CHAPTER 3

Section 2: Different Kinds of Obligations

ART.1193. Obligations for whose fulfillment a day certain 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 preceeding section.

 Period - a certain length of time w/c determines the effectivity or the extinguishment of obligations.
 Period VS. Condition
a) In their fulfillment - A condition is an uncertain event; but a period is an event w/c must happen
sooner or later, at a date known beforehand, or a time w/c cannot be determined.
b) With reference to time - A period always refers to the future, a condition may under the law refer
even to the past.
c) As to influence on the obligation - A condition causes an obligation to arise or to cease, but a
period merely fixes the time or the efficaciousness of an obligation. It is true that a period may
have a suspensive or resolutory effect, but in the former, it cannot prevent the birth of the
obligation in due time, and in the latter, it does not militate against existence.

 Different Kinds of Terms or Periods

A.
1. Definite - the exact date or time is known and given
2. Indefinite - something that will surely happen, but the date of happening is unknown (as in the
case of death)
B.
1. Legal - a period granted under the provisions of the law
2. Conventional or Voluntary - period agreed upon or stipulated by the parties
3. Judicial - the period or term fixed by the courts for the performance of an onligation or for its
termination.

C.
1. Ex die - a period w/ a suspensive effect. Here, the obligation begins only from the day certain, in
other words, upon the arrival of the period.
Example of an onligation with a period Ex Die
"I will support you, beginning the first day of the next year." Here, the obligation only becomes
effective on yhe day stipulated.
2. In diem - a period or term with a resolutory effect. Up to a time certain, the obligation remains
valid, but upon the arrival of said period, the obligation terminates.

 Example of an Obligation with a period Ex die

"I will support you, beginning the first day of next year."
Here, the obligation only become ls effective on the day stipulated.

 Example of an Obligation with a period In diem

"I will support you until Jan. 1 of next year."
Here, the obligation is immediately demandable and will end only on Jan. 1 of the next year.

 Queries
a) "I will support you from the time X marries." Is this an obligation with a term or a conditional
obligation?
ANS.: This is a conditional obligation because we can not be sure whether or not X will marry. In
other words, this is an obligation with a suspensive condition, not an obligation with a suspensive
term.

b) "I will begin supporting you if your father dies." Is this a conditional obligation or an obligation
with a term?
ANS.: This is an obligation with a term ex die - a term with a suspensive effect. Even if the word
"if" was used, still there is no doubt that "your father" will die, sooner or later.

c) "I will begin supporting you from the time your father dies of malaria." Is this an obligation with a
term?
ANS.: This is an obligation with a suspensive condition. It is true that "your father" will die sooner
or later, BUT we are not sure whether or not he will die of malaria. Hence, we have here a
condition instead of a term.

d) "I will pay you my debt when my means permit me to do so." Is this an obligation with a condition
or an obligation with a term,
ANS.: This is considered by the law as an obligation with a term. (Refer to Art.1180)
  "A Day Certain" - is understood to be that which must necessarily come, although it may not be
known when.
 NOTE:
a. When we know that something will happen but we are uncertain as to the time it will
happen, this is a term.
b. When we are not even sure if something will happen as a fact or not, this is a condition.

 Requisites for a Valid Period or Term

a. It must refer to the future.
b. It must be certain (sure to come) but can be extended. (If eliminated subsequently by
mutual.agreement, the obligation becomes pure and immediately demandable).
c. It must be physical and legally possible, otherwise the obligation is void. (Example: "I'll give you
my house one year after your death." The obligation here is void.

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.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.

 The article refers to Payment or Delivery Made Before the Arrival of the Period
a) A was supposed to pay B P1,000,000 on Dec.31, 2005. But believing that the obligation is due
and demandable already on Dec. 31, 2004, A paid B the P1,000,000 on said date. How much
may A recover from B, say on June 30, 2005?
ANS.: A may recover from B on June 30, 2005, the amount of P1,000,000 which had been
prematurely paid plus of course interest at the legal rate from Jan. 1, 2005, to June 30, 2005, 6%
of P1,000,000 = P60,000 (interest for one year). P60,000/2 = P30,000 (interest for the half-year
period from Jan. 1, 2005, to June 30, 2005). So A may revover a total of P1,000,000

b) Suppose in the preceeding problem, A had paid prematurely knowing fully well of the existence
of the term, how much can A recover?
ANS.: A can recover nothing. The reason is the law does not give him such a right. To be able to
recover, A:
1. must have been unaware of the period; or
2. must have believed that the obligation has become due and demandable.

