 As to the effect on the obligation (Art 1181) 
Creditor – may demand performance anytime but not compelled to accept
Suspensive Condition or Condition Precedent/Antecendent   before period expires
-obligation arises; juridical tie does not appear; a mere hope; acquisition of
rights;
Retroactive effect when condition is fulfilled (Art.1187)
-The binding tie of the conditional obligation is produced from the time of
perfection, not happening of condition; can also be seen as rights of creditor
and debtor after fulfillment of the condition
Obligation To Give
-Bilateral (reciprocal) – deemed to have been mutually compensated
-Unilateral – usually no retroactive effect as deemed gratuitous; debtor shall
appropriate fruits and interests; UNLESS there was a different intention
Obligation To Do or Not To Do
-Court shall determine the retroactive effect of the condition
Rights of the creditor and debtor before fulfillment of the condition (Art.
1188)
Creditor – may bring proper action for preservation of his rights
Debtor – may recover what he paid by mistake; determinate thing (accion
reivindicatoria); indeterminate thing (solutio indebiti);
Resolutory Condition or Condition Subsequent
-obligation extinguished; tie of law is consolidated, becomes absolute; effect
flow but over it hovers possibility of termination; extinguishment or loss of
those already acquired
 As to the cause or origin (Art 1182)  law or the nature of obligation requires (Art. 1207)
Potestative – depends upon the will of one of the contracting parties; in the
power of one of the parties to realize or prevent condition; suspensive in
nature
-sole will of debtor – valid in resolutory;
-sole will creditor – valid in suspensive
Debtor’s promise to pay when it is not a condition but an obligation with a
period (Art 1180)  produces the effects of default only with respect to the creditor who
Casual – depends exclusively upon chance; will of a 3rd person or other
factors; not upon the will of the contracting parties
Mixed – depends upon the will of one of the contracting parties and other
circumstances, including the will of 3rd persons
 As to possibility (Art. 1183)
Physical impossibility – cannot exist or cannot be the nature of things
Legal Impossibility – contrary to law, moral, good customs, and public policy;
restricts certain rights which are necessary for the free development of
human activity
Effects of Impossible Conditions:
General Rule: Annul the obligation which depends upon them; both
obligation and condition void; must exist at the time of the creation of the
obligation
Exception: pre-existing obligations
-divisible obligation; simple or remunatory obligation; testamentary
disposition; negative impossible things (condition valid)
 As to mode: positive or negative (Art. 1184-1185)  As to Parties Bound
Positive Condition (Art. 1184) - a 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 as
it has become indubitable that the event will not take place although the
time specified has not yet expired
Negative Condition (Art. 1185)
1) Time has been fixed – an event will happen at a determine time, the
obligation shall become effective and binding: (a) from the moment the time
indicated has elapsed without the event taking place; or (b) from the
moment it has become evident that the event cannot occur, although the
time indicated has not yet elapsed
2) No time has been fixed – circumstances shall be considered to determine
the intention of the parties. Also applies to positive condition.
