Article 1179-1230 - OBLICON PDF

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CHAPTER THREEDIFFERENT KINDS OF OBLIGATIONSSec. 1. - Pure and Conditional ObligationsArt. 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 contains a resolutory condit...

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CHAPTER THREE DIFFERENT KINDS OF OBLIGATIONS

Conditional Obligation - one whose effectivity is subordinated to the fulfillment or non-fulfillment of a future and uncertain act or event.

Sec. 1. - Pure and Conditional Obligations

Is a past event unknown to the parties be considered as a condition? According to Sir Ulan, quoting Tolentino, a past event cannot be “future and uncertain”, which are the elements of a condition, and thus cannot be one. What can be a condition is the future knowledge or proof of a past event unknown to the parties, but NOT the event itself. Thus the contract or obligation arises, not when the event happened or the fact came into existence, which would be in the past, but when the proof of such fact or event is presented, which would be in the future.

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 contains a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event. Pure Obligation- one whose effectivity or extinguishment does not depend upon the fulfillment or non-fulfillment of a condition or upon the expiration of a term or period. Elements: a) Not subject to a condition b) Not subject to a term  Characterized by the quality of immediate demandability, but there must be a reasonable period of grace.  *Immediate demandability: It does not mean outright but speaks of a reasonable time; depends on the nature and complexity of the obligation.  Simple Obligation does not equal to pure Obligation. Former speaks of an obligation with only one prestation, while the latter speaks of an obligation that does not depend on a condition or period. Obligations that are immediately demandable: 1. Pure obligations (Art 1179) 2. Obligations with resolutory condition (Art. 1179, par.2) 3. Obligations with resolutory period (Art. 1193, par.2) 4. Obligations with a condition not to do an impossible thing (Art. 1183, par.2) 2 Types of Events: 1. Condition – a future and uncertain event upon which the acquisition and resolution of rights is made to depend by those who execute the juridical act Characteristics: • Future • Uncertain – may or may not happen • Possibility 2. Term/Period – an interval of time, which, exerting an influence on an influence on an obligation as a consequence of a juridical act, either suspends its demandability or produces its extinguishment. Characteristics: • Future • Certain although not known when it will happen **Suspensive Condition and Term – Happening of which will arise to acquisition of rights **Resolutory Condition and Term – Happening of which will result to the extinguishment of an obligation

Example: I will give you P50,000 if you could prove that Rizal returned to the Catholic Church before he died. Classification of Conditions: 1. Suspensive or Resolutory  Suspensive – when the fulfillment of the condition results in the acquisition of rights arising out of the obligations.  Resolutory – when the fulfillment of the condition results in the extinguishment of rights arising out of the obligation. 2. Potestative, Casual, or Mixed  Potestative – when the fulfillment of the condition depends upon the will of a party to the obligation.  Casual – when the fulfillment of the condition depends upon chance and/or upon the will of a third person  Mixed – when the fulfillment of the condition depends partly upon the will of a party to the obligation and partly upon chance and/or will of a third person 3. Possible or Impossible  Possible – when the condition is capable of realization according to nature, law, public policy or good customs  Impossible – when the condition is not capable of realization according to nature, law, public policy or good customs

4. Positive or Negative  Positive – when the condition involves the performance of an act  Negative – when the condition involves the omission of an act. 5. Divisible or Indivisible  Divisible – when the condition is susceptible of partial realization  Indivisible – when the condition is not susceptible of partial realization 6. Conjunctive or Alternative  Conjunctive – when there are several conditions, all of which must be realized  Alternative – when there are several conditions, but only one must be realized 7. Express or Implied  Express – when the condition is stated expressly  Implied – when the condition is tacit 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 the provisions of Article 1197.

 Should the debtor bind himself to pay when his means permit him to do so, the obligation is one with a period and not subject to a condition  Since the duration of the period is left to the discretion of the debtor, it is subject to 1197 or where the courts shall fix the duration of the period by which he shall pay the obligation. Thus in cases falling under this article, creditor should file an action to fix a period for the payment of the obligation. Indications of a term or period: When the debtor binds himself to pay – • when his means permit him to do so • little by little • as soon as possible • from time to time • as soon as I have the money • in partial payment • when in the position to pay

Art. 1181. In conditional obligations, the acquisition 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.

