DAEHAN COLLEGE

OF BUSINESS AND
TECHNOLOGY
BUSINESS LAW MODULE
WEEK 5-6
PURE AND
CONDITIONAL OBLIGATIONS
WEEK 5
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ARTICLE 1179. Every obligation whose performance does not
depend upon a future or uncertain event, or upon a past event
unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition shall also
be demandable, without prejudice to the effects of the happening
of the event. 
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PURE AND CONDITIONAL OBLIGATIONS

CLASSIFICATION OF OBLIGATIONS:

(1) Primary classification of obligations under the Civil

Code
a. Pure and conditional obligations
b. Obligations with a period
c. Alternative and facultative obligations
d. Joint and solidary obligations
e. Divisible and indivisible obligations
f. Obligations with a penal clause

(2) Secondary classification of obligations under the Civil

Code
a. Unilateral and bilateral obligations
b. Real and personal obligations
c. Determinate and generic obligations
 d. Civil and natural Obligations
e. Legal, conventional, and penal obligations

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Article 1179. Every obligation whose performance does not
depend upon future or uncertain event, or upon a past event
unknown to the parties, is demandable at once.

Every obligation which contain a resolutory condition shall also be

demandable, without prejudice to the effects of the happening of
the event.
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Meaning of pure obligation:

A pure obligation is one which is not subject to any condition

and specific date is mentioned for its fulfillment and is, therefore,
immediately demandable.

Examples:

(1) D obliges himself to pay C Php 1,000.00. The obligation is

immediately demandable because there is no condition and no
date is mentioned for its fulfillment.

(2) D binds himself to pay C Php 1,000.00 “upon demand of C”.

The obligation is immediately due and demandable.

Meaning of conditional obligation:

A conditional obligation is one whose consequences are

subject in one way or another to the fulfillment of a condition.
Meaning of condition:

Condition is a future and uncertain event, upon the happening of

which, the effectivity or extinguishment of an obligation (or right)
subject to it depends.

Two principal kinds of condition:

(1) Suspensive condition (condition precedent or condition

antecedent) or one the fulfillment of which will give rise to an
obligation (or right). In other words, the demandability of the
obligation is suspended until the happening of the uncertain event
which constitutes the condition

Example:

I will sell you the land if it is adjudicated to me in the division of

my deceased father’s estate. My obligation is demandable only
after the condition is fulfilled—my becoming owner of the land. In
the meantime, I am not liable to you.

(adjudicated – pronounced or declared judicially)

(2) Resolutory condition (condition subsequent) or one the

fulfillment of which will extinguish an obligation (or right) already
existing.
Example:

D, in payment of his debt to C, binds himself to give C Php

3,000.00 monthly allowance until C graduates from college. D’s
obligation is demandable now but it shall be extinguished or
terminated upon the happening of the resolutory condition---C’s
graduating from college.

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Article 1180. When the debtor binds himself to pay when his
means permit him to do so, the obligation shall be deemed to be
one with a period, subject to the provisions of article 1179.
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A period is a future and certain event upon the arrival of which

the obligation subject to it either arises or is extinguished.

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Article 1181. In conditional obligations, the acquisition of rights,
as well as the extinguishment or loss of those already acquired,
shall depend upon the happening of the event which constitutes
the condition.
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(1) Acquisition of rights – In obligations subject to a

suspensive, the acquisition of rights by the creditor depends upon
the happening of the event which constitutes the condition.
Examples:

a. T, testator, in his last will and testament gave some property

to H (heir) provided would die within two (2) years.

b. The surrender of the sweepstakes ticket is a condition

precedent to the payment of the prize.

(2) Loss of rights already acquired – In obligations subject to

a resolutory condition, the happening of the event which
constitutes the condition produces the extinguishment or loss of
rights already acquired.

Example

a. X binds himself to support Y until Y graduates from college.

Here, the right already acquired by Y --- the right to receive
support --- shall be extinguished or lost once the condition is
fulfilled.

b. A lease contract expressly stipulates that R, lessor, may

terminate the lease in case his children shall need the leased
premises. Here, the happening of the condition depends upon the
will of a third person --- R’s children

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Article 1182. When the fulfillment of the condition
depends upon the sole will of the debtor, the conditional
obligation shall be void. If it depends upon chance or upon
the will of a third person, the obligation shall take effect in
conformity with the provisions of this Code.
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Classification of conditions:

(1) As to effect:
a. Suspensive – the happening of which gives rise to the
obligation
b. Resolutory – the happening of which extinguishes the
obligation

(2) As to form:
a. Expressed – the condition is clearly stated
b. Implied – the condition is merely inferred

(3) As to possibility:
a. Possible – the condition is capable of fulfillment, legally
and physically
b. Impossible – the condition is not capable of fulfillment,
legally or physically

(4) As to cause or origin:

a. Potestative – the condition depends upon the will of one
of the contracting parties
b. Casual – the condition depends upon chance or upon the
will of a third person;
c. Mixed – the condition depends partly upon chance and partly
upon the will of a third person

(5) As to mode:
a. Positive – the condition consists in the performance of
an act
 b. Negative – the condition consists in the omission of an
act

(6) As to numbers:
a. Conjunctive – there are several conditions and all must
be fulfilled
b. Disjunctive – there are several conditions and only one or
some of them must be fulfilled

(7) As to divisibility:
a. Divisible – the condition is susceptible of partial
performance
b. Indivisible - the condition is not susceptible of partial
performance

Examples:

(1) I will pay you if I want.

