BALOBCOX

OBLIGATIONS AND
CONTRACTS
Source: CPA Board Exams Reviewer
Module 3 (Kinds of Obligations: Pure and
Conditional Obligations; Obligation with a Period)
2TAY2122
FORTUITOUS EVENT
- are those events that could not be
foreseen, or which, though
foreseen, are inevitable. (Art.
1174) It is not enough that the
event should not been foreseen or
anticipated, but it must be one
impossible to foresee or avoid.
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FORTUITOUS EVENT

Example: Natural calamities or acts

of God such as earthquake,
typhoon and lightning; and acts of
man “force majure” such as war
and armed robbery.
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Elements of Fortuitous Event
a. The cause must be independent of the
debtor’s will.
b. There must be impossibility of
foreseeing the event or of avoiding it
even if it can be foreseen.
c. The occurrence of the event must be
of such character as to render it
impossible for the debtor to perform
his obligation in a normal manner.
(Sicam vs. Jorge, G.R. No. 159617)
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Liabilities for fortuitous
events
General rule: No person shall be
liable for fortuitous events,
his obligation will be
extinguished.
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Liabilities for fortuitous
events
Exceptions to the rule (Art. 1174)
a. When the law provides for liability even
in case of fortuitous events (such as
that provided in Art. 1165 where the
obligor is liable for fortuitous event if
he delays or has promised to deliver
the same thing to two or more
persons who do not have theBALOBCOXsameCD
interest).
Liabilities for fortuitous
events

Exceptions to the rule (Art. 1174)

b. When the parties have declared
liability even in case of fortuitous
event.

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Liabilities for fortuitous
events
Exceptions to the rule (Art. 1174)
c. When the nature of the obligation
requires the assumption of risk
(such as the obligation of an
insurer who must pay the policy
holder even if the loss is caused
by a fortuitous event if the caused
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thereof is the insured against).
Burden of proving loss due to
fortuitous event.
- The burden of proving that the loss
was due to fortuitous event rests
on him who invokes it. And, in
order for a fortuitous event to
exempt one from liability, it is
necessary that he must have
committed no negligence or
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misconduct that may have
occasioned the loss.
Presumption on receipt of
principal of or later
installment. (Art. 1176)

1. The receipt of the principal

without reservation as to the
interest shall give rise to the
presumption that the interest
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has been paid.
Presumption on receipt of
principal of or later
installment. (Art. 1176)

2. The receipt of a later installment

without reservation as to prior
installments, shall give rise to
the presumption that suchBALOBCOX
priorCD
installments have been paid.
Presumption on receipt of
principal of or later
installment. (Art. 1176)

The above presumptions are

disputable, hence, they may be
rebutted by contrary evidence. If
the presumption is conclusive,
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then no evidence to the contrary
may be admitted.
Remedies of the creditor to
enforce payment. (Art. 1177)

1. Pursue the property in the possession of the

debtor, except those exempt by law.
-This is usually by attachment where the
creditor files a court action to exact
fulfillment with a prayer that the court set
inside a property belonging to the debtor.
If the court decides in favor of the creditor
and the debtor does not pay, the property
attached will be ordered sold BALOBCOX
and theCD
proceeds thereof applied to the payment
of the obligation.
Remedies of the creditor to
enforce payment. (Art. 1177)

2. Exercise all the rights and bring all the

actions of the debtor except those
personal to him.
Ex: A owes D, D owes C. If C files a court
action against D to collect, he may ask
the court to order A not to pay D so that
in the event that the court rules in favor
C, A will be required to pay C. In effect,
C is the exercising the right toBALOBCOX
collectCD
from A which is a right that belongs to
D.
Remedies of the creditor to
enforce payment. (Art. 1177)

