Law on

Obligations
and
Contracts
Article 1186, 1187, 1188, 1189,
1190, 1191, 1192

Yusi, Mark Lawrence

ARTICLE 1186

The condition shall be deemed fulfilled when

the obligor voluntarily prevents its fulfillment. (1119)

Yusi, Mark Lawrence

ARTICLE 1186
Constructive Fulfilment of suspensive
3 Requisites for the application of Article 1186
1. The Condition is Suspensive.
2. The Obligor actually prevents
the fulfillment of the condition
3. He acts voluntarily

Yusi, Mark Lawrence

 Yusi, Mark Lawrence

The Law does not require 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.
ARTICLE 1186
Constructive Fulfilment of resolutory condition
This applies also to an obligation subejct to a resolutory
condition with respect to the debtor who is bound to return
what he has received upon the fulfillment of the condition.
(Art. 1190)

Yusi, Mark Lawrence

 ARTICLE 1187
The effect 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 fruit interest 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 obligation to do and not to do, the court shall determine, in each case, the
retroactive effect of the condition that has been complied with. (1120) Yusi, Mark Lawrence
ARTICLE 1187
Yusi, Mark Lawrence

Retroactive effects of fulfillment of

suspensive condition
IN OBLIGATION TO GIVE
An obligation to give subejct to a suspensive
condition is only demandable when obligation is
fulfilled, then the effects of the fulfillment will
retroact to the day obligation was constituted
ARTICLE 1187
Yusi, Mark Lawrence

Retroactive effects of fulfillment of

suspensive condition
IN OBLIGATIONS TO DO OR NOT TO DO
• There is no fixed rule provided, However, this does not
mean that principle of retro activity is not applicable
• Courts are empowered by sound by sound discretion
and bering in mindintent of parties to determine
retroactive effect of suspensive condition that has been
complied with.
• It includes when retroactive effect takes or does not
take place
ARTICLE 1187
Yusi, Mark Lawrence

Retroactive effects as to fruits and interests

in obligations to give
IN RECIPROCAL OBLIGATIONS
no retroactivity because fruits and interest
receive during the waiting period of the
condition are mutually compensated. This is
necessary for convenience since the parties
would not have to render mutual accountign of
what they have received.
ARTICLE 1187
Yusi, Mark Lawrence

Retroactive effects as to fruits and interests

in obligations to give
IN UNILATERAL OBLIGATIONS
• Usually no effect since gratuitous
• Debtor receives nothing from creditor thus
fruits and interests belong to the debtor.
(Unless from nature, and if inferred that
intention of the person consulting the same was
different)
 ARTICLE 1188
The creditor may, before
fulfillment of condition, may bring 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 (1121a)

Yusi, Mark Lawrence

ARTICLE 1188
Yusi, Mark Lawrence

Rights pending fulfillment

RIGHTS OF CREDITOR
• He may bring appropriate actions for the
preservation of his right as a debtor, may render
the obligation useless upon happening of
condition
• He may go to court to prevent concealment of
property or to gave his right annotated in the
registry of property.
ARTICLE 1188
Yusi, Mark Lawrence

Rights pending fulfillment

RIGHTS OF DEBTOR
• He is entitled to recover what he has paid by
mistake due to suspensive condition.
• This right is granted to the debtor because the
creditor may not be able to fulfill the condition
and therefore it is not certain that the obligation
will arise.

Solutio Indebti- No one shall enrich himself for the

benefit of another
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:

Yusi, Mark Lawrence

ARTICLE 1189
Yusi, Mark Lawrence

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
ARTICLE 1189
Yusi, Mark Lawrence

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. (1122)
ARTICLE 1189
Yusi, Mark Lawrence

Requisites for application of Art. 1189

Only applicable if:

• Obligation is a real obligation
• The Object is a specific thing.
• The obligation is subject to suspensive
conditions
• The condition is fulfilled; and
• There is loss, deterioration or improvement of
the thing during the pendency of the condition
ARTICLE 1189
Yusi, Mark Lawrence

Kinds of loss

• Physical loss
• Legal loss
• when aa thign goes out of commerce or
become illegal
• Civil loss
• A thing disappears in a way that its existence
is unknown or cannot be recovered, whether
it’s a matter of fact or law.
ARTICLE 1189
Yusi, Mark Lawrence

Rules in case of loss, Deterioration of improvement

of thing or during pendency of suspensive condition
▫ LOSS OF THING WITHOUT DEBTOR’S FAULT
 Obligation is extinguished.
▫ LOSS OF THING THROUGH DEBTOR’S FAULT
 Debtor will be entitled to damages

▫ DETERIORATION OF THING WITHOUT DEBTOR’S

FAULT
 Debtor will have to pay for damage
ARTICLE 1189
Yusi, Mark Lawrence

Rules in case of loss, Deterioration of improvement

of thing or during pendency of suspensive condition
▫ DETERIORATION OF THING THROUGH DEBTOR’S
FAULT
 In cancellation, pay value of thing plus incidental damages
 In fulfillment of obligation with damages, pay for damages
plus incidental damages
▫ IMPROVEMENT OF THINGS BY NATURE OR BY TIME
 Creditor will benefit improvement

▫ IMPROVEMENT OF A THING AT EXPENSE OF

DEBTOR
 Debtor will have right granted to a usufructuary
with respect to the improvement he made on that
thing helf in usufruct
 Yusi, Mark Lawrence

The legal right of using and enjoying the fruits or profits of

something belonging to another

Meriam-Webster
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.

