Different Kinds of Obligation (Art.

1179-1192)

• Classification of Obligations

1. Primary Classification 2. Secondary Classification

a. Pure and Conditional a. Unilateral and Bilateral

b. Obligations with a Period b. Real and Personal
c. Alternative and Facultative c. Determinate and Generic
d. Joint and Solidary d. Civil and Natural
e. Divisible and Indivisible e. Legal, Conventional and Penal
f. Obligations with a Penal Clause

“Art. 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.”

A. Definition of Pure Obligation

• A pure obligation is one whose effectivity or extinguishment does not depend upon the fulfillment or non-fulfillment of a
condition or upon the arrival of a period.

• The most distinct characteristic of a pure obligation is its immediate demandability.

• Immediate demandability does not mean immediate performance. Although the creditor can demand the performance of the
obligation immediately, a reasonable period of grace when to perform the obligation should be given.

• Examples: A obliges himself to pay B P500.

B. Conditional Obligation

• An obligation whose consequences are subject to the fulfillment of a condition.

• A condition is a future and uncertain even, upon the happening of which, the effectivity or extinguishment of an obligation
(right) subject to it depends.

• Examples:

i. when you pass Obligations and Contracts

ii. if you marry Anton

• A condition may also refer to a past but unknown event. In this case, the past event itself is not the condition but the knowledge
or ascertainment of a fact as to the past event which at the moment is unknown to the parties.

• Example:

i. X is the owner of a parcel of land being claimed by Y. Last week, the Supreme Court rendered a decision
upholding the right of X. However, X has not yet received the notice that he had won the case. Now X obliged
himself to sell the land to B, should he win the case.

Under the facts, X would be bound to sell the land to B upon receipt of the notice.

• Two Principal Kinds of Conditions

1. Suspensive Condition- the fulfillment of the condition gives rise to an obligation; results in the acquisition of rights arising
out of such obligation

2. Resolutory Condition- the fulfillment of the condition results in the extinguishment of the obligation already existing
“Art. 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 1197.”

• The obligation to pay in this case is deemed with a period.

• A period is a future and certain event upon the arrival of which the obligation subject to it either arises or is extinguished.

• Example: A obliges himself to pay when his means permit him to do so.

• In this case, what depends upon the debtor’s will is not whether he should pay or not for indeed he binds himself to pay. What is
left only to the will is the duration of the period.

• If the debtor and creditor cannot agree as to the period, upon application, the court shall fix the period as may under the
circumstances have been probably contemplated by the parties. Once fixed, the period cannot be changed by the parties.

• Other cases: as soon as the debtor has the money, little by little, as soon as possible, when I am in the position to pay, when I
can afford, when I have the money

“Art. 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”

• In suspensive condition (condition precedent), the birth or effectivity of the obligation is suspended until the happening or
fulfillment of the event which constitutes the condition.

• Examples:

1. A obligates himself to give B P100,000 if the latter gets married to C. In this case, B cannot acquire the P100,000 unless he
gets married to C.

2. X obligates himself to give Y house a lot if the latter passes the bar examination in his first attempt. The

condition here is also suspensive in character because Y cannot acquire the house and lot immediately. There is a need for Y to
pass the bar examination at his first attempt.

• In resolutory condition (condition subsequent), the happening or fulfillment of the condition results in the extinguishment of the
rights which are already acquired by virtue of the obligation.

• Examples:

1. In a contract with a right of repurchase, the vendor a retro sells a property to a vendee a retro but with express reservation of
right to repurchase. Hence if a contract of repurchase is perfected, the right of vendee a retro is not absolute. It may be
extinguished or lost if the vendor a retro exercises his right to repurchase.
2. X binds himself to support Y until Y graduates from college. Here, the right is already acquired by Y- the right to receive
support. Such right will be extinguished or lost once the condition (graduating from college) is fulfilled.

3. Parks vs. Province of Tarlac Case

“Art. 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.”

• Article 1182 talks about the effects of potestative condition, casual condition and mixed condition.