(2) I will pay you after I receive a loan from a bank.
(3)I will pay you after I recover what X owes.
(4)I will pay you upon the sale of the house in which I live.
PURE AND
CONDITIONAL OBLIGATIONS
WEEK 6

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Article 1183. Impossible conditions, those contrary to good customs or
public policy and those prohibited by law shall annul the obligation which
depends upon them. If the obligation is divisible, that part thereof which is
not affected by the impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be considered as not
having been agreed upon.
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Article 1183 refers to suspensive conditions. It applies only to cases where

the impossibility already existed at the time the obligation was constituted.
If the impossibility arises after the creation of the obligation, Article 1266
governs.

TWO KINDS OF IMPOSSIBLE CONDITIONS:

(1) Physically Impossible Conditions – when they, in nature of things,

cannot exist or cannot be done

Example:
“I will pay you Php 10,000.00 if it will not rain for one year in the
Philippines.”

(2) Legally Impossible Conditions – when they are contrary to law,

morals, good customs, public order, or public policy

Example:

X will give Y Php 10,000.00 if Y—

-will kill Z (against the law)
-will be the common-law wife of X (against morals)
-will slap his father (against good customs)
-will publicly advocate the overthrow of the government (against
public order)

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Article 1184. The condition that some event happen at a determinate
time shall extinguish the obligation as soon as the time expires or if it has
become indubitable that the event will not take place.
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(indubitable – impossible to doubt; unquestionable)

The above article refers to positive (suspensive) condition---the happening

of an event at a determinate time.

Example:
X obliges himself to give B Php 10,000.00 if B will marry C before B
reaches the age of 23.

(a) X is liable if B marries C before he reaches the age of 23.

(b) X is not liable if B marries C at the age of 23 or after he reaches the
age of 23.
(c) If B dies at the age of 22 without having married C, the obligation is
extinguished because it has become indubitable that the condition will not
take place.

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Article 1185. The condition that some event will not happen at a
determinate time shall render the obligation effective from the moment the
time indicated has elapsed, or if it has become evident that the event
cannot occur.
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The above provision speaks of a negative condition---that an event will not

happen at a determinate time.

Example

Joshua binds himself to give Julius Php 10,000.00 if Julius is not yet
married to Cherry on December 30.

(a) Joshua is not liable to Julius if Julius marries Cherry on December 30 or

prior thereto.
(b) Joshau is liable to Julius if on December 30, Julius is not married to
Cherry and if Julius marries Cherry after December 30.
(c) Suppose C dies on November 20 without having been married to J. The
condition is rendered effective because it is certain that the condition not
to marry Cherry will be fulfilled. In this case, the obligation becomes
effective from the moment of C’s death on November 20 although the time
indicated (December 30) has not yet elapsed.

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Article 1186. The condition shall be deemed fulfilled when the obligor
voluntarily prevents its fulfillment.
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THREE REQUISITES FOR THE APPLICATION OF THIS ARTICLE:

(1) The condition is supensive;

(2) The obligor actually prevents the fulfillment of the condition; and
(3) He acts voluntarily.

The law does not require that the obligor acts with malice or fraud as
long as his purpose is to prevent the fulfillment of the condition. He should
not be allowed to profit from his own fault or bad faith.

Example:

X agreed to give Y a 5% commission if the latter could sell the former’s

land at a certain price. Y found a buyer who definitely decided to buy the
property upon the terms prescribed by X. To evade the payment of the
commission agreed upon, X himself sold to the buyer the property at a
lower price without the aid of Y.

In this case, it can be said that the due performance by Y of his

undertaking, the condition for the payment of the commission, was
purposely prevented by X, and is deemed fulfilled.

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Article 1187. The effects of a conditional obligation to give, once the
condition has been fulfilled, shall retroact to the day of the constitution of
the obligation. Nevertheless, when the obligation imposes reciprocal
prestations upon the parties, the fruits and interests during the pendency
of the condition shall be deemed to have been mutually compensated. If
the obligation is unilateral, the debtor shall appropriate the fruits and
interest received, unless from the nature and circumstances of the
obligation it should be inferred that the intention of the person constituting
the same was different.

In obligations to do and no to do, the courts shall determine, in each case,

the retroactive effect of the condition that has been complied with.
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(1) IN OBLIGATIONS TO GIVE

Example:

On January 20, S agreed to sell his parcel of land to B for Php

50,000.00 should B lose a case involving the recovery of another parcel of
land. On April 10, S sold his land to C. B lost the case on December 4.

