If the prevention is based on a legal ground
then there can be an application of 1186.
Josefina Tayag vs Court of Appeals and
Albrigido Levya
The creditor said the one who voluntarily
prevents the fulfillment of the obligation should
be the debtor not the creditor.
How was that resolved by the court?
It is a reciprocal obligation whereby both are
mutual creditors and debtors to each other.
Art. 1187
What happens if the obligation subject is a
suspensive condition is fulfilled?
Article 1187 provides that it shall retroact to the
date of the constitution of the obligation, the
reason being that the suspensive condition is
merely an accessory element. For as long the
three elements of an obligation are present
then the obligation is valid because and
obligation can exist even without a condition so
it is given retroactive application.
Right to the happening of the suspensive
condition and it is one that is reciprocal. What
happens to the fruits as well as the interest?
There is mutual compensation meaning the
seller retains the fruits and the buyer retains
the interest.
In unilateral obligation it shall accrue to the
benefit of the debtor.
Example: Contract of usufructs.
Art. 1188
So if the object of the obligation is determinate
and is subject was suspensive condition, prior to
the happening of the condition the debtor
cannot encumber, dispose, or sell the object of
the prestation because of Article 1188. The
creditor may go to court and bring the
appropriate actions for the preservation of his
right. Thus there is this prohibition on the part
of the debtor prior to happening of the
suspensive condition whereby the object of the
prestation is determinate.
He cannot encumber or do any act that would
tend to prejudice the rights of the inchoate
creditor, inchoate in the sense that prior to the
happening of the suspensive condition he does
not have a real right over it yet, but nonetheless
because what is involved is a determinate
object then he is forbidden from disposing of it
or encumbering it or performing any act that
would tend to prejudice the creditor because of
1188 bring the appropriate action to protect his
interest.
Art. 1189
Then what are the rules to be observed prior to
the happening of the suspensive condition in
the event of loss, deterioration, or
improvement? That’s 1189 which is also true in
obligations subject ro resolutory condition.
Deterioration
When it deteriorates without the fault of the
debtor then it shall be borne by the creditor.
If it deteriorates or is impaired by reason of the
negligence of the debtor, the creditor has 2
choices:
To Rescind plus damages or to demand
fulfillment plus damages
Loss
If it is without fault of the debtor, the obligation
is extinguished.
Take note: Definition of loss? When is there
loss?
If the loss by reason of the fault of the obligor,
what is the liability of the debtor?
The value damages plus the interest
If there is improvement by nature or by time
then it shall accrue to the benefit of the
creditor.
While if it is improved at the expense of the
debtor, the debtor has no other right than that
granted by usufructuary which means that he
can remove the improvements that have been
introduced in the property subject to the
condition that no damage shall result to the
principal upon which the improvement is
attached.
If it is improved by the expense of the debtor
but has also deteriorated by the fault of the
debtor then there is mutual compensation.
Art. 1190
The happening of the resolutory condition , the
obligation is extinguished, there is that
requirement of mutual restitution between the
parties and in the event the creditor who is now
the debtor to return the object of prestation
could no longer return it; If there is good faith
then it must let the patrimony of the debtor he
will only be liable for the value as well as the
price and the interest but if the third person or
the transferee falls in bad faith then there can
be cancellation or rescission of the transfer
because of the bad faith of the transferee.
Now the rules to observe in the loss,
deterioration or improvement shall be the same
as that of 1189.
Art. 1191
The power to rescind is implied in reciprocal
ones in case one of the obligors should not
compy with what is encumbent upon him.
So this is known as the tacit resolutory
condition and the injured party may choose
fulfillment plus damages or recission plus
damages. Alternative the remedy is alternative,
he can have both however if fulfillment is no
longer possible.
Because the basis of the grant of resolution is
substantial breach on the part of the injured
party then if there is substantial breach then
the court the decision to claim otherwise the
breach is slight then the court shall fix the
period within which the debtor shall comply
with the obligation and once it is fixed it would
no longer be changed by the court.
Exceptions to 1191:
Where 1191 finds the obligation if it is expressly
stipulated by the parties that regardless of the
degree of breach, the rescission shall follow as a
matter of right then there is no need for going
to court because even if there performance
regardless of how slight it is, the court will
determine if rescission is proper or not under
the circumstances. So it is the court that
determines whether the recission is proper or
not.
Likewise this will not apply to contracts of lease
this is to be governed by other provisions of the
civil code.
In sale of installments involving the personal
property, that’s direct to law, is governed by
sales under the law on sales. Likewise you have
also the Maceda law (RA 6552); this refers to
the sale of real estate in installments where the
law requires that there must be notarial
rescission for the injured party to claim
rescission under the Maceda law.
So where can there be an extrajudicial
rescission? There would be no need of court
intervention.
If there is no performance whatsoever by the
(…)
Take note that 1191 can only be invoked by the
injured party, this cannot be invoked by the
infractor.
And that is why in the case of
HONORLITA ASCANO-CUPINO vs PACIFIC
REHOUSE CORP.
Where the Supreme Court said that they are
not the injured party thus there is no basis for
their claim of rescission.
Now what happens if the court grants the
rescission?
Then there is mutual restitution. The parties are
required to mutually restore each other what
they received from the other.
How to distinguish rescission from 1191 and
1381?
One is that 1191 is principal the other is
subsidiary.
The former is based on the breach of faith in
performance of the obligation, the other is
based on economic treaties.
Third is that the former can only be brought by
the injured party whereas in 1381 in can be
brought by any third person
Note: If you are asked to enumerate, answer in
complete form.
SPOUSES CANNU vs. SPOUSES GALANG
Why did the court grant rescission despite the
fact that according the buyer there were
receipts and subsequent acceptance of the
payment despite the fact that payments were
long delayed?
Because at the time the partial payments were
made, the seller was in another country so he
appointed an agent and yet despite that the
court granted the decision to claim.
Swire Realty Development Corporation vs
JAYNE YU
Is the decision proper? This was a contract to
sell. Why did the court allow?
There was already full payment of the purchase
price of the condo unit so the obligation already
arises to transfer ownership and turn over the
property.
FONG vs DUENAS
Where did the court apply 1192?
The basis of their agreement is verbal so it
cannot be determined as to who breached the
obligation first.
CUPINO vs PACIFIC REHOUSE
The real injured party is not Cupino but Pacific
Rehouse. There was non-performance by the
seller and in fact they have been paying the
purchase price through the form of advances by
the sellers.
ASB REALTY CORPORATION vs. ORTIGAS

Actually the real party was not ASB it was

Amethyst.

Another issue there is the fact that there was

annotation (…) sufficient knowledge of ASB to
comply with those requirements because it was
annotated at the back of the title

SECTION 2: OBLGIATIONS WITH A PERIOD

Ex Die = from a day certain

In Diem = to a day certain

And if a period is stipulated in the obligation

whose benefit is it?

It is for the benefit of the creditor and the

debtor but unless the period is for the benefit
of one of the parties of the obligation it can be
the benefit of either the creditor or the debtor.