Book IV (Obligations and Contracts)

Chapter 3: Different kinds of obligations

Section 1 Pure and conditional obligations
Art. 1179
Pure obligation when the obligation contain no term or condition whatever upon which depends the fulfilment of the
obligation contracted by the debtor
Example: Gaya obliged herself to pay her loan of P1,000 to Tito on demand.
Instances when obligations are immediately demandable:
1. It is a pure obligation;
2. It is subject to a resolutory condition
3. It is subject to resolutory period
Conditional Obligations one which is subject to a condition of one whose performance depends upon a future or
uncertain events or upon past event unknown to the parties
Art. 1180
Example: A promissory note states that This is to acknowledge receipt of sum of One thousand Six
Hundred pesos (P1, 600.00) and I am to pay my debt to Arvin as soon as possible or as soon as I have the
money. It was held that the conditional obligation is void, because the collection would be impossible, the
remedy of the creditor is to ask the Court to fix the period of payment, and thus, it becomes an obligation
with a period.
Art. 1181-1186
Condition happens in the future and it is uncertain
Kinds of condition:
1. Suspensive and Resolutory (Effect)
Suspensive the happening of the condition gives rise to an obligation.
Example: Maya binds herself to deliver a determinate car to Tito if he marries Gaya. The obligation
is only demandable upon the happening of the condition that is, if Tito marries Gaya. The obligation
is suspended and not yet demandable.
Resolutory the happening of the condition extinguishes the obligation already existing.
Example: Arvin binds himself to lend his only car to Ian until the latter passes the CPA Board. The
obligation to lend is immediately demandable. Ians right over the car is extinguished upon his
passing the CPA board. Ian is now obliged to return the car.
2. Potestative, Casual and Mixed (Cause)
Potestative one the fulfilment of which depends upon the sole will of the debtor. This kind of condition is
void.
Example: Arvin Promise to give his only parcel of land to Maya if he decides to leave for the United
States.
Casual one the fulfilment of which depends upon chance.
Example: Mario agrees to give Maria a determinate car if Marias only racing horse will win the
sweepstake race.
Mixed one which depends partly upon the will of third person and partly upon chance
Example: Vincent promise to give Victor a new Toyota Car if Victor will be able to play with and
beat Karpov in a game of chess. This is mixed condition, that is Karpov willingness to play chess
with Victor and the latters winning over Karpov.
3. Possible and Impossible (Possibility)
Physical Impossibility the condition imposed is not capable of being performed physically
Example: Grace will give Christine a gold necklace if she swims across the
Pacific Ocean.
Illegal Impossibility when the condition imposed is contrary to law, good custom or public policy.
Example:
a. Contrary to law: Pedro agrees to give Ernesto P100,000 if Ernesto will kill Mario.
b. Contrary to good custom: Santos binds himself to give Maria a gold wrist watch if she
will cohabit with Mr. Reyes without benefit of marriage.
Book IV (Obligations and Contracts)

c. Contrary to public policy: Maria agrees to employ Grace in her company if Grace will
not join a labor union.
4. Positive and Negative (Mode)
Negative condition - one where some event will not happen at a determinate time, either the time indicated
has elapsed or it has become evident that the event cannot occur
Example: Victor will give Jason a car if he will not marry Helen until Dec. 19, 2001, if Jason has not
married Helen until Dec. 19, 2001 or if Helen has died within the prescribed time without having
married to Jason, the obligation becomes demandable. If Jason married Helen within the
prescribed time, the obligation of Victor is extinguished.