Before December 4, B had no right to demand the sale of the land by

S. When the condition, however, was fulfilled on December 4, it is as if B
was entitled to the land beginning January 20.
Hence, as between B and C, B will have a better right over the land.

(2) IN OBLIGATIONS TO DO OR NOT TO DO

Example:

C obliged himself to condone the debt of D, his lawyer, should the

latter win C’s case in the Supreme Court.
 In this case, upon the fulfillment of the condition,C shall not be
entitled, unless the contrary has been stipulated, to the earned interests of
the capital during the pendency of the condition as the intention of C is to
extinguish the debt. Here the fulfillment of the condition has a retroactive
effect.

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Article 1188. The creditor may, before the fulfillment of the condition,
bring the appropriate actions for the preservation of his right.
The debtor may recover what during the same time he has paid by mistake
in case of a suspensive condition.
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Article 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 is
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;
(3) When the thing deteriorates without the fault of the debtor, the
impairment is to be borne by the creditor;
(4) 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;
(5) If the thing is improved by its nature, or by time, the improvement shall
inure to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall have no other
right than that granted to the usufructuary.
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(inure – came into operation; take effect)

(usufruct – the right of enjoying a thing, the property of which is vested
in another, and to draw from the same all the profit, utility and advantage
which it may produce, provided it be without altering the substance of the
thing)

Requisites for the application of Article 1189:

(1) The obligation is a real obligation

(2) The object is a specific or determinate thing;
(3) The obligation is subject to suspensive conditions;
(4) The condition is fulfilled; and
(5) There is loss, deterioration, or improvement of the thing during the
pendency of the condition.

KINDS OF LOSS IN CIVIL LAW:

(1) Physical loss – when a thing perishes as when a house is burned and
reduced to ashes;
(2) Legal loss – when a thing goes out of commerce (e.g. a product
becomes obsolete) or when a thing heretofore legal becomes illegal (e.g.,
during the Japanese occupation, American dollars had become impossible
since their use was forbidden by the belligerent occupant); or

(3) Civil loss – when a thing disappears in such a way that its existence is
unknown (e.g., a particular dog has been missing for some time); or even
if known, it cannot be recovered, whether as a matter of fact (e.g., a
particular ring is dropped from a ship at sea) or of law (e.g., a property is
lost through prescription).

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Article 1190. When the conditions have for their purpose the
extinguishment of an obligation to give, the parties, upon the fulfillment of
said conditions, shall return to each other what they have received.
In case of loss, deterioration or improvement of the thing, the provisions
which, with respect to the debtor, are laid down in the preceding article
shall be applied to the party who is bound to return.
As for obligations to do and not to do, the provisions of the second
paragraph of Article 1187 shall be observed as regards the effect of the
extinguishment of the obligation.
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Example:

X allows Y to use the former’s car until X returns from the province. Upon
the return of X from the province, Y must give back the car. The effect of
the happening of the condition is to annul the obligation as if it had never
been constituted at all. In this case, the parties intend the return of the
car.

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Article 1191. The power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply with what is
incumbent.
The injured party may choose between the fulfillment and the rescission of
the obligation, with the payment of damages in either case. He may also
seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.

The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third persons

who have acquired the thing, in accordance with Articles 1385 and 1388
and the Mortgage Law.
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KINDS OF OBLIGATION ACCORDING TO THE PERSON OBLIGED:

(1) Unilateral – when only one party is obliged to comply with a

prestation.

Example: Donation

(2) Bilateral – when both parties are mutually bound to each other. Both
parties are debtors and creditors of the other.

(a) Reciprocal obligations are those which arise from the same
cause and in which each party is a debtor and creditor of the other, such
that the performance of one is designed to be the equivalent and the
condition for the performance of the other.

Example:

In a contract of sale, in the absence of any stipulation , the delivery

of the thing sold by the seller is conditioned upon the simultaneous
payment of the purchase price by the buyer, and vice versa.
 (b) None-reciprocal obligations are those which do not impose
simultaneous and correlative on both parties. In other words, the
performance of one party is not dependent upon the simultaneous
performance by the other.

Example:

X borrowed from Y Php 5,000.00. Y on the other hand, borrowed X’s

car. The performance by X of his obligation to Y is not conditioned upon
performance by Y of his obligation and vice versa.

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Article 1192. In case both parties have committed a breach of the
obligation, the liability of the first infractor shall be equitably tempered by
the courts. If it cannot be determined which of the parties first violated the
contract, the same shall be deemed extinguished, and each shall bear his
own damages.
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(infractor – violator; breaker)

Example:
S sold his TV set to B. The agreement is that the set shall be
delivered on October 1 at the house of B and payment shall be made by B
upon delivery. S did not deliver the set on October 1 in spite of a demand
made by B. Five days later, S delivered the set but B incurred in delay in
paying the purchase price.
 In a suit between S and B, the liability of S for damages should be
equitably tempered by the court, taking into consideration the breach also
of the obligation on the part of B.

If both alleged that the other was the first infractor and the court
cannot determine who of the two is telling the truth, the contract shall be
deemed extinguished and each shall bear his own damages. This means
that the contract shall not be enforced.