3. Impugn the acts which the debtor may have

done to defraud his creditors (accion
pauliana)
Ex: D owes C P50,000. To defraud C. D sells his
lot, his only property, to B who knows of the
fraudulent of D. C may ask the court to
order the rescission of the sale made by D.
Once the sale is rescinded and the lot is
returned to D, C may ask the court to order
its attachment and its sale at publicBALOBCOX
auction,CD
and the proceeds of the sale applied in
payment of his claim.
Rule on transmissibility of rights
and exceptions thereto (Art.
1178)
General rule: all rights acquired in virtue of
an obligation are transmissible. (Thus,
a creditor may assign his credit to a
third person or such right is
transmitted to the heirs upon his
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death)
Rules on transmissibility of
rights and exception
thereto. (Art. 1178)
Exceptions to the rule (Art. 1178)
1. If the law prohibits the
transmission of the right.
- Thus, the rights of a general partner
are not transmitted to hisBALOBCOX
heirsCD
upon his death.
Rules on transmissibility of
rights and exception
thereto. (Art. 1178)
Exceptions to the rule (Art. 1178)
2. If the parties agreed against
transmission.
- Thus, the right is not transmitted to an
assignee or to the heirs if there was a
stipulation to that effect between theCD
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parties.
Rules on transmissibility of
rights and exception thereto.
(Art. 1178)
Exceptions to the rule (Art. 1178)
3. If the right is by nature not transmissible.
Ex. S was granted a scholarship grant by a
school after a series of examination and
interviews. S, however, dies with two
years still remaining before he finishes
his studies. The right of S to enjoy the
scholarship grant is not transmitted
BALOBCOXto
CD
his heirs because it is strictly personal.
DIFFERENT KINDS OF OBLIGATIONS

Primary classification under the Civil

Code
1. Pure Obligation
2. Conditional Obligation
3. Obligation with a Period
4. Alternative Obligation
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5. Facultative Obligation
DIFFERENT KINDS OF OBLIGATIONS

Primary classification under the Civil

Code
6. Joint Obligation
7. Solidary Obligation
8. Divisible Obligation
9. Indivisible Obligation
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10. Obligation with a Penal Clause
PURE OBLIGATION

- A Pure Obligation is one

without a term or
condition and its
demandable at once.BALOBCOX CD
PURE OBLIGATION

Example: I promise to give you

P5,000. This is immediately
demandable since there is
no term that must expire or a
condition that must happen
for the obligation toBALOBCOX
beCD
demandable.
CONDITIONAL
OBLIGATION
- A Conditional Obligation is
one whose demandability
or extinguish depends
upon the happening BALOBCOX
of aCD
condition.
CONDITIONAL OBLIGATION

Ex: 1. “I will give you my car

if you pass the CPA
examination”. The
condition here is
suspensive. You cannot
demand the delivery of my
car until you pass the CPA
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Examination.
CONDITIONAL OBLIGATION

Ex: 2. “I will let you use my car

until you pass the CPA
Examination”. The condition
here is resolutory. You may
demand the delivery of my
car now but you must return
it to me when you pass theCD
BALOBCOX

CPA Examination.
CONDITION

- It is an uncertain event
which wields an
influence on a legal
relationship. BALOBCOX CD
Classification of Conditions

A. Suspensive and Resolutory

1. Suspensive – This is a condition the
happening of which gives rise to
the obligation. This is also called
“condition antecedent” or
“condition precedent”. The
demandability of the obligation is
suspendend until the happening of
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the condition.
Classification of Conditions

A. Suspensive and Resolutory

2. Resolutory – This is a condition the
happening of which extinguishes
the obligation. This is also called
“condition subsequent”. The
obligation is demandable at once
but it shall be extinguishedBALOBCOX
uponCD
the hapening of the condition.
Classification of Conditions

B. Potestative, Casual and Mixed

1. Potestative – a condition that
depends upon the will of the
contracting parties.
a) if suspensive – the obligation is
void. (Art. 1182) Even if the
condition is fulfilled, the obligation
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is not demandable. (Example D is
to give C P500 if D goes to Baguio).
Classification of Conditions