c) On Mar. 1, A sold B a particular automobile. It was agreed that payment and delivery were to be
made on Mar. 31. But on Mar. 15, A delivered the car and B paid for said car. Pending the arrival
of Mar. 31, should B return the car plus damages and should A return the price plus interest?
ANS.: There should be no returning for two reasons:
1. It is true that Mar. 31 was the date set for payment of the price and delivery of the car, but the
subsequent actions of the parties concerned show that both implicitly agreed to the changing
of the date specified - from Mar. 31 to Mar. 15.
2. In reciprocal obligations, pending the fulfillment of the condition (and, therefore, also pending
the termination of the period) the interest and fruits are deemed to compensate each other,
when there has been premature performance on both side. (Art. 1187)

 Period within which Recovery May be Made

a) Whithin what period must recovery be made if the debtor did not know that payment was not yet
due?
ANS.: Before the debt matures (regarding what was paid). Even after maturity (regarding
interest) for after all the creditor was in BAD FAITH. (But the right prescribes 5 years after
premature payment.)
b) Within what period, if any, must recovery be made if the debtor knew that payment was not yet
due?
ANS.: No recovery can be had of what has been paid, much less can there be recovery of
interest. This is true whether the creditor is in good or bad faith, since the important thing is the
knowledge by the debtor of the PREMATURENESS.

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.

 For Whose Benefit the Term Has Been Established

General Rule: The term is for the benefit of both debtor and creditor. (Meaning: The debtor cannot
pay prematurely and the creditor cannot demand prematurely).
 Exceptions (if there be such intent)
a) Term is for the benefit of the debtor alone. (Meaning: He is required to pay only at the end, but
he may pay even before)
Example: D will pay C "within 6 years".
Here, D can pay even after one week from the time the obligation was constructed. D may also
resist premature demand for compliance.
 b) Term is for the benefit of the creditor alone. (Meaning: Creditor can demand at any time even
before the term expires, and he cannot be compelled to accept payment from the debtor prior to
the stipulated period.
Example: D promised to pay on Dec. 1, 2005, with the creditor given the right to demand
performance even before said date.

 NOTE: This article applies only where the parties to a contract themselves have fixed a period, and
not to a case where the parties have authorized the Court to fix a reasonable term.

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 change by
them.

 When the Court May Fix a Period

a) When the duration depends upon the will of the debtor.
Examples:
"When my means permit me to do so"; "I'll pay you little by little."; "as soon as possible", "as
soon as I have money"; "in partial payments"; When the debtor is "in a position to discharge his
obligation".

b) When although the obligation does not fix a period, it can be inferred that a period was intended.
Examples:
1. A contract to construct a house where the period was not stated.
2. A donation where the land was given provided certain construction was to be made on it.
Here the time within which the construction is to be made should be fixed by the courts.

 When the Court May Not Fix the Term

a) When no term was specified by the parties because no term was even intended, in which case
the obligation is really a pure one, and demandable at once
b) When the obligation or note is "payable on demand"

ART. 1198. The debtor shall lose every right to make use of the period:
1. When after the obligation has been contracted, he becomes insolvent, unless he gives a
guaranty or security for the debt;
2. When he does not furnish to the creditor the guaranties or securities which he has promised;
3. When 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;
4. When the debtor violates any undertaking in consideration of which the creditor agreed to the
period;
5. When the debtor attempts to abscond.

 When the debtor loses the benefit of the period

"the debtor shall lose every right to make use of the period"
- means the term is extinguished, and the obligation is demandable at once

 Examples
a) D owes C P1,000,000 demandable on Jul. 3, 2008. In December, 2004, D became insolvent.
- the debt is immediately demandable in Dec. 2004 unless D can offer sufficient security. (Prgh1)

b) If a debtor instead of making a mortgage in favor of the creditor, makes it in favor of another
person, he fails to furnish the promised guaranties, and he therefore loses the benefit of the
term. The same is true if instead of mortgaging to the creditor 3 parcels of land, he mortgage
only two of them. (Prgh2)
c) If a mortgaged house is allowed to decay by the mortgagor, he impairs the value of the guaranty,
and therefore the debt becomes demandable immediately. In the same way, if a mortgaged
house is completely lost in a typhoon, the debt is due at once unless another mortgage equally
good is constituted. This is true even if the loss be thru a fortuitous event. (Prgh3)
d) If a condition, such as not to gamble anymore, is violated, any term given because of the
condition is lost. If an employee commits a substantial breach of his employmeny contract, the
employer may terminate the employment, even if there was a fixed duration for the job. (Prgh4)
e) An attempt by the debtor to escape is a sihn of bad faith, hence, the loss of the term. Note that it
is not essential that there be an actual absconding, the intent to do so being sufficient . Upon the
other hand, a mere physical leaving, with no intent to defraud, is not sufficient.

 How Terms or Periods are Computed

a) Years - 365 days each
b) Months - of 30 days
c) Days - 24 hours
d) Nights - from sunset to sunrise