A. Potestative Condition

• a condition which depends upon the sole will of one of the contracting parties is known as potestative condition.

• Effects of Potestative Condition

1. If the potestative condition is solely dependent on the will of the debtor, we need to distinguish:

i. If the potestative condition is attached to an obligation which is suspensive in character, both the condition and
obligation are void. Example: I will pay you if I want; as soon as I harvest my fish in the pond
ii. If the potestative condition is attached to an obligation which is resolutory in character, then both the condition
and obligation are valid. In this case, although the fulfillment depends solely upon the will of the debtor, it is valid
because the fulfillment of the condition merely causes the extinguishment of rights already acquired. Besides, it is
the debtor who is naturally interested in its fulfillment.
iii. If the potestative condition is present in a preexisting obligation, the condition is void but the obligation is valid.
The debtor has still the obligation to comply with the pre-existing obligation. Example: A borrowed P2,000 from

B. There was partial payment of P1,000. The balance is payable if A is in the mood to do so.

2. If the potestative condition is solely dependent on the will of the creditor, then both the condition and obligation are valid. The
reason for this is because in an obligation, it is the obligee or the creditor who is naturally interested in the fulfillment of the
obligation. It is up to the creditor whether to enforce his right or not. Example: I will give you my notes if you want them.

B. Casual Condition

• the condition depends upon chance or upon the will of a third person or partly upon chance and partly upon the will of third
person.

• Effect of Casual Condition

1. The conditional obligation is valid.

2. Examples: I will give you P500 if Atty. Hilbay will win the 2019 Senatorial election; I will give you P500 if it rains today at
7:00 pm.

C. Mixed Condition

• the condition depends upon the will of a contracting party and other factors which may be upon chance or will of a third person.

• Effect of Mixed Condition

1. The conditional obligation is valid.

2. Example: I will pay my debt to you when my house is sold. The condition is mixed. The condition not only depends on the
debtor but also upon the concurrence of other factors such as the acceptability of price and other conditions of sale.

“Art. 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.”

• Article 1183 talks about the effects of possible and impossible conditions.

A. Possible Condition

• when the condition is capable of realization according to its nature or when they are not contrary to laws, morals, good customs
public order or public policy.

• The conditional obligation is valid.

B. Impossible Conditions

• conditions not capable of realization by its nature or when they are contrary to law, morals, good customs, public policy or
public order.

• The first kind is referred to as Physically Impossible conditions while the second kind refers to Legally Impossible conditions.

• Effects of Impossible Conditions

1. Conditional Obligation is void. The debtor knows that his obligation cannot be fulfilled. He has no intention to comply with his
obligation. Example: I will give you P500 if you will be able to talk to the inhabitants in Mars; if you will secure an annulment
against your wife

2. Conditional Obligation is valid. If the condition is not to do an impossible, it shall be considered as not having been agreed
upon. It will be disregarded. As a consequence, the obligation becomes pure and therefore immediately demandable. Example: I
will give you P300 if you will neither sell nor use any prohibited drugs.

3. Only the affected obligation is void. If the obligation is divisible, the part which is not affected by the impossible or unlawful
condition shall be valid. Thus if A binds himself to pay B his debt in two installments- the first installment conditioned upon the
delivery of opium and the second installment conditioned upon marrying C, since the obligation is divisible, the second part
which is not unlawful will not be affected. It remains as valid. The first part is void.

4. Only the condition is void. If the obligation is a preexisting obligation, and, therefore, does not depend upon the fulfillment of
the condition which is impossible, for its existence, only the condition is void.

“Art. 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.”

• This article talks about the effects of a positive condition.

• Positive Condition

• the happening of an event at a determinate time.

• The obligation is extinguished:

1. As soon as the time expires without the event taking place; or

2. As soon at it has become indubitable that the event will not take place although the time specified has not yet expired

• X obliges himself to give B P10,000 if B will marry C before B reaches the age of 23.

“Art. 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.If no
time has been fixed, the condition shall be deemed fulfilled at such time as may have probably been contemplated, bearing in
mind the nature of the obligation.”