B. Potestative, Casual and Mixed

1. Potestative – a condition that depends
upon the will of the contracting
parties.
a) Potestaive on the part of the debtor.
1. if suspensive – the obligation is
void. (Art. 1182) Even if the condition
is fulfilled, the obligation is not
demandable. (Example: D is toBALOBCOX
give CCD
P500 if D goes to Baguio).
Classification of Conditions

B. Potestative, Casual and Mixed

1. Potestative – a condition that
depends upon the will of the
contracting parties.
a) Potestaive on the part of the
debtor.
2. if resolutory – the obligation is
valid. (Example: D is to allow theCD
BALOBCOX
use of his car by C until D returns
from Baguio).
Classification of Conditions

B. Potestative, Casual and Mixed

1. Potestative – a condition that depends
upon the will of the contracting parties.
b) Potestaive on the part of the creditor –
the obligation is valid whether the
condition is suspensive or resolutory.(Ex:
1.D is to give C P50,000 if C goes to
Baguio. 2.D is to allow the use of his car by
C, until C returns from Baguio.
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Classification of Conditions

B. Potestative, Casual and Mixed

2. Casual – a condition that depends
upon chance or upon the will of a
third person. (Ex: 1.D is to give C
P50,000 if D wins first prize in the
lotto on the bet he placed this
morning. 2.D is to give C P50,000
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if X goes to Baguio.
Classification of Conditions

B. Potestative, Casual and Mixed

3. Mixed – a condition that depends
partly upon the will of one of the
parties and partly upon chance
or upon the will of a third person.
(Ex: D to give C P50,000 ifBALOBCOX
C willCD
marry X).
Classification of Conditions

C. Possible and Impossible

1. Possible – one that capable of
fulfillment in its nature and by
law.

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Classification of Conditions
C. Possible and Impossible
2. Impossible – one that is not capable
of fulfillment in its nature or due to
operation of law, such as “if you
can swim across the Pacific Ocean”
or “if you call X” In this case the
obligation and the condition are
void. (Art. 1183). BALOBCOX CD
Classification of Conditions
C. Possible and Impossible
Note: If the condition is not to do an
impossible thing, it shall be
deemed as not having been agreed
upon. (Art. 1183) Thus, the
obligation is immediately
demandable. (Ex. D is to give C
P50,000 if C does not swim across
the Pacific Ocean.)
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Classification of Conditions
D. Positive and Negative
1. Positive – this is a condition that
some event happen at a
determinate time. Here, the
obligation is extinguished as soon
as the time expires or it has
become indubitable that the event
will not take place. (Art. 1184)
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Classification of Conditions

D. Positive and Negative

1. Positive
Example: D is to give C P50,000 if C will marry X
on or before June 30, 2010. The obligation
will be extinguished on July 1, 2010 if C has
not yet married X as of June 30, 2010. If X
dies on June 1, 2010 before C has married
her, then the obligation is extinguished on
such date because there is no more doubt
that the marriage will not take place.
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Classification of Conditions
D. Positive and Negative
2. Negative – this is a condition that
some event will not happen at a
determinate time. Here, the
obligation becomes effective as
soon as the time indicated has
elapsed or it has become evident
that the event will not occur. BALOBCOX CD
Classification of Conditions
D. Positive and Negative
2. Negative
Example: D is to give C P50,000 if C will not
marry X on or before June 30, 2010. The
obligation becomes effective on July 1,
2010 if C has not yet married X as of June
30, 2010. If X dies on June 1, 2010 before
C has married her, then the obligation
becomes effective on such date because
there is no more doubt that the marriage
will not take place.
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Classification of Conditions
E. Divisible and Indivisible
1. Divisible – one that is capable of
partial performance. Under Art.
1183, if the obligation is
divisible, that part thereof which
is not affected by the impossible
or unlawful condition shall be
valid. BALOBCOX CD
Classification of Conditions
E. Divisible and Indivisible
1. Divisible
Example: 1) D is to give C a car if C finishes
his law course, and P1,000,000 if C
tops the Bar Examination. If D finishes
his law course, he may demand the
delivery of the car. However, he may
not demand the payment of
P1,000,000 if he does not top the Bar.
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Classification of Conditions
E. Divisible and Indivisible
1. Divisible
Example: 2) D is to give C a car if C finishes
his law course, and P1,000,000 if C
can get a copy of the test question in
the Bar Examination in advance. Even
if both conditions are fulfilled, C can
only ask for the delivery of a car from
D because the second condition is
unlawful.
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Classification of Conditions