Constructive Fulfillment of Suspensive Condition (Art 1186)
Requisites: (1) condition is suspensive; (2) obligor prevents its fulfillment; (3)
he acts voluntarily or intentionally
Effects: condition shall be deemed fulfilled; does not require malice
Definition of loss, deterioration or improvement pending the happening of
the condition (Art. 1189 – 1190)
Loss – perishes (physical), goes out of commerce of man (legal), disappears in
such a way that its existence is unknown or it cannot be recovered (civil)
Deterioration - reduction or impairment in the substance or value of a thing
which does not amount to a loss
Improvement – anything added to, incorporated in, or attached to the thing
that is due
Effect of loss or deterioration (Art. 1189)
Loss without debtor’s fault – obligation is extinguished unless there is a
stipulation on the contrary; Art. 1262 par. 1
Loss with debtor’s fault – liable to damages upon fulfillment of condition
Deterioration without debtor’s fault - not liable for damage, creditor must
accept the thing in impaired condition
Deterioration with debtor’s fault – creditor may demand the thing or ask for
rescission, either case, may recover damages
Effect of Improvement
By Nature or Time – inures to the benefit of the creditor by virtue of principle
of retroactivity of conditional obligations
At Debtor’s Expense – only usufructuary rights
RECIPROCAL OBLIGATIONS (ART. 1191-1192)  interest for the payment but if payment made before due without interest
Reciprocity – arises from identity of cause and necessarily, two obligations
are created at the same time. Each party is a creditor and debtor of the other
(implied tacit resolutory condition – resolution); power to rescind to the
injured party
Alternative Remedies of Injured Parties In Case of Breach:
-action for performance or rescission
Requisites: (1) creditors failed to comply with the obligation; (2) obligor
chose rescission over fulfilment/performance impossible; (3) breach is
substantial
How made: requires judicial approval to produce legal effect; except if object
is not yet delivered and obligation has not yet been performed (extrajudicial
declaration sufficient)
-if injured party has already performed, court comes in to declare either
rescission as properly made or give a period to the debtor in which to
perform
Effect: extinguishes obligatory relation as if it had never been created;
mutual restitution (1385)
OBLIGATIONS WITH A PERIOD (ART. 1193, 1180)
Period – a space of time which, exerting an influence on obligations as a
consequence of a juridical act, suspends the demandability or determines
their extinguishment
Requisites: (1) Future; (2) Certain; (3) Possible
Period v. Condition
-must necessarily come (known or at a time which cannot be predetermined
-no effect on existence, but on demandability or performance,
-no retroactive effect unless stipulated
-always to the future
-if dependent on the will of the debtor, merely empowers court to fix such
period
As to Effect
Suspensive (Ex Die) (Art. 1193, par 1) – fulfillment a day certain has been
fixed, shall be demandable only when that day comes
Resolutory (In diem) (Art. 1193 par 2) – take effect at once but terminate
upon arrival of the day certain
As to Expression
Express v. Implied (Art 1197 and 1180)
As to Definiteness
Definite v. Indefinite (e.g. death)
As to Source
Conventional/Voluntary,Legal,Judicial
Effect of Loss or Deterioration, Improvement (Same with Art. 1189)
Effect of Payment in Advance (Art. 1195)
-unaware of the period may be recovered with fruits and interests (obligation
to give) (Also See Art. 1188)
Benefit of Period and Effects (Art. 1196)
ALTERNATIVE OBLIGATIONS
Debtor – may oppose premature demand but may validly pay anytime before
period expires
Both – presumption in absence of stipulation or in case of doubt; creditor
must give consent first before debtor may pay in advance
When debtor loses right to make use of period (Art. 1198)
Par. 1 – insolvency need not be declared in a proceeding, state of financial
difficulty is enough; Par 2 – does not furnish security or guaranty; Par. 3 –
security or guaranty impaired need not be total; through fortuitous event
total; in the sense of loss; Par 4 – violates undertaking; Par. 5 – attempts to
abscond
*Obligation becomes immediately demandable even if period has not yet
expired
When court may fix period
-judicial period; if obligation does not state a period and no period is
intended; period depends solely on the will of the debtor; “reasonable time”
JOINT AND SOLIDARY OBLIGATIONS
Joint obligations – debtors liable only for a proportionate part of the debt;
creditor entitled only to a proportionate part of the credit
Requisites: (1) plurality of subjects; (2) determination of the shares in the
demandiblity of fulfillment of obligation
*Solidary liability – only when the obligation expressly so states or when the
*Joint character of liability and equal shares is presumed (Art. 1208)
Effects
Extent of liability of debtor – only with respect to his particular share in the
debt; insolvency of a debtor does not increase the responsibility of the other
debtors
Extent of right of creditor – demand by one creditor upon one debtor
demanded and the debtor on whom the demand was made
In case of Novation (affects only the share of the creditor in whom it was
created), Compensation (only the share of the joint co-debtor in whom it
takes place), Confusion (does not extinguish joint obligation, only share
corresponding to the creditor or debtor in whom the two characters concur),
Remission (benefits only the joint co-debtor)
Solidary obligations – liable for the entire obligation, each creditor is entitled
to demand the whole obligation
Requisites: (1) plurality of subjects; (2) determination of shares in the
demandability of the fulfillment of the obligation (situation after payment)
As to Source
Legal - two or more principals appointed an agent for common transaction
(Art. 1915); bailees to whom a thing is loaned; tort feasors (Art. 2194);
officious managers (Art. 2157); surety is solidarily liablewith the principal (Art.