• This article talks about the effects of a negative condition

Negative Condition

• an event will not happen at a determinate time.

• The obligation shall become effective and binding:

1. from the moment the time indicated has elapsed without the event taking place; or

2. from the moment it has become evident that the event cannot occur, although the time indicated has not yet elapsed.

• X binds himself to give B P10,000 if B is not yet married to C on December 30.

“Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.”

• The principle in Article 1186 is called Constructive Fulfillment of an Obligation

• Requisites:

1. The condition is suspensive; (but the principle applies also to an obligation subject to a resolutory condition with respect to the
debtor who is bound to return)

2. The obligor actually prevents the fulfillment of the condition; and

3. He acts voluntarily.

• For this rule to apply there must be concurrence between intention and action. There is intention on the part of debtor to prevent
the fulfillment plus there must be actual act to prevent which is voluntary and willful in character. Intention is internal while an
action is external.

• Example: A promises to give B an Ipad if B will sing in class on Wednesday. On Tuesday night, A gave a cake with peanuts on
it to B knowing that B is allergic to it. As a consequence, B was hospitalized and was not able to go to class.

“Art. 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 interests 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 not to do, the courts shall
determine, in each case, the retroactive effect of the condition that has been complied with.”

• Retroactive Effects of Fulfillment of Suspensive Condition in Obligation to Give

1. Distinguish between a unilateral and reciprocal obligation.

2. When the obligation is unilateral, the fruits and interests (during the pendency of the fulfillment of the condition) shall be for
the account of the debtor. In a unilateral obligation, only one party has the duty. It is the debtor. The debtor does not receive any
equivalent or valuable consideration from the obligee.

3. 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. Thus in an obligation that goes like this- A obligated himself to
deliver a certain parcel of land with mango trees on it to B for P100,000 subject to a condition which is suspensive in character,
and such condition was perfected two years after the perfection of contract, a literal application of the retroactive effect would
mean- A has the obligation to deliver not only the land but also the mango trees and the fruits to be gathered within the two year
period. At the same time B has the obligation to pay not only the principal amount of P100,000 but also interest. But because of
Article 1187, it provides that the fruits and interest during the pendency of the condition shall be deemed to have been mutually
compensated.
• Retroactive Effects of Fulfillment of Suspensive Condition in Obligation to give and to do and in not to do

• In obligations to do or not to do, retroactivity depends on the determination of the court.

• In obligation to give there is retroactivity. Example: In January 2018, A sold a parcel of land to B subject to a condition that he
wins a case in court involving the land. A later sold the land to C on March 2018. A won the case December 2018. Between B
and C who has a better right? It is B.

“Art. 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.”

• Article 1188 talks about the rights available to the parties (debtor and creditor) pending the fulfillment of the suspensive
condition.

• Rights of Creditor

• During the pendency of the suspensive condition, the obligee has only a mere hope or expectancy. This hope or expectancy,
however is protected by law.

• Inasmuch as the obligee has an expectant right to the eventual fulfillment or performance of the obligation, it is but just and
proper that the law accords him the right to avail of remedies for the protection or preservation of such right.

• Example:

• If the obligor has promised in writing to sell a parcel of land to the obligee upon a happening of a certain condition, and
subsequently before the fulfillment of the condition, he changes his mind and finally decides to sell the land to another person,
the obligee can bring an appropriate action such as the issuance of writ of injunction to prevent the sale.

• Rights of Debtor

• He is entitled to recover what he has paid by mistake prior to the happening of the suspensive condition. This right is granted to
the debtor because the creditor may or may not be able to fulfill the condition imposed and hence, it is not certain that the
obligation will arise.

“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;

(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.”

• Requisites for 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 a suspensive condition;

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

1. Physical Loss- when a thing perishes as when a house is burned and reduced into ashes;

2. Legal Loss- when a thing goes out of commerce or when a thing heretofore legal becomes illegal

3. Civil Loss- when a thing disappears in such a way that its existence is unknown or even if known it cannot be recovered

• Rules in case of loss, deterioration or improvement during the pendency of suspensive condition

1. Loss of thing without debtor’s fault- the obligation is extinguished and the debtor is not liable.

2. Loss of thing through debtor’s fault- the debtor is liable to pay damages. The obligation is converted into an obligation for the
payment of damages.

