PURE AND CONDITIONAL OBLIGATION

Floriano vs Delgado
11 Phil 154, August 27, 1908
Torres, J.

Facts:

On February 17, 1907, Floriano filed a complaint against Delgado and

Bertumen, alleging that the latter were indebted to the plaintiff in the sum of
P1,352.80, who engaged to pay it together with interest at the rate of ten
percent per annum, as appears in their promissory note on January 20, 1907.
The said amount was not paid, not withstanding demand. Thus constitute
this case.

Issue:

Whether or not the obligation contracted by both parties are pure obligation.

Held:

Yes. In accordance with the old laws in force in the Islands prior to the
enactment of the present Civil Code, when an obligation is pure, simple and
unconditional and no particular day has been fixed for its fulfillment payment
payment of the same may be demanded ten days after it is contracted.

TRILLANA VS QUEZON COLLEGES

GR No. L-5003, June 27, 1953
Paras, J.

FACTS:
On June 1, 1948, Damasa Crisostomo applied for 200 shares of
stock worth PhP100.00 each at Quezon Colleges, Inc. Within her letter of
application, she stipulated, “You will find (Babayaran kong lahat
pagkatapos na ako ay makapag-pahuli ng isda) pesos as my initial
payment and the balance payable in accordance with law and the rules and
regulations of the Quezon College.” Damasa died on October 26, 1948.
Since no payment was rendered on the subscription made in the foregoing
letter, Quezon College presented a claim of PhP20,000.00 on her intestate
proceedings. The petitioner – administrator of the estate then contests the
validity of said proceedings?

ISSUE:
Is the condition laid down by Damasa Crisostomo valid?

RULING:
There is nothing in the record to show that the Quezon College,
Inc. accepted the term of payment suggested by Damasa Crisostomo, or
that if there was any acceptance the same came to her knowledge during
her lifetime. As the application of Damasa Crisostomo is obviously at
variance with the terms evidenced in the form letter issued by the Quezon
College, Inc., there was absolute necessity on the part of the College to
express its agreement to Damasa's offer in order to bind the latter.
Conversely, said acceptance was essential, because it would be unfair to
immediately obligate the Quezon College, Inc. under Damasa's promise to
pay the price of the subscription after she had caused fish to be caught.
Thus, it cannot be said that the letter ripened into a contract.

Indeed, the need for express acceptance on the part of the

Quezon College, Inc. becomes the more imperative, in view of the proposal
of Damasa Crisostomo to pay the value of the subscription after she has
harvested fish, a condition obviously dependent upon her sole will and,
therefore, facultative in nature, rendering the obligation void. Under the
Civil Code it is provided that if the fulfillment of the condition should depend
upon the exclusive will of the debtor, the conditional obligation shall be
void.

Ernest Berg vs. Magdalena Estate, Inc.

G.R. No. L-3784, October 17, 1952
Bautista Angelo, J.

FACTS:
The complaint avers that plaintiff and defendant are co-owners of
said property, the former being the owner of one-third interest and the latter
of the remaining two-thirds. The division is asked because plaintiff and
defendant are unable to agree upon the management of the property and
upon the partition thereof.

Defendant answered setting up a special defense and

counterclaim. As a special defense, defendant claims that on September
22, 1943, it sold to plaintiff one-third of the property in litigation subject to
the express condition that should either vendor or vendee decide to sell his
undivided share, the party selling would grant to the other party first an
irrevocable option to purchase the same at the seller’s price. It avers that
in January 1946, plaintiff fixed the sum of P200, 000 as the price of said
share and offered to sell it to defendant, which offer was accepted and for
the payment of said price plaintiff gave defendant a period of time which,
including the extensions granted would expire on May 31, 1947. Defendant
claims that in spite of its acceptance of the offer, plaintiff refused to accept
the payment of the price, and for this refusal defendant suffered damages
in the amount of P100, 000. For these reasons, defendant asks for specific
performance.

ISSUE:
Whether or not the obligation is one subject to a term.
HELD:
The obligation is rather subject to a condition. Under Article 1125
of the old Civil Code, obligations with a term, for the fulfillment of which a
day certain has been fixed, shall be demandable only when the day arrives.
A day certain is understood to be that which must necessarily arrive, even
though it is not known when. In order that an obligation may be with a
term, it is, therefore, necessary that it should arrive, sooner or later;
otherwise, if its arrival is uncertain, the obligation is conditional.

