Section 2 - Obligations with a period

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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 preceding Section.

Period Defined
A

period is a future and certain length of time which

determines the effectivity or the extinguished of
obligation.

Obligation

with a period is one whose

consequences are subject in one way or another to
the expiration of said period or term. (8Manresal58)

day certain is understood to be that which must

necessarily come, although it may not be known
when.

Period and Condition Distinguished:

a)

As to fulfillment - A period is a certain event

which must happen sooner or later while a
condition is an uncertain event.

b)

As to time a period refers only to the future

while a condition may refer to a past
unknown event.

c)

As to influence or effect on the obligation

the period fixes the time of the effectivity of
the obligation while a condition may cause
the demandability of the obligation to arise
or to terminate.

 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. (n)

Effect of loss, deterioration, or improvement before the

arrival of period.
Note the cross reference to Art.
Example:

1189, NCC.

If A is suppose to deliver to B a particular car on

Dec.
19, 1999 by the car was destroyed by
fortuitous event in July 1, 1999, the obligation is
extinguished.

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 de
and demandable, may be recovered, with the fruits and
interests. (1126a)

Effect Of Payment Before Arrival of Period

This article which is similar to Article 1188, NCC, in an
obligation to give, allows the recovery of what has been
paid by mistake before the fulfillment of a suspensive
condition.

Example E owes G P20, 000.00, which was supposed to be paid on

December 25 this year. By mistake, E paid his obligation on
December 25 last year. Assuming that today is only June 30,
E can recover the amount plus interest therein. But E cannot
recover, except he interest, if the debt had already matured
or if E had knowledge of the period.

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. (1127)

Presumption As to Benefit Of A Period

The general rule is that when a period is fixed by the
parties , the period is presumed to be for the benefit
of both creditor and debtor.

Which means that before the expiration of the period,

the debtor may not fulfill the obligation and neither
the creditor demand its fulfillment.

By way of exceptions, however, if the tenor of the obligation or

other circumstances may indicate that a period is have been
established for the benefit of either the creditor or debtor:
For the benefit of both creditor and debtor

1.

Example
Gaya obtained a loan of P10, 000 at 12% interest per annum from
Tito for one year. Gaya has a period of one year within which to use
the money, while Tito will benefit from the interest which the money
will earn.

For the benefit of the creditor

2.

Example Gaya executes a promissory note in favor of Tito which reads: I

promise to pay Tito or order the amount of P10, 000 on demand.
Thus, Tito can demand payment from Gaya anytime.

For the benefit of debtor

3.

Example
Gaya executes a promissory note which reads: I promise to pay
Tito r order the amount of P 10,000 or before December 31, 2001.
Gaya can pay her obligation on or before Dec. 31, 2001.

ART. 1197. If the obligation does not fix a period, but

from its nature and 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 circumstance have been probably
contemplated by the parties. Once by the courts, the
period cannot be changed by them. (1128 a)

Court Generally is Without Power to Fix a Period

If an obligation does not state a judicial period and no
period is intended, the court is not authorized to fix a period.
The courts have no right to make contracts for the parties.

Exceptions to the general rule

1.

2.

If the obligation does not fix a period but it can be inferred from its
nature and circumstances that a period is intended.

Example:
S sold a parcel of land to B with a right of repurchase. No
term is specified in the contract for the exercise of the
right. Then, the court is authorized to fix the period to
repurchase.
If the duration of the period depends upon the sole will of
the debtor
Example:
I will pay you as soon as possible. Here , the period is not
fixed, so the court may fix the same because if this is not
so the obligation may never be complied with by the
debtor.

ART. 1198. The debtor shall lose every right to make

use of the period:
1)

2)
3)

4)

5)

When after the obligation has been contracted, he

becomes insolvent, unless he gives a guaranty or
security for the debt;
When he does not furnish to the creditor the
guaranties or securities which he has promised ;
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;
When the debtor violates any undertaking, in
consideration of which the creditor agreed to the
period;
When the debtor attempts to abscond. (1129a)

When Debtor Loses The Right to

Make Use Of A Period
The

general rule is that the obligation is not

demandable before the lapse of the period. The
exceptions are based on the fact that the debtor
might not be able to comply with his obligation:
1.

When debtor becomes insolvent:

The insolvency need not be judicially declared. It is
sufficient that the debtor has less assets than his liabilities
or if debtor is unable to pay his debts as they mature. It is
noted that the insolvency of the debtor must occur after
the obligation has been contracted.

When Debtor Loses The Right to

Make Use Of A Period
2.

When debtor does not furnish guaranties or securities

promised:
Example:
Gaya borrowed loan from Tito which loan was secured by a
chattel mortgage of Gayas car as a guaranty. After obtaining
the loan, Gaya fails or does not execute a chattel mortgage,
the loan becomes demandable or the debtor loses her right to
make use of the period.

3.

When by his own acts he has impaired said guaranties or

securities:
Example:
Gaya borrowed P50, 000 from Tito which loan was secured by
a chattel mortgage on Gaya s car. Later, Gayas fault, the
car was damaged or she causes the impairment of the car,
Gaya loses her right to make use of the period, unless she gives
another one equally satisfactory.

When Debtor Loses The Right to

Make Use Of A Period
4.

When by fortuitous event, the guaranty or security was lost.

Example:
Gaya borrowed P50, 000 from Tito which loan was secured by a chattel
mortgage on Gayas car. After obtaining the loan, the car was lost by
fortuitous event. Gaya loss her right to male use of the period unless she
gives another guaranty or security equally satisfactory.

5.

When debtor violates an undertaking

Example:
Art secured a loan from Arnold on condition that Art will paint the house of
Arnold. If after the proceeds of the loan was given to Art, he did not pant
the house of Arnold, Art loses his right to make use of the period.

6.

When the debtor attempts to abscond.

Abscond means a depart or escape from creditors knowledge to avoid
payment of his debt. Mere attempt on the part of debtor will entitle the
creditor to demand payment of the obligation without waiting for the
period to expire.