E. Divisible and Indivisible

2. Indivisible – one that is not
capable of partial performance
by its nature or by law or
agreement of the parties.
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Classification of Conditions
E. Divisible and Indivisible
2. Indivisible
Example: D is to give C a car if C
finishes his law course and tops
the Bar, C must comply with both
conditions before he can ask for
the delivery of a car from D.
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Effect of fulfillment of
suspensive condition (Art.
1187)

General rule: the effect of the

fulfillment of the suspensive
condition retroacts to the day
the constitution of the
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obligation.
Effect of Fulfillment of
Suspensive Condition (Art.
1187)
Exceptions:
1. In reciprocal obligations, the fruits
and interests shall be deemed to
have been mutually compensated,
i.e. each party shall keep the fruits
and interest received by him prior
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to the fulfillment of the condition.
Effect of Fulfillment of
Suspensive Condition
(Art. 1187)
Exceptions:
1. Example: On May 1, 2006, S agreed to sell
his land to B, and B agreed to pay the
price of P50,000 if X finishes his
Accounting degree on March 15, 2010. X
finished his Accounting degree as
stipulated. It was as if S was entitled to the
price and B to the land beginning on May
1, 2006. However S shall keep the fruits
on the land and B the interest of the priceCD
BALOBCOX
during the pendency of the condition.
Effect of Fulfillment of
Suspensive Condition
(Art. 1187)

Exceptions:
2. In unilateral obligations the
debtor keeps the fruits and
interest received before the
fulfillment of the condition.BALOBCOX CD
Effect of Fulfillment of
Suspensive Condition
(Art. 1187)
Exceptions:
2. Example: On May 1, 2007, S promised
to give B his land if B passed the Bar
Exam in February 2010. B passed the
Bar Exam as stipulated. It was as if B
is entitled to the land beginning on
May 1, 2007. However S will keep the
fruits on the land during the pendency
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of the condition.
Rights of the parties before the
fulfillment of the condition (Art.
1188)
Creditor – He may bring the appropriate actions
for the preservation of his right, such as
registering his claim with the Register of
Deeds, if appropriate, to notify all third
persons, or asking the debtor to provide a
security if the debtor about to BALOBCOX
becomeCD
insolvent.
Rights of the parties before the
fulfillment of the condition (Art.
1188)

Debtor – He may recover what he

has paid by mistake.

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Effect when the debtor voluntarily
prevents the fulfillment of the
condition.
- the condition is deemed fulfilled if the
debtor voluntarily prevents its
fulfillment. (Art. 1186); hence the
obligation becomes immediately
demandable. Here, there must be
an intent on part of the debtor to
prevent compliance withBALOBCOX theCD
condition and actually prevents its
fulfillment.
Effect when the debtor voluntarily
prevents the fulfillment of the
condition.
Example: D promised to give P10,000 to C,
a marathon athlete, if C finishes the
race during the athletic meet.
However, on the eve of the scheduled
race. D put a substance on the drink
of C who experienced weakening after
taking the drink, and hence, was not
able to join the race. Here, D must giveCD
BALOBCOX
P10,000 to C since the condition is
deemed fulfilled.
Rule in case of loss, deterioration
or improvement of determinate
thing. (Art. 1189)

