Section 1 - Pure and Conditional Obligation

• A pure obligation is one which is not subject to any condition and no specific date is mentioned for its fulfillment and is, therefore, immediately demandable.

  A conditional obligation is one whose consequences are subject in one way or another to the fulfillment of a condition.
• Condition is a future and uncertain event
• Kinds of Condition

  
  

  1. Suspensive - the happening of which gives rise to the obligation
  2. Resolutory - demandable at once but the happening of an event extiguishes the obligation
  3. Potestative -a condition that depends upon the will of contracting parties
  4. Casual - depend upon chance or will of a third person
  5. Mixed - depends partly upon the will of the parties and partly upon chance or upon the will of third person.
• Potestative Condition

  • On part of the debtor

  1. If suspensive - void
  2. If resolutory - valid

  • On the part of creditor -Valid wether suspensive or resolutory
• 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. (1113)
• 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. (n)
• When is an obligation demandable at once

  ·         When it is pure

  ·         When it is subject to a resolutory condition

  ·         When it is subject to a resolutory period
• 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. (1114)
• 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. (1115)
• 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. (1116a)
• 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. (1116a)
• 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. (1117)
• Positive condition – refers to the fulfillment of an event or performance of an act.

  Negative condition – refers to the non-fulfillment or non-performance of an act.
• 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. (1118)
• ART. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment. (1119)
• ART. 1187. The effects of a conditional obligation to give, once the condition has been fulfi lled, 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.
• ART.1187 (2) 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)
• 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. (1121a)
• 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 condition:

   (1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;
• 1189 (2)  (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 fulfi llment, with indemnity for damages in either case;
• 1189 (3) (5) If the thing is improved by its nature, or by time, the improvement shall inure to the benefi t 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)
• ART. 1190. When the conditions have for their purpose the extinguishment of an obligation to give, the parties upon the fulfillment of said conditions, shall return to each other what they have received.

   In case of the loss, deterioration or 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 Article 1187 shall be observed as regards the effect of the extinguishment of the obligation. (1123)
• 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.
• The injured party may 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.
• 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.
• 1191 (2)  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)
• 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 damages. (n)
• RIGHTS OF THE PARTIES BEFORE FULFILLMENT OF CONDITION

  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. (Article 1188)

  The condition shall be deemed fulfilled when the obligor yoluntarily prevents its fulfillment. (Article 1186)
• EFFECT OF FULFILLMENT OF CONDITION

  General rule: 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.
• Exceptions:

  There shall be no retroactive effect with respect to the fruits and interests as follows:

  1. In reciprocal obligations, the fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated
  2. In unilateral obligations, the debtor keeps the fruits and interests received before the fulfillment of the condition.
• RULES IN CASE OF LOSS, DETERIORATION OR IMPROVEMENT OF DETERMINATE THING BEFORE THE FULFILLMENT OF THE CONDITION

  1. Loss of the thing-

  a.Without debtor's fault- Obligation is extinguished

  b. Through debtor's fault- Debtor is obliged to pay damages

  2. Deterioration of the thing

  Without debtor's fault- The impairment shall be borne by the creditor

  With debtor's fault- The creditor may choose between;

  1. Rescission, plus damages, and

  2. Fulfillment, plus damages
• RULES IN CASE OF LOSS, DETERIORATION OR IMPROVEMENT OF DETERMINATE THING BEFORE THE FULFILLMENT OF THE CONDITION3. Improvement of the thing

  At the expense of the debtor-he shall have no other right than that granted to the usufructuary

  By nature or by time- The improvement shall inure to the benefit of the creditor
• Rules in case of fulfillment of resolutory condition

  1. Upon the fulfillment of the resolutory condition, the obligation is extinguished.
  2. The parties shall return to each other what they have received.
  3. In case of loss, deterioration or improvement of the thing, the provisions in the above rule, which pertain to the debtor shall be applied to the party who is bound to return.