2047(2)); two or more persons civilly liable for a felony (Art. 109 RPC)
Conventional – stipulation of parties; Real – nature of obligation so requires
Active – solidarity of creditors; each has right to collect the whole of the
prestation from the common debtor (mutual agency)
Passive – solidarity of debtors; each is liable to pay the whole to the common
debtor (mutual guaranty)
Mixed – simultaneously active and passive
As to Uniformity
Uniform – same terms and conditions for all
Varied and non uniform – only the portion due at the time of the demand is
collectible from any of the debtors or by anyone of the creditors (Art. 1211)
Effects
Solidary Creditor to Common Debtor
Right to demand – debtor may pay any solidary debtor but if a judicial
demand is made against him, he must pay only the plaintiff (Art. 1214);
demand made against one debtor shall not be an obstacle to those which may
be subsequently be directed against others (Art. 1216); payment by one
debtor extinguishes the obligation (Art. 1217 (1))
In case of Novation, Compensation, Confusion, Remission by a Creditor –
extinguishes the obligation without prejudice to the provisions of Art 1219
(responsibility of the solidary co-debtor with respect to reimbursement prior
to his remission (Art. 1215 (1)).
Solidary Creditor to Co-Creditor/s
In case of Novation, Compensation, Confusion, Remission – creditor who have
executed the act as well as who collected the debt shall be liable to others for
the share in the obligation (Art. 1215 (2))
Prejudicial acts prohibited (Art 1212) – may do whatever is useful to others
but not anything which may be prejudicial; prejudicial acts valid as to debtors
(Art. 1215)
Assignment of rights not allowed (Art 1213) – implies mutual confidence
Solidary Debtor to Common Creditor
Obligation to Perform – each of the solidary co-debtor is bound to render the
entire compliance with the prestation (Art. 1207)
In case of Novation, Compensation, Confusion, Remission by a Creditor –
extinguishes the obligation without prejudice to the responsibility of a
solidary co-debtor with respect to reimbursement prior to his remission (Art.
1215 (1))
Solidary Debtor to Co-Debtors
In case of payment of a co-debtor – payment by one extinguishes the
obligation (Art. 1217); may reimburse from co-debtors their share with the
(Art. 1217 (3)); if one is insolvent will be borne by his co-debtors in proportion
(Art. 1217 (3)); payment of co-debtor cannot be reimbursed if obligation has
prescribed or become illegal (Art. 1218); also see Art 1215 and 1219;
remission of the whole obligation obtained by one debtor does not entitle him
to reimbursement from co-debtors (Art 1220)
In case of Fortuitous Event (Art 1221)
Defense Available to a Solidary Debtor (Art. 1222)
Four Types
(1) Those derived from the nature of the obligation – a total defense (vices of
consent, cause of action has prescribed, entire obligation is void, voidable at
the instance of “all of them” if can only be just one
(2) Personal Defense – e.g. minority, fraud, insanity, violence, intimidation
(total), special terms or conditions affecting part of obligation (partial)
(3) Defenses pertaining to his share – share is not yet due
(4) Those personally belonging to the other co-debtors -co-debtor’s share is
not yet due; in suretyship effect of extension given to the principal debtor
without the consent of surety extinguishes the latter’s obligations
Effects of Defenses
(1) All the solidary co-debtors are benefitted
(2) Only him is benefitted (exclusively)
(3) Partial defense
JOINT INDIVISIBLE OBLIGATIONS (ART 1209)
Joint Indivisible Obligations – several creditors or debtors but the prestation is
indivisible, obligation is joint unless solidary has been stipulated
-the indivisibility does not necessarily give rise to solidarity. Nor does
solidarity of itself does not imply indivisibility (Art. 1210)
Effects: If division is impossible, the right of creditors may be prejudiced only
by their collective acts (Art. 1210)
In case of breach: give rise to indemnity, debtors ready to fulfill obligation
shall not contribute to indemnity beyond their portion of the price (Art. 1224)
DIVISIBLE AND INDIVISIBLE OBLIGATIONS
Divisible Obligations – susceptible of partial performance
Divisibility of things v. Divisibility of Obligations
Test of Divisibility: intention of parties, purpose of prestation, nature of the
