CHAPTER 2

NATURE & EFFECT

OF OBLIGATIONS
GROUP 1
DUTIES OF THE OBLIGOR IN OBLIGATIONS
TO GIVE: (REAL OBLIGATION)

1. To preserve the thing with the diligence of a good father of a

family, unless the law or the stipulation of the parties require
another standard of care. (1163)
2. To deliver the thing, with its fruits. (1164)
3. To deliver the accessories and accessions – if it is to deliver a
determinate thing. (1166)
1. DUTY TO PRESERVE THE THING

 Article 1163. Every person obliged to give something is also

obliged to take care of it with the proper diligence of a good
father of a family, unless the law or the stipulation of the
parties requires another standard of care. (1094a) 
 DIFFERENT DEGREES OF
DILIGENCE OR STANDARDS OF CARE:
Diligence required:
 Diligence of a good father of a family (ordinary) - diligence which a reasonably prudent man
exercises over his own property
Exceptions:
 Law (i.e. transportation code requires common carriers to exercised extraordinary diligence)
 Stipulation

Degrees of Diligence:
 Extra-ordinary
 Ordinary
 Slight
2. TO DELIVER THE THING INCLUDING ITS FRUITS (1164)

• Article 1164. The creditor has a right to the fruits of the thing

from the time the obligation to deliver it arises. However, he shall
acquire no real right over it until the same has been delivered to
him. (1095)
 NATURAL FRUITS- spontaneous products of animals or the soil, without human
intervention (i.e. plants or trees growing on the land by themselves)

 INDUSTRIAL FRUITS- fruits through cultivation or labor

 CIVIL FRUITS- rents, lease on land, dividends from shares, interest of amount loaned
 DIFFERENCE BETWEEN REAL
RIGHTS AND PERSONAL RIGHTS
ILLUSTRATIVE CASE:

• On August 1, D obliged himself to give C a particular dog on August 24.

• Before August 24, C has no right over the dog.
• C will only acquire a personal right against D only on August 24.
• If the dog is delivered to C on August 30, C acquires ownership or real
right only on August 30.
Article 1165. When what is to be delivered is a determinate thing, the creditor, in
addition to the right granted him by article 1170, may compel the debtor to make the
delivery.
If the thing is indeterminate or generic, he may ask that the obligation be complied
with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to two or more persons
who do not have the same interest, he shall be responsible for any fortuitous event
until he has effected the delivery. (1096)
REMEDIES AVAILABLE TO THE CREDITOR:
(1165)
OBLIGATION IS DETERMINATE/SPECIFIC:

1. Compel specific performance

2. Damages (1170)

OBLIGATION IS INDETERMINATE/GENERIC:

1. Demand performance
2. Ask that the obligation be complied with by a third person at the expense of the debtor
3. Damages
• When promised delivery to separate creditors:

“If the obligor delays, or has promised to deliver the same thing to two or
more persons who do not have the same interest, he shall be responsible for
any fortuitous event until he has effected the delivery. (1096)”
3. TO DELIVER THE ACCESSIONS AND ACCESSORIES (1166)

 Article 1166. The obligation to give a determinate thing includes that of

delivering all its accessions and accessories, even though they may not
have been mentioned.
General rule: Obligation to deliver the thing includes with it
the accessories and accessions.

Exception to the rule:

• required by law
• exclusion is expressly stipulated by the parties
Example:
 S sold his horse to B for P 15, 000
 No condition or date of delivery
 While in S’s possession, the horse gave birth to a colt
 B is entitled to the colt as part of the thing sold, entitlement reckons back
on the meeting of the meeting of the minds
POSITIVE PERSONAL OBLIGATION (1167)

Article 1167. If a person obliged to do something fails to do it, the same

shall be executed at his cost. 
This same rule shall be observed if he does it in contravention of the tenor of
the obligation. Furthermore, it may be decreed that what has been poorly
done be undone.
DUTIES OF THE OBLIGOR IN OBLIGATIONS
TO DO: (1167)

 If a person obliged to do something fails to do it, the same shall

be executed at his cost.
 This same rule shall be observed if he does it in
contravention of the tenor of the obligation. Furthermore, it may
be decreed that what has been poorly done be undone.
ILLUSTRATIVE CASE:

ROSENDO O. CHAVES, PLAINTIFF-APPELLANT,

VS. FRUCTUOSO GONZALES, DEFENDANT-APPELLEE.

• A delivered a typewriter to B for repair, cleaning and servicing, but B did not finish
the job despite multiple reminders from A, B returned the typewriter to A
unrepaired and with missing parts.
• A brought the typewriter to C, another repair shop, and cost him P58.75 for labor
and P31.10 for the missing parts for a total of P89.85.
• The lower court rendered judgment ordering B to pay only the cost for the missing
parts which is P31.10.