Yusi, Mark Lawrence

 Yusi, Mark Lawrence

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. (1123)
ARTICLE 1190
Yusi, Mark Lawrence

Effects of fulfillement of resolutory condition

▫ OBLIGATION TO GIVE
 When the resolutory condition on an obligation
to give is fulfilled, the obligation is extinguished
and the parties are obliged to return to each
other what they have received under obligation.
Includes fruits and interests.

▫ IN OBLIGATION TO DO OR NOT TO DO
 Courts shall determine the retroactive effect of
the fulfillment of there solutory condition as in
case where condition is suspensive
ARTICLE 1190
Yusi, Mark Lawrence

Applicability of Article 1189 to return party with

obligation to return
If X is the debtor and Y is the creditor. Pending
fulfillment of provision given by Y of X. Upon
the happening of the condition, X becomes
creditor with a right to demand the obligation
and Y to fulfill the obligation.

Happening of a resolutory condition has the same

effect on creditor as the happening of a suspensive
condition has on the debtor. An Obligation arises.
Fulfillment of resolutory condition turns creditor
into debtor and vice versa
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 upon him.

Yusi, Mark Lawrence

 Yusi, Mark Lawrence

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. (1124)
ARTICLE 1191
Yusi, Mark Lawrence

Kinds of Obligation according to person obliged

▫ UNILATERAL
 Only one party is obliged to comply with a
prestation

▫ BILATERAL
 Both parties are mutually bound to each other
and are both creditors and debtors.
ARTICLE 1191
Yusi, Mark Lawrence

Kinds of Obligation according to person obliged

▫ UNILATERAL
 Only one party is obliged to comply with a
prestation

▫ BILATERAL
 Both parties are mutually bound to each other
and are both creditors and debtors.
ARTICLE 1191
Yusi, Mark Lawrence

 RECIPROCAL OBLIGATION
• Arise from the same cause and in which each party is a
debtor and creditor of each other
• Fulfillment of others obligation = suspensive condition to his
obligation
• Non-fulfillment of others obligaions = resolutory condition
• Gives him right to demand rescission of contract non-
reciprocal obligations
• Do not impose the simultaneous performance of both parties
• Performance of one is not dependent on simultaneous
performance of the other
ARTICLE 1191
Yusi, Mark Lawrence

 REMEDIES IN RECIPROCAL OBLIGATIONS

Choice of remedy
-Incase one of the obligor does not comply
 Action for specific performance (fulfillment)
with damages
 Action for rescission of obligation with
damages
 Remedy of rescission for non-compliance
▫ Remedy is granted because of the breach
by other contracting party.
ARTICLE 1191
Yusi, Mark Lawrence

Court may grand guilty party term for performance

 Action for specific performance (fulfillment)
with damages
 Action for rescission of obligation with
damages
 Remedy of rescission for non-compliance
▫ Remedy is granted because of the breach
by other contracting party.
ARTICLE 1191
Yusi, Mark Lawrence

Remedies are alternative

 Injured party can only choose one remedy
 Exception: can choose rescission after
asking fulfillment, if fulfillment becomes
impossible, but once rescission is chosen,
can't ask forfulfillment
ARTICLE 1191
Yusi, Mark Lawrence

Limitation on right to deman rescission- Not absolute

• Resort to the courts
• Refers to the jusdicial Rescission
• Injured party must go to the courts
• Can't decide by themselves
• Power of courts to fix period
• Court has decision over giving guilty party a
period wherein he can perform obligation
ARTICLE 1191
Yusi, Mark Lawrence

Rescission without previous Judicial decree

• Where automatic rescission expressly

stipulated
• Needs at least written notice to other
pary
• No need for stipulation in contract
• Willing party may declare rescission
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.

Yusi, Mark Lawrence

ARTICLE 1192
Yusi, Mark Lawrence

Where both parties are guilty of breach

• First Infractor known

 One party violated his obligation
therefore the other party also violated
part of his obligation
 Liability of first infractor must then be
reduced
ARTICLE 1192
Yusi, Mark Lawrence

Where both parties are guilty of breach

• First Infractor cannot be

determined
 One party commited violation towards
his obligation followed by another,
indetermiante first contractor.
 Contract shall then be diminished and
both parties will have to bear their own
damages.