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. 2 kinds of Potestative: • simple potestative condition – presupposes not only a manifestation of will but also the realization of an external act e.g. “if you sell your house”; “If I go to Madrid, I promise to sell you my house”. •

purely potestative condition1 – depends solely and exclusively upon the will

e.g. “if I like it” or “if I deem it proper”; “I promise to sell you my house on such date if I deem it convenient.” Note: Simple potestative condition approaches very well the nature of a mixed condition. (Caguioa) Hence, it is valid. Purely or strict potestative condition on the other hand destroys the efficacy of the legal tie. Note that it is only when the potestative condition depends exclusively upon the will of the debtor that the conditional obligation is void. (Tolentino)  Simple potestative – valid;  purely potestative (creditor)– valid; purely potestative (debtor) - void a) Potestative on the part of the Creditor - if the fulfillment of the condition is dependent upon the sole will of the creditor the obligation is VALID

Suspensive Condition precedent

Resolutory Condition subsequent

Results in the acquisition of Results in the extinguishment of rights arising out of the rights arising out of the Potestative Casual obligations Mixed obligations fulfillment of the condition the fulfillment of the fulfillment of the of The happening the condition The happening of depends obligation depends condition depends obligation gives birth to the obligation. extinguishes obligation upon the will of a upon chance/or upon the will of a party effective and and the willtheof immediately a to the obligation party not todemandable the upon until without prejudice happening of the which demandable, partly upon chance thirdevent person obligations to and/or the will happening of the constitutes the condition of a third resolutory person. condition If the condition is not E ffulfilled, f e c t s If the condition is not fulfilled, no juridical tie is created. juridical relation is consolidated. obligation The obligation and the dependent on the The is acquired obligee What is acquired the What condition shallby the take and thebycondition creditor: the constitution of the obligee in and the shall constitution of in effect. (valid and take effect. condition obligation are rights that are the obligation (valid is only mereand enforceable) obligation, hope and enforceable) expectancy, subject to threat or danger of VALID extinction. protected by law. dependent on the debtor: - condition and Art. obligation, VOID 1182. (suspensive) When Exception: the - condition and obligation, VOID (resolutory)

Example: I will give you a car on the condition that you go to Baguio on or before Dec 10, 1965. b) Potestative on the part of the Debtor i) Suspensive condition: - If a suspensive condition is solely dependent upon the will of the debtor, the obligation is VOID. Example: I’ll give you a diamond ring if I go to Tokyo this year. ii) Resolutory condition: -A condition which is both potestative and resolutory is VALID, even though the fulfillment of the condition is dependent upon the will of the debtor Example: I’ll give you a car until I return from Baguio.

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 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. 1

Referred to by Caguioa as strict potestative

Possible conditions – those which are valid and allowed by law; proper conditions. Impossible conditions – contrary to good customs or public policy or prohibited by law. 2 kinds: 1. Physically impossible – when the realization of the event constituting the condition is incompatible with or contrary to nature. 2. Juridically impossible – when contrary to law, morals, good customs, and public policy. * Illicit conditions – those which tend to restrain or fetter the exercise of those rights or powers arising from the natural or civil liberties of man * Immoral conditions – those which tend to compel a person to execute an act contrary to good customs. Note: In the case of illicit and immoral conditions, the illicit act provided for in the contract must refer to that of one of the parties but not where the illicit act is the act of a third person. The illicit character of the act is not determined by the act or fact in itself, but by its effects upon one of the parties. Applicability: The article applies only to contracts. It has no application to gratuitous obligation (simple and remuneratory donations and testamentary dispositions). Effects: 1. Impossible condition on obligation to give/to do (positive & suspensive)  obligation is annulled Example: I’ll give you P40,000 if you go to the moon this year.

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 event cannot occur. If no time has been fixed, the condition shall be deemed fulfilled at such time as may have probably been contemplated, bearing in mind the nature of the obligation. Positive conditions – those that depend on the fulfillment of an event. Negative conditions – those which depend on the non-happening of an event.  If the condition is positive (that an event should occur within a determinate period, the obligation is extinguished from the moment the period lapses or it has become indubitable that the event will not take place. Example: I’ll give you a car if you marry X on or before Dec 10, 1992. My obligation to give the car is extinguished if on Dec 11, 1992 X is still single or if before Dec 10, 1992 X dies, because by then it is evident that you can no longer marry X.  If the condition is negative (that some event would not happen within a determinate time), the obligation becomes effective from the moment the period lapses, or if it has become evident that the event cannot occur. Example: I’ll give you my car if you do not marry X on or before Dec 10, 1992. If on Dec 11, 1992 you have not married X, you can demand delivery of the car. If X dies before Dec 11, 1992 you can, on the death of X demand delivery of the car without waiting for Dec 11, 1992, because it is evident that you can no longer marry X.

2. Impossible condition on obligation not to do  obligation is void (deemed not having been agreed upon); hence obligation remains valid & subsequent => becomes pure and simple

Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.

Example: D obliged himself to give C P40,000 if C does not go to the moon this year.

Constructive Fulfillment of Conditions If the debtor prevents the creditor from fulfilling the condition of the obligation, the condition is deemed fulfilled and the obligation demandable.