3. Deterioration of thing without the debtor’s fault- a thing deteriorates when its value is reduced or impaired with or without the
fault of the debtor. If the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor.

4. Deterioration of thing through debtor’s fault- the creditor may choose between rescission or fulfillment with payment of
damages in either case.

5. Improvement of the thing by nature or by timea thing is improved when its value is increased or enhanced by nature or by time
or at the expense of the debtor or creditor. In this case, the improvement inures to the benefit of the creditor.

6. Improvement of thing at the expense of the debtor- the debtor shall have no other right than that granted to a usufructuary.

• Usufruct- is the right to enjoy the use and fruits of a thing belonging to another with the obligation of preserving it.

• Usufructuary- the person who enjoys the use and fruits in the property subject of a usufruct.

• Rights of Usufructuary

1. Reimbursement of necessary expenses

2. In case of useful and luxurious expenses, he shall have no right to be indemnified therefor. He may however remove such
improvements should it be possible without damage to property.

3. Right of set-off (improvements-damages)

“Art. 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 the 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 the 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.”

• Effects of Fulfillment of Resolutory Condition

1. The parties are obliged to return to each other what they have received under the obligation. There is a return to the status quo.

2. 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 parties intend the return of the car.

3. The obligation of mutual restitution applies not only to the thing received but also to the fruits and interests. The exception to
this is when the intention of the parties is otherwise.

4. Example: X binds himself to give Y P500 a month until Y passes the CPA examination. If Y passes the CPA examination, he
need not return the amounts he has received. It is clear that the parties do not intend the return of the same.

5. In obligations to do or not to do, the courts shall determine the retroactive effect of the fulfillment of the resolutory condition
as in the case where the condition is suspensive.

6. The rules provided in Articles 1188 and 1189 are applicable.

“Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with
what is incumbent upon him. 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.”

• Kinds of Obligation According to the Person Obliged

1. Unilateral- when only one party is obliged to comply with a prestation.

2. Bilateral- when both parties are mutually bound to each other. Both parties are debtors and creditors of each other.

• Kinds of Bilateral Obligation

1. 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 each other.
Example: contract of sale, contract of lease

2. Non-reciprocal Obligations- are those which do not impose simultaneous and correlative performance 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 P5,000. Y, on the other hand, borrowed X’s car. The performance of X of his obligation to Y is
not conditioned upon the performance by Y of his obligation and vice versa.

• Remedies in Reciprocal Obligations

1. Action for specific performance (fulfillment) of the obligation with damages

2. Action for rescission of the obligation also with damages

• Note: The remedies are alternative and not cumulative. However, if the initial remedy chosen was fulfillment, the injured or
aggrieved party may instead seek rescission if fulfillment should become impossible.

• Rules/ Limitations on Right to Demand Rescission

1. The rescission contemplated by Article 1191 is a judicial rescission or one granted by the court.

2. When the contract provides for extra-judicial rescission then resort to court will not be necessary. But it must be noted that the
rescission is provisional only. It can still be questioned in the court.

3. The court shall order the rescission claimed unless there should be just cause for granting the party in default a period for the
performance of the obligation.

4. Rescission will not be granted for slight breaches of contract. The violation should be substantial as to defeat the object of the
parties in making the agreement.

5. If the thing subject matter of the obligation is in the hands of a third person who acted in good faith, rescission is not available
as a remedy.

“Art. 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.”

• Rules where both parties are guilty of breach

1. First infractor known- one party violated his obligation; subsequently, the other also violated his part of the obligation. In this
case, the liability of the first infractor should be equitable reduced.
2. First infractor cannot be determined- one party violated his obligation followed by the other, but it cannot be determined which
of them was the first infractor. The rule is that the contract shall be deemed extinguished and each shall bear his own damages