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)

A day certain is understood to be that which must

necessarily come, although it may not be known when.
Kinds of Period
According to Effect
1. Suspensive the obligations begins only from a day
certain upon arrival of the period.
2. Resolutory the obligation is valid to a day certain
and terminates upon the arrival of the period.
According to definiteness
1. Definite period when it is fixed or it is known when
it will come.
2. Indefinite when it is not fixed or it is not known
when it will come. When it is not fixed but a period
is intended, the courts are empowered to fix the
same.
 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. 1189, NCC.

Example:

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. 1189. When the conditions have been imposed
with the intention of suspending the efficacy of an
obligation to give, the following rules shall be observed
in case of the improvement, loss or deterioration of the
thing during the pendency of the condition:

1) If the thing is lost without the fault of the debtor,

the obligation shall be extinguished.
2) If the thing is lost through the fault of the debtor,
he shall be obliged to pay damages; it is
understood that the thing is lost when it
perishes, or goes out of commerce, or disappears
in such a way that its existence is unknown or it
cannot be recovered;
1) When the thing deteriorates without the fault of
the debtor, the impairment is to be borne by the
creditor;
2) If it deteriorates through the fault of the debtor;
the creditor may choose between the rescission
of the obligation and its fulfillment, with
indemnity for damages in either case;
3) If the thing is improved by its nature, or by
time, the improvement shall inure to the
benefit of the creditor;
4) If it is improved at the expense of the debtor, he
shall have no other right than that granted to
the usufructuary (right to enjoy use and fruits)
 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. (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
the 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:

1. For the benefit of both creditor and debtor

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.
2. For the benefit of the creditor
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.

3. For the benefit of debtor

Example
Gaya executes a promissory note which reads: I
promise to pay Tito or order the amount of P 10,000
on 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 fixed 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. 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.
2. 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) 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. (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 make use of the period unless she gives another
guaranty or security equally satisfactory.
When debtor losses the right to make use of
a period
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 paint the house of Arnold, Art
loses his right to make use of the period.
6. When the debtor attempts to abscond.
Abscond means to 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.