*Impossible condition imposed on gratuitous obligation:  condition is deemed not imposed; hence obligation is valid and becomes pure and simple Requisites for the nullity of an obligation with impossible conditions: 1. Conditions are positive and suspensive 2. Obligation is a contract 3. Impossibility exists at the time of the creation of the obligation 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.

It is essential that the obligor must have actually prevented the obligee from complying and that it must have been voluntary and willful. Requisites: 1. Condition is suspensive 2. Debtor actually prevents the fulfillment of the condition 3. He acts voluntary/intention Example: Dean Ulan will give Anjo P50,000 if Dean Ulan and Dean Jara will run around the campus. If only Dean Jara only ran, Art 1186 will apply UNLESS if it was not Dean Ulan’s intention and fault not to run.

*Underlying principle: A party to a contract may not be excused from performing his promise by the non-occurrence of an event which he himself prevented. Exception: • If in preventing the fulfillment of the condition the debtor acts pursuant to a right, the condition will NOT be deemed fulfilled. Applicable to: • Suspensive and potestative (creditor) • Suspensive and casual • Suspensive and mixed 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 recompensated. 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. Retroactive effects of fulfillment of suspensive condition (1) In obligations to give- An obligation to give subject to a suspensive condition becomes demandable only upon the fulfillment of the condition. However, once the condition is fulfilled, its effects shall retroact to the day when the obligation was constituted. When is an obligation constituted? When the essential elements which give rise thereto concur. Condition is not an essential element; it is only an accidental element of the obligation. The reason is because the condition is only accidental element of a contract. An obligation can exist without being subject to a condition. Consequently, once the event which constitutes the condition is fulfilled thus resulting in the effectivity of the obligation, its effects must logically retroact to the moment when the essential elements which gave birth to the obligation have taken place and not to the moment when the accidental element was fulfilled. *Note:applicable only to consensual contracts (perfected upon meeting of the minds) and not to real contracts(perfected by delivery) (2) In obligations to do or not to do- No definite rule. The courts are empowered by the use of sound discretion and bearing in mind the intent of the parties, to determine in each 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 shall take effect. Retroactive effects as to fruits and interests in obligations to give • In reciprocal obligations-No retroactivity since the fruits and interests are deemed to have been mutually compensated.

Example: On Jan 10, 1992 D obliged himself to give C a certain ricefield and C agreed to give D a certain fishpond provided X passes the CPA examinations. If X passes the CPA exam on Aug 10, 1992, C is obliged to deliver the fishpond to D and D is obliged to deliver the ricefield to C. However D is not obliged to deliver the fruit of the ricefield to C. Neither is C required to give the fruits of the fishpond to D. • In unilateral obligations- There is usually no retroactive effect because they are gratuitous. The debtor receives nothing from the creditor. Thus, fruits and interests belong to the debtor unless from the nature and other circumstances of the obligation it should be inferred that the intention of the person constituting the same was different. Example: On Jan 10, 1992 D obliged himself to give C a certain ricefield provided C passes the CPA exams. If on Aug 10, 1992 C passes the CPA exams, D obliged to deliver the ricefield to C but not the fruits received from Jan 10, 1992

Exceptions to the rule of retroactivity: 1. Real contracts 2. Successive contracts (those contracts whose fulfillment is realized within a period of time; e.g. contract of lease, contract of labor, life annuities) Reason for retroactivity: The condition is only accidental, not essential element of the obligation. Limitation of Retroactivity Effect:  If thing is lost through fortuitous event, debtor suffers the loss because he is still the rightful owner. (basis: Art. 1164 -- ownership or personal right is only vested upon delivery)

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 mistake in case of a suspensive condition. Rights pending fulfillment of suspensive condition (1) Rights of creditor- He may take or bring appropriate actions for the preservation of his right, as the debtor may render nugatory the obligation upon the happening of the condition. • Action for prohibition restraining the alienation of the thing pending the happening of the suspensive condition; • Action to demand security if the debtor has become insolvent; • Action to set aside alienations made by the debtor in fraud of creditors; • Actions against adeverse possessors to interrupt the running prescriptive period; • To have the rights annotated in the registry. (2) Rights of the debtor- He is entitled to recover what he has paid by “mistake” prior to the happening of the suspensive condition.

Art. 1188, par. 1- Protection for the creditor – file an injunction to stop the debtor – does not necessarily always involves court action in spite the wordings of the law. i.e. registration

Art. 1188, par. 2- protection for the debtor Obligation subject suspensive condition

to Obligation period/term

subject

There is no certainty if the It is certain obligation will be fulfilled obligation will demandable enforceable.

to

that the be fully and

Interests and fruits shall also Interests and fruits shall also be delivered when the debtor be delivered when the debtor paid/delivered by paid/delivered by mistake. mista...