thing, provisions of law affecting the prestation
Kinds: Natural (1225 (1)), Legal (1225(2)l, Conventional(1225(3))
Presumption of indivisibility (Art 1225 (1)) – no partial performance
Presumption of divisibility (Art 1225 (2)) – partial performance, to do
Art 1224 (4) – divisibility/indivisibility of not to do by character of prestation
Effects: one debtor and one creditor does not alter or modify the provisions of
Chapter 2 (Nature and Effect of Obligations), thing should be completely
delivered (Art. 1223)
Except: substantially performed (1234); accepts performance without protest
(1235)
Cessation: natural – conversion to damages, conventional/legal – novation,
death of creditor (among heirs)
Various prestations due but only one performance sufficient (Art 1199)
Right of Choice – belongs to the debtor unless granted to creditor/3rd
persons, but no right of choice for impossible or unlawful object of obligation
(Art. 1200)
Effect of Notice of Choice – becomes simple obligation, irrevocable (Art 1205)
When Notice Produces Effect (Art. 1201) – any form (oral, written, tacit), even
duly authorized representatives can give and accept notice
Effect of Loss/Impossibility of one of the prestations
(Art. 1202) – debtor loses right of choice if reduced to only one practicable
(Art 1203) – if through creditor’s act, debtor may rescind the contract with
damages
(1204) – fault of debtor all lost – value of last thing disappeared plus damages
(1205) – some lost with fault– creditor may choose remaining or the price of
the one lost; without fault – may deliver any of the remaining
FACULTATIVE OBLIGATIONS
Only one prestation but debtor may render another in substitute (Art. 1206)
Right of Choice: Debtor only
Effect of Loss and Nullity: principal prestation – invalidate the obligation and
debtor liable; loss of substitute will not affect the obligation unless
substitution has been made; no obligation for principal prestation if loss was
fortuitous
OBLIGATIONS WITH A PENAL CLAUSE
-applies to obligation that contains an accessory undertaking; generally object
is a sum of money
-certain, already exists (principal), dependent on non performance of principal
obligation to be enforceable; may not choose to perform obligation
KINDS
As to Effect
Subsidiary – only the penal clause
Complementary - both principal and penal clause can be enforced
As to Source: Conventional or Legal As to Purpose: Punitive or Reparatory
Demandability of Penalty (Art 1226 par 2)
Proof of Actual Damages not Necessary (Art 1228) – for reparatory
Effects of Penal Clause (Art 1226
-Penalty substitutes the indemnity for damages with payment and interest in
case of non compliance (Art. 1226 par 1)
-Non exempt of debtor from non-performance of principal obligation (Art.
1227)
-Creditor cannot demand both performance and penalty (Art 1227)
-Creditor cannot collect other damages in addition to penalty (Art 1226)
Except: express provision, refuses to pay penalty, guilty of fraud (Art. 1226)
When penalty will be equitably reduced (Art 1229) – if unconscionable
Nullity of Principal Obligation or Penal Clause (Art 130) – accessory follows
principal
EXTINGUISHMENT OF OBLIGATIONS (ART 1231)
Payment or Performance (Art 1232) – fulfillment of the prestation
Requisites: (1) Who can pay; (2) To whom payment may be made; (3) What is
to be paid “identity”; (4) How is payment be made “Integrity”
Who Can Pay in General: debtor; authorized agent; heirs; successors in
interest
Exceptions: 3rd person who is an interested party (surety, guarantors, co-
debtors, etc) (Art. 1302(3)) – valid payment, debtor to reimburse fully, 3 rd
person subrogated to the rights of creditor; 3rd person not an interested
party but with consent of debtor (Art. 1302 (2)) (1236 par 1) – full
reimbursement, legal subrogation, creditor may refuse to accept payment;
3rd party not interested w/o consent of debtor, without knowledge or against
the will of debtor (Art 1236 par 2, 1237, 1236 par 1) -reimbursement to the
extent of the benefit, cannot compel debtor to subrogate him; 3rd person
who does not intent to be reimbursed (art 1238) – payment deemed as a
donation (must be in proper form if 5k above)
In obligation to give – not valid if no free disposal and no capacity to alienate
(Art. 1239); minor entered contract without consent of parent/guardian, no
right to recover fungible things delivered (Art. 1427)
To Whom Payment is Made in General: creditor; his successor in interest; any