1. Loss of the thing

a) Without debtor’s fault – obligation
is extinguished.
b) With a debtors fault – debtor is
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obliged to pay damages.
Rule in case of loss, deterioration
or improvement of determinate
thing. (Art. 1189)

Concept of Loss – A thing is

considered loss when it
perishes, or goes out of
commerce or disappears in a
such a way that its existence is
unknown or it cannot beCD
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recovered.
Rule in case of loss, deterioration
or improvement of determinate
thing (Art. 1189)

1. Concept of Loss – A thing is

considered loss when it
perishes, or goes out of
commerce or disappears in a
such a way that its existence is
unknown or it cannot beCD
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recovered.
Rule in case of loss, deterioration
or improvement of determinate
thing (Art. 1189)
1. Example: D is obliged to give C a specific
house if C passes the CPA Examination. If
the house is destroyed in a fire without the
fault of D before C passes the CPA
Examination. D’s obligation is extinguished
even if C, thereafter, passes the CPA
Examination. But if the house is destroyed
through the fault of D such as when he
placed inside the house highly flammable
chemicals which caused the fire,BALOBCOX
then DCD
shall be obliged to pay damages.
Rule in case of loss, deterioration
or improvement of determinate
thing (Art. 1189)
2. Deterioration of the thing
a) Without debtor’s fault – the impairment
shall be borne by the creditor, i.e. no
liability on the part of the debtor to pay
damages.
b) With a debtors fault – the creditor may
choose between; 1) Rescission, plus
damages, and 2) Fulfillment, plus
damages. BALOBCOX CD
Rule in case of loss, deterioration
or improvement of determinate
thing (Art. 1189)
2. Example: D is obliged to give a specific car to
C finishes his economics degree. The
deterioration of the car due to wear and
tear before C finishes his economics
degree will be borne by C when C later
finishes the said degree. However, if the
car is damaged in an accident due to D’s
fault, C, when he finishes his economics
degree may rescind the contract and ask
for damages, or ask D to deliver the car in
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its deteriorated condition plus damages.
Rule in case of loss, deterioration
or improvement of determinate
thing (Art. 1189)

3. Improvement of the thing

a) By nature or by time – the
improvement shall inure to the
benefit of the creditor. BALOBCOX CD
Rule in case of loss, deterioration
or improvement of determinate
thing (Art. 1189)
3. Improvement of the thing
a) Example: D is obliged to give his violin to
C if C finishes his course in music. If the
quality of the tone produced by the
violin had improved between the time
that D’s obligation was constituted and
the completion by C of his course in
music, then such improvement shall be
inure to the benefit of C. BALOBCOX CD
Rule in case of loss, deterioration
or improvement of determinate
thing (Art. 1189)
3. Improvement of the thing
b) At the expense of the debtor – the debtor will have
the rights granted to a usufructuary, i.e. he can
have enjoyment of the use of the improve thing
and its fruit. He may remove the improvements if
no damage is caused to the principal thing. If the
improvement cannot be removed without causing
damage to the principal thing, the thing and
improvement shall be delivered to the creditor
without any right on the part of the debtor to
indemnity. He may, however, set off the
improvements against any damage to BALOBCOX
the thing.CD
Arts 579 & 580) `
Rule in case of loss, deterioration
or improvement of determinate
thing (Art. 1189)

3. Improvement of the thing

b) Example: D is obliged to give his only car to C if C
finishes his economics degree. Before C finishes
his degree, D had the car repainted. In this case D
can continue using the car in its improved
condition. Upon completion by C of his degree, D
cannot removed the paint because it will cause
damage to the car. However, if he had cause a dent
on the car due to his fault, he may set off the cost
of repainting against the cost of damage brought by
such dent BALOBCOX CD
Rule in case of fulfillment of
resolutory condition (Art. 1190)

