shane P1,000 to b e paid
within 1 year without interest.
In this case, the period of 1 year should b e
d e e m e d intended for the benefit of Kordell only.
Therefore, she c a n p a y any time but she cannot b e
compelled to p a y before 1 year.
Exceptions to the general rule
2. Term is for the benefit of the creditor. – He may d e m a n d
fulfillment
even before the arrival of the term but the debtor cannot require
him to a c c e pt payment before the expiration of the stipulated
period.

Example:
Jojo borrowed from Junjun P1,000 payable on December
31
with the stipulation that Jojo cannot make payment before the
lapse of the period but Junjun ma y d e m a n d fulfillment even
before said date.
Here, Junjun c a n d e m a n d payment at any time but Jojo
cannot shorten the one year period without the consent of
Junjun.
Ordinarily, there must b e a stipulation granting the benefit of the
Computation of term or period

When the laws speak of years, months, days or

nights, it shall b e understood that years are of 365 days
each, months of 30 days; days of 24hours; a n d nights
from sunset to sunrise.
If months are designated by their name, they shall
b e computed by the number of days which they
respectively have.
In computing a period, the first d a y shall b e
excluded, a n d the last d a y included.
If the last d a y is a Sunday or a legal holiday, the
time shall not run until the end of the next d a y which is
neither Sunday nor a holiday.
 ART. 1197. If the obligation does not
fix a period, but from its nature and the
circumstances it can be inferred that a
period was intended, the courts may fix the
duration thereof.
The courts shall also fix the duration
of the period when it depends upon the will
of the debtor.
In every case, the courts shall
determine such period as may under the
circumstances have been probably
contemplated by the parties. Once fixed by
the courts, the period cannot be changed by
them. (Art. 1197, N C C )
Court generally without power to fix a period

The period menti oned in the a b o v e provision refers to a judicial period

as distinguished from the period fixed b y the parties in their contract which is
known a s contractual period.

If the obligati on d o e s not state a period a n d n o period is intended, th e

court is not authorized to fix a period. The courts h a v e n o right to m a ke contracts
for the parties. (Tolentino v. Gonzalez, 50 Phil. 577)
Exceptions to the general rule

1. No period is fixed but a period was

intended.- The obligation does not fix a
period but it c a n b e inferred from its n a ture
a n d the circumstances that a period was
intended.

2. Duration of the period depends upon the

will of the debtor.
 ART. 1198. The debtor shall
lose every right to make use of
the period:
[Link] after the obligation has
been contracted, he becomes
insolvent, unless he gives a
guaranty or security for the debt;

[Link] he does not furnish to

the creditor the guaranties or
securities which he has promised;
 [Link] by his own acts he has
impaired said guaranties or securities
after their establishment, and when
through a fortuitous event they
disappear, unless he immediately gives
new ones equally satisfactory;

[Link] the debtor violates any

undertaking, in consideration of which
the creditor agreed to the period;

[Link] the debtor attempts to

abscond. (Art. 1198, N C C )
When obligation c a n b e
d e m a n d e d before lapse of
period The general rule is that the obligation
is not demandable before the lapse of the
period.
However, in any of the cases
mentioned in Article
1198, the debtor shall lose every right to
make use of the period, that is, the period is
disregard e d a n d the obligation becomes
pure and, therefore, immediately
demandable.
The exceptions are based on the fact
that debtor might not b e able to comply
with his obligation.
1. When debtor becomes insolvent. –

Example:

Dora owes Cris P1,000 due a n d payable

on Decembe r if Dora b e c o m es insolvent, say on
September 10, Cris c a n d e m a n d immediate
payment from Dora even before maturity unless
gives sufficient guaranty or security.
The insolvency in this case ne e d not b e
judicially declared. It is sufficient that the assets of
Dora are less than his liabilities or Dora is unable to
p a y his debts as they mature. Note that the
insolvency of Dora must occur after the obligation
has been contracted.
2. When debtor does not furnish guaranties or securities
promised.-
Example:

Suppose in the same

example, Dora promised to
mortgage his house to secure the
debt. If he fails to furnish said
security, he shall lose his right to the
period.
Examples: 3. When guaranties or securities given have been impaired or have
disappeared.-
If the debt is secured by a mortga g e on the house of Dora,
but the house was burned through his fault, the obligation also
b e co m e s d e m a n d a b le unless Dora gives a new security equally satisfactory.
In this case, the house n e e d not b e totally destroyed as it is
sufficient that the security b e impaired by the act of Dora. But in ca s e of fortuitous
event; it is required that the security must disappear.
If the security given deteriorates in such a manner as to
b e c o m e illusory, it must b e d e e m e d to h ave disappeared or lost as
contemplated in paragraph 3.
If the debt is secured by a bond, the failure of Dora to renew
the b o n d or replace it with a n equivalent guarantee upon its
expiration will likewise give Cris the right to d e m a n d immediate payment.
4. When debtor violates an
undertaking.

Example:

Now, suppose that Cris agreed

to the period in consideration on
the promise of Dora to repair the
piano of Cris. The violation of this
undertaking by Dora gives Cris the
right to d e m a n d immediate
5. When the debtor attempts to abscond.

Example:

Before the due date of the

obligation, Dora c h a n g e d her address
without informing Cris a n d with the
intention of escaping from her obligation.
This act of Dora is a sign of b a d faith which
results in the loss f his right to the benefit of
the period stipulated.
Observe that a mere attempt or
intent to a b s co n d is sufficient.