person he authorized to receive it (Art. 1240)
Except: incapacitated persons (Art. 1241, par. 1) – when he kept the thing and
benfited from it; 3rd person (Art. 1241 par 2) – redounded to the benefit of
the creditor; when proof of benefit not required (Art 11241 par 3, Art 1242) –
if acquires creditor’s rights, creditor ratifies, by creditor’s conduct. possession
of credit (Art. 1242) (debtor is released); in case of active solidarity - may pay
anyone but should pay the one who made a demand judicial or extrajudicial
(Art 1214); Garnishment (Art 1243) – judicially declared to retain the debt not
valid if paid
What is to be paid (Identity) in General: the very prestation due
Specific cases: to give a specific thing (Art. 1244)- cannot be a different one; to
give a generic thing (1246) – quality; to pay money (Art 1249, 1250) – legal
tender; extraordinary inflation or deflation must be declared; commercial
documents may be accepted but only suspends demandability not extinguish
obligation
Payment of Interest – no interest due unless stipulated in writing (1956); must
be satisfied first before principal (1253)
How Payment is Made (Integrity) in General: partial payment not allowed,
creditor cannot compel to accept (1233)
Except: contrary stipulation (1248 par 1); debt partly liquidated and
unliquidated (Art 1248 par 2); substantial performance (Art. 1234); estoppel -
when obligee accepts incomplete or irregular performance (Art. 1235)
Presumption in payment of interests and installments – if a latter installment
received without reservation to prior ones, said installments presumed to
have been paid (Art 1176 par 2)
When is payment to be made in General: when due and demandable; can be
made prior if for benefit of debtor; and if creditor consents to; delay (Art
1169)
Where payment is to be made: in place expressly designated (Art. 1251 par
1); domicile of debtor (Art 1251 par 3); if debtor changes domicile expenses
borne by him (Art 1251 par 4)
Extrajudicial expenses requirement by the payment shall for the account of
the debtor with regard to the judicial costs (Art 1247)
APPLICATION OF PAYMENTS (Art 1252)
-Designation of debt which is being paid by a debtor who has several
obligations of the same kind in favor of one creditor
Requisites: same debtor, same creditor, various debts (liquidated, does not
apply to give specific but to generic), obligations due, payment not enough,
debtor has preferential rights to choose the debt
Rules: see payment of interest (1253); most onerous to debtor (1254)
Payment by Cession (Art 1255)
-Debtor cede or assign property to creditors in payment of his debts through
the net proceeds
Requisites: plurality of debts, plurality of creditors, complete/partial
insolvency, abandonment of all debtor’s property not subject to execution,
acceptance or consent of creditors
Effects: creditors do not become owners but assignees, debtor released from
obligation, creditor will collect credits in order of preference
Dation in Payment (Dacion en Pago) (Art 1245)
-Delivery and transmission of ownership of a thing by the debtor and to the
creditor as an accepted equivalent of the performance of obligation
Requisites: consent of creditor, will not prejudice other creditors, debtor not
judicially insolvent, not a pactum commissorium
Effects: extinguishes payment to the extent of the value at the thing to be
delivered; a pledge if delivered
Tender of Payment and Consignation (1256)
-act of offering the creditor what is due him together with a demand that the
creditor accept
When tender and refusal not required (Art 1256 par 2) – creditor absent or
unknown, incapacitated to receive payment, without just cause refused
receipt, two or more persons claim the same right to collect, title of obligation
has been lost
Two Notice Requirement (Art 1257 par. 1) – first notice (Art 1258 par 2) –
second notice – to enable creditor to withdraw the thing; non compliance
consignation ineffectual (Art 1257 par 2)
Effects: charge against the creditor when properly made (Art. 1256 par 1),
expenses charged to creditor (Art 1259)
Withdrawal by debtor before acceptance by creditor or approval by the court
(Art. 1260)
Withdrawal by debtor after proper consignation(Art 1261) – with consent of
creditor, the latter loses every preference over the thing; revival of obligation
but guarantors, sureties, solidary debtors released