1. Upon the fulfillment of the resolutory

condition, the obligation is
extinguished.
2. The parties shall return to each other
what they have received.
3. In case of loss, deterioration or
improvement of the thing the
provisions of the above rule (Art.
1189) which pertain to the BALOBCOX
debtorCD
shall be applied to the party who is
bound to return.
OBLIGATION WITH A PERIOD

- An obligation with a period is one

whose demandability or
extinguishment is subject to the
term which must necessarily
come. In other words, there is a
day certain when the obligation
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will arise or cease.
Obligation with a Period

Example: 1) D is obliged to give his

car to C on May 1, 2010. On May
1, 2010 the obligation becomes
demandable by reason of the
expiration of the term or period.
The period here is one with a
suspensive effect or ex die.BALOBCOX CD
Obligation with a Period

Example: 2) On Jan. 1 2010, D allowed

C to use his car until May 1, 2010.
The obligation is demandable on
Jan. 1,2010 but on May 1, 2010.
D’s obligation is to let C use his car
is extinguished by reason of the
expiration of the term. The period
here is one with a resolutoryBALOBCOX
effectCD
or in diem. C must must therefore
return the car.
PERIOD AND DAY CERTAIN

- period is a space of time which

determines the effectivity or
extinguishment of an obligation.
Thus the space of time between
Jan. 1, 2010 and Jan. 1, 2011 is
a period the lapse of which will
cause an obligation to arise or
cease. BALOBCOX CD
PERIOD AND DAY CERTAIN
- A day certain is that which must
necessarily come although it may
not be known when. (Art. 1193) An
example is the death of a person
which will necessarily come. Thus,
if the obligation of D is to give C
P10,000 when X dies, the
obligation is with a period. BALOBCOX CD
Period distinguished from
condition

1. As to fulfillment – a condition is
an event that may or may not
happen, a period is an event that
must necessarily come, at a date
known beforehand, or at a time
that cannot be determined.BALOBCOX CD
Period distinguished from
condition

2. As to time – a condition may refer

to the future or to a past event
unknown to the parties; a period
always refers to the future.
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Period distinguished from
condition

3. As to influence on the obligation

– a condition causes an
obligation to arise or to ceases, a
period merely fixes the time for
the efficaciousness of an
obligation. BALOBCOX CD
Period distinguished from
condition
4. As to the will of the debtor – a
period that depends upon the
will of the debtor authorizes the
court to fix its duration. (Art.
1197, par 2), while a condition
that depends upon the will of the
debtor, which suspensiveBALOBCOX
shallCD
annul the obligation. (Art. 1182)
KINDS OF PERIOD

1. Ex die – This is a period with a

suspensive effect. Here the
obligation becomes
demandable upon the lapse
of the period. (Art. 1193)
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KINDS OF PERIOD

2. In diem – This is a period with

a resolutory effect. Here the
obligation is demandable at
once but is extinguished
upon the lapse of the period.
(Art.1193) BALOBCOX CD
Other Kinds of Obligation