Viewing in this light the clause on which defendant relies for the
enforcement of its right to buy the property, it would seem that it is not a
term, but a condition. Considering the first alternative, that is, until
defendant shall have obtained a loan from the National City Bank of New
York, it is clear that the granting of such loan is not definite and cannot be
held to come within the terms “day certain.” And if it is considered that the
period given was until such time as defendant could raise money from
other sources, then it is also to be indefinite and contingent, and so it is
also a condition and not a term within the meaning of the law. In any event,
it is apparent that the fulfillment of the condition contained in this second
alternative is made to depend upon defendant’s exclusive will, and viewed
in this light, the plaintiff’s obligation to sell did not arise, for, under article
1115 of the old Civil Code, “when the fulfillment of the condition depends
upon the exclusive will of the debtor the conditional obligation shall be
void.”
 Felipe Agoncillo vs. Crisanto Javier
G.R. No. L-12611, August 7, 1918
38 Phil 124
Fisher, J.

FACTS:

On February 27 1904, Anastasio Alano, Jlose Alano and Florencio

Alano executed in favor of the plaintiff, Dra. Marcela Marino a document
stipulating that the Alanos as testamentary heirs of deceased Rev.
Anastacio Cruz, would pay the sum of P2, 730.50 within one (1) year with
interest of 12 percent per annum representing the amount of debt incurred
by Cruz. Moreover, the agreement provided that the Alanos are to convey
the house and lot bequeathed to them by Cruz in the event of failure to pay
the debt in money at its maturity.

No part of interest or principal due has been paid except the sum of
P200 paid in 1908 by Anastacio Alano. In 1912, Anastasio died intestate.
On August 8, 1914, CFI of Batangas appointed Crisanto Javier as
administrator of Anastasio’s estate. On March 17, 1916, the plaintiffs filed
the complaint against Florencio, Jose and Crisanto praying that unless
defendants pay the debt for the recovery of which the action was brought,
they be required to convey to plaintiffs the house and lot described in the
agreement, that the property be appraised and if its value is found to be
less than the amount of the debt, with accrued interest at the stipulation
rate, judgment be rendered in favor of the plaintiffs for the balance.

ISSUE:
The issue is whether or not the agreement that the defendant-
appellant, at the maturity of the debt, will pay the sum of the money lent by
the appellees or will transfer the rights to the ownership and possession of
the house and lot bequeathed to the former by the testator in favor of the
appellees, is valid.

HELD:
This stipulation is valid because it is simply an alternative
obligation, which is expressly allowed by law. The agreement to convey the
house and lot on an appraised value in the event of failure to pay the debt
in money at its maturity is valid. It is simply an undertaking that if debt is not
paid in money, it will be paid in another way. The agreement is not open to
the objection that the agreement is pacto comisorio. It is not an attempt to
permit the creditor to declare the forfeiture of the security upon the failure of
the debtor to pay at its maturity. It is simply provided that if the debt is not
paid in money, it shall be paid by the transfer of the property at a valuation.
Such an agreement unrecorded, creates no right in rem, but as between
the parties, it is perfectly valid and specific performance by its terms may
be enforced unless prevented by the creation of superior rights in favor of
third persons.

The contract is not susceptible of the interpretation that the title to

the house and lot in question was to be transferred to the creditor ipso facto
upon the mere failure of the debtors to pay the debt at its maturity. The
obligations assumed by the debtors were in the alternative, and they had
the right to elect which they would perform. The conduct of parties shows
that it was not their understanding that the right to discharge the obligation
by the payment of the money was lost to the debtors by their failure to pay
the debt at its maturity. The plaintiff accepted the payment from Anastacio
in 1908, several years after the debt matured.

It is quite clear therefore that under the terms of the contract, and
the parties themselves have interpreted it, the liability of the defendant as
to the conveyance of the house and lot is subsidiary and conditional, being
dependent upon their failure to pay the debt in money. It must follow
therefore that if the action to recover the debt was prescribed, the action to
compel a conveyance of the house and lot is likewise barred, as the
agreement to make such conveyance was not an independent principal
undertaking, but merely a subsidiary alternative pact relating to the method
by which the debt must be paid.