5. Divisible and Indivisible

Divisible that part of obligation which is not affected by impossible or unlawful condition shall be valid
Example: X promise to pay Y the sum of P1, 000.00 if Y furnishes X with information as to the
whereabouts of Z and another sum of P2, 000.00 if Y kills Z. in the obligation, the first part (to pay
P1, 000.00) is valid while the second part (P2, 000.00) is void because only the latter is affected by
the condition.
6. Express and Implied
Example: Maam will donate her house to CJ if
Express CJ will adopt the cats
and
Implied CJ must take care of the cats
Art. 1187
Once the condition is fulfilled, the effects of the conditional obligations shall retroact to the day of the constitution of
the obligation and not on the date when the condition was fulfilled.
Example: On Jan. 1, 1999 A agreed to give B a parcel of land if he passes the May, 1999 CPA exams. If B
passes the CPA exams in May, 1999, he is entitled to the land effective Jan. 1, 1999 because Bs right over
the land retroacts to the date when the obligation was constituted.
As to the fruits and interest - the effect of conditional obligation to give, as a rule, do not retroact to the date of the
constitution of the obligation. The following rules shall govern:
1. In reciprocal obligation (like a contract of sale) - the fruits and interest during the pendency of the condition
shall be deemed to have been mutually compensated.
Example: A agrees to sell and B agrees to buy As parcel of and if B passes the May, 1999 CPA
exams. If B passes the May, 1999 CPA Board, the obligation becomes demandable. B is entitled to
all the interests that his money (with which to pay A) may earn while A is entitled to the fruits which
the parcel of land may have produced during the pendency of the condition.
2. In unilateral obligation the debtor shall appropriate the fruits and interests received during the pendency of
the condition unless a contrary intention appears.
Example: X agreed to give Y a parcel of land if Y passes the CPA Board in May, 1999 exams.
Pending the happening of the condition, A is entitled to the fruits which the land may produce, A will
deliver only the parcel of land if the condition is fulfilled, unless a contrary intention appears.
Art. 1188
Preservation of creditors rights:
1. To prevent the loss or deterioration of the things which are the objects of the obligation by enjoining or
restraining acts of alienation or destruction by the debtor himself or by third person.
2. To prevent concealment of the debtors properties which constitute the guaranty in case of non-performance
of the obligation.
3. To demand security if the debtor becomes insolvent.
4. To compel the acknowledgement of the debtors signature on a private document or the execution of proper
public document for registration so as to affect third person.
5. To register the deeds of sale or mortgages.
6. To set aside fraudulent alienation made by the debtor.
7. To interrupt the period of prescription by actions against adverse possessors of the things which are objects
of the obligation.
Paragraph I of the above article authorizes the creditor to take any appropriate actions for the preservation of
creditors right during the pendency of the condition:
Book IV (Obligations and Contracts)

Example: On Jan. 1, 1999, Raul obliged himself to sell a parcel of land to Dennis if he passes the CPA exams in
October, 1999. From the time the obligation was constituted and pending the happening of the condition
(passing the CPA Exams) Dennis may cause the annotation of the condition in the certificate of title in the
Register of Deeds where the land is located, to preserve his right over the parcel of land.
Paragraph II in order that debtor may recover what he has paid by mistake, during the pendency of the condition, the
following requisites may be present:
1. The debtor paid the creditor before the fulfilment of the condition.
2. Payment made by debtor was through mistake and error.
3. The action to recover what was paid by mistake should be made before the fulfilment of the condition.
Example: Pedro obliged himself to pay Santos P20, 000 if a PAL plane crashes at Cebu before
Dec. 30, 1998. After the obligation was constituted and before Dec. 30, 1998, a plane crushed in
Cebu. Pedro honestly and believing that the condition was fulfilled paid the P20, 000 to Santos. It
turned out however that it was a Cebu airline that crushed. Thus, Pedro may recover the amount
paid to Santos by mistake for the reason that the condition has not yet been fulfilled.
Art. 1189
1. In case of loss of the thing
a. If the thing is lost without the fault of the debtor, the obligation shall be extinguished.
Example: Reyes obliged himself to give Santos a determinate car if he passes the CPA Exams in
Oct. the current year. If during the pendency of the condition the car was lost through fortuitous
event without the fault of Reyes, the obligation to deliver the car is extinguished even if the
condition is fulfilled later.
b. If the thing is lost through the fault of the debtor, he shall be obliged to pay damages. If in the example
above, the specific car was lost through the fault of Reyes, he shall be liable for damages upon the
fulfilment of the condition.

2. When the thing deteriorates

a. When the thing deteriorates during the pendency of the condition, without the fault of the debtor, the
impairment is to be borne by the creditor.
Example: Arvin obliged himself to give Ian a determinate Toyota car if Ian passes the October CPA
Exams. During the pendency of the condition, the car was partially damaged by flood, without the
fault on the part of Arvin. If the condition is fulfilled, Ian will bear the impairment.
b. If the thing deteriorates, during the pendency of the condition, through the fault of the debtor, the
creditor may choose, after the fulfilment of the condition, between the rescission of the obligation or its
fulfilment, with indemnity for damages in either case.

3. When the thing improved

a. If the thing improved during the pendency of the condition, by its nature, or by time, the improvement
shall inure to the benefit of the creditor. The reason for this is to compensate the creditor who would
suffer in case, instead of improvement, there would be deterioration without the fault of the debtor.
b. If the thing is improved at the expense of the debtor, he have no other right than that granted to the
usufructuary. By us usufruct is meant the right to enjoy the property of another which includes the right
to enjoy and use the fruits of the property.