1. Legal – A period that is fixed

by law.
2. Voluntarily – Thus fixed by
the parties.
3. Judicial – On that is fixed by
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the court.
Problem
Facts: “I will pay you my debt
when my means permit me to
do so.”
Question: Is this an obligation
with a period or with a
condition? BALOBCOX CD
Problem
Answer: This is an obligation with a
period. Here the remedy of the
of the creditor is to ask the
court to fix the period. (Art.
1180, 1197) Once the court
has fixed the period, it may no
longer change it as it becomes
a part of the agreement BALOBCOX
by theCD
parties.
Presumption as to who has
the benefit of the period
Whenever a period is designated in an
obligation, it shall be presumed to have
been established for the benefit of both
the creditor and the debtor, unless from
the tenor of the obligation or other
circumstances, it should appear that it has
been established for the benefit of only
one of the parties. (Art. 1196)
Therefore the debtor cannot be compelled to
perform, and the creditor cannot be toCD
BALOBCOX
accept performance, before the term
expires.
Presumption as to who has
the benefit of the period
Example: D borrowed P10,000 from C on
Jan. 1, 2010. The loan bears interest
at 10% per annum with both principal
and interest being due on Dec. 31,
2010. Before Dec. 31, 2010 C cannot
compel D to pay and deprive him of
the use of the money until the said
date. Neither may D compel C to
accept payment before Dec. 31, 2010
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and deprive C of the interest for
remaining term.
Period is for the benefit of
one of the parties.
1. For the benefit of the debtor – He
cannot be compelled to perform
his obligation before the the
expiration of the term, but he
may choose to perform before
such expiration at his option.
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Period is for the benefit of
one of the parties.
1. For the benefit of the debtor –
Example: D is obliged to pay C
P10,000 on or Dec. 31, 2010 D
cannot be compelled to pay
before Dec. 31, 2010. However,
he may choose to pay at any
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time before Dec. 31, 2010 or on
Dec. 31, 2010 at his option.
Period is for the benefit of
one of the parties.
2. For the benefit of the creditor –
He cannot be compelled to
accept performance before
expiration of the term, but he
may choose to demand
performance before BALOBCOX
suchCD
expiration at his option.
Period is for the benefit of
one of the parties.
2. For the benefit of the creditor –
Example: On Nov. 1, 2009, D
borrowed from C P10,000
“collectible” on or before June 30,
2010. C may demand payment on
June 30, 2010 or at any time
before the said date. However, D
cannot compel him to accept the
payment at anytime beforeBALOBCOX
JuneCD
30, 2010.
When debtor losses his right
to make use of the period if
it his for benefit

1. When he becomes insolvent,

unless he gives a guaranty or
security for the debt.
BALOBCOX CD
When debtor losses his right
to make use of the period if
it his for benefit

2. When he fails to furnish the

guaranties or securities that he
has promised.
BALOBCOX CD
When debtor losses his right
to make use of the period if
it his for benefit
2. Example: D borrowed P20,000 from C
promising to pledge his ring to C
secure the debt within one month C
gave D one year to pay the loan. D,
however, failed to pledge his ring
within the period agreed upon. In this
case, C can demand immediate BALOBCOX CD
payment even before the agreed due
date thereof.
When debtor losses his right
to make use of the period if
it his for benefit

3. When he impairs the said

guaranties or securities by his
own acts, or when through a
fortuitous event they disappear,
unless he gives new BALOBCOX
onesCD
equally satisfactory.
When debtor losses his right
to make use of the period if
it his for benefit
3. Example: D obtained a loan from C, the
same being secured by a chattel mortgage
on D’s car. The loan is payable within one
year. On the seventh month, the car was
razed by fire. C can demand immediate
payment unless D gives another security
that is equally satisfactory. This is true
even if the cause of the loss or impairment
BALOBCOX CD
was not due to the fault of D.
When debtor losses his right
to make use of the period if
it his for benefit

4. When he violates any undertaking

in consideration of which the
creditor agreed to the period.
BALOBCOX CD
When debtor losses his right
to make use of the period if
it his for benefit
4. Example: C granted a loan of
P50,000 to D giving D one year to
pay provided that D did not engage
in any gambling until he has paid
the debt. If D enters a casino to
play in the slot machine, say after
one month, C can already demand
BALOBCOX CD
immediate payment.
When debtor losses his right
to make use of the period if
it his for benefit

5. When he attempts to abscond.

BALOBCOX CD
When debtor losses his right
to make use of the period if
it his for benefit
5. Example: Thus, if the debtor has
been disposing all his property with
an attempt to leave his place of
business or residence to escape
his creditors, such creditors can
demand immediate payment of his
debts although their maturity dateCD
BALOBCOX
is not yet due.