Question: Is B liable to pay also the cost for labor which amounts to P58.75?
NEGATIVE PERSONAL OBLIGATION (1168)

• Article 1168. When the obligation consists in not doing, and the

obligor does what has been forbidden him, it shall also be
undone at his expense.
DUTIES OF THE OBLIGOR IN OBLIGATIONS
NOT TO DO: (1168) –NEGATIVE PERSONAL
 When the obligation consists in not doing, and the obligor does
what has been forbidden him, it shall also be undone at his
expense.
EXAMPLE:

• S sold a land to B. It was stipulated that S would not

construct a fence on a certain portion of his land
adjoining that sold to B.
• If S constructs a fence in violation of the agreement, B
can have the fence removed at the expense of S.
SPECIFIC CIRCUMSTANCES AFFECTING
OBLIGATIONS IN GENERAL:
 Grounds to pay damages
 Fortuitous Event
 Presumptions
 Successive rights of the creditor
 Transmissibility of rights
DELAY, DEFAULT OR MORA; RULES (1169)

Article 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation. 
However, the demand by the creditor shall not be necessary in order that delay may exist: 
(1) When the obligation or the law expressly so declare; or 
(2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the
thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract;
or 
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform. 
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a
proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by
the other begins.
KINDS OF DELAY OR DEFAULT
MORA SOLVENDI

REQUISITES EFFECTS

Obligation must be liquidated, due Creditor may ask for damages

and demandable

Debtor must be guilty of non- Debtor shall bear the risk of loss
performance

There was demand made judicially or Debtor is liable even if the loss is due
extrajudicially to Fortuitous events.
MORA ACCIPIENDI
REQUISITES EFFECTS

Offer of performance by the Debtor Crditor is liable for damages

Refusal of the Creditor to accept Creditor shall bear the risk of loss

Refusal is without just cause All expenses for the preservation of

the thing after the delay shall be borne
by the Creditor
• COMPENSATIO MORAE - the delay of the obligor cancels the
delay of the obligee, vice versa

• AS IF NO DEFAULT IN BOTH PARTIES

GENERAL RULE: “NO DEMAND, NO DELAY.”

EXCEPTIONS:

1. When the obligation so declares

2. When the law so provides
3. When time is of the essence of the contract
4. When demand would be useless
5. When the debtor expressly acknowledges that he really is in default
EXCEPTIONS:
GROUNDS TO PAY DAMAGES (1170)

• Article 1170. Those who in the performance of their obligations are guilty

of fraud, negligence, or delay, and those who in any manner contravene the
tenor thereof, are liable for damages. 
4 GROUNDS FOR LIABILITY: (1170)

• Fraud (deceit or dolo) - the deliberate or intentional evasion of the

normal fulfillment of an obligation.
• Negligence (fault or culpa) - any voluntary act or omission, there
being no malice, which prevents the normal fulfillment of an
obligation.
• Delay (mora) - commencement of delay
• Contraventon of the terms of the obligation - the violation of the
terms and conditions stipulated in the obligation.
FRAUD AND NEGLIGENCE DISTINGUISHED
• Article 1171. Responsibility arising from fraud is
demandable in all obligations. Any waiver of an
action for future fraud is void. (1102a)
TWO KINDS OF FRAUD
ARTICLE 1171
ILLUSTRATIVE CASE:

December 14, 1979

MARIANO C. PAMINTUAN, petitioner-appellant,

vs.
CA and YU PING KUN CO., INC., respondent-
appellees.
• Article 1172. Responsibility arising from negligence in the
performance of every kind of obligation is also demandable, but
such liability may be regulated by the courts, according to the
circumstances. (1103)
 KINDS OF NEGLIGENCE
ACCORDING TO SOURCE OF OBLIGATION
Article 1173. The fault or negligence of the obligor consists in the
omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the persons, of
the time and of the place. When negligence shows bad faith, the
provisions of articles 1171 and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be

observed in the performance, that which is expected of a good father of
a family shall be required. (1104a)
DEGREES OF NEGLIGENCE:

• Culpa Lata/Magna – gross negligence

• Culpa Levis – ordinary negligence

• Culpa Levissima – slight negligence

ARTICLE 1172
KINDS OF DAMAGES:

• MORAL – include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury.
• EXEMPLARY / CORRECTIVE / PUNITIVE / VINDICTIVE – intended to serve as a
deterrent to serious wrongdoings and as a vindication of undue sufferings and wanton
invasion of the rights of an injured or a punishment for those guilty of outrageous conduct.
• NOMINAL – adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.
KINDS OF DAMAGES:

• TEMPERATE / MODERATE – more than nominal but less than compensatory

damages, which may be recovered when the court finds that some pecuniary loss has
been suffered but its amount can not, from the nature of the case, be proved with
certainty.
• ACTUAL / COMPENSATORY – are those recoverable because of pecuniary loss — in
business, trade, property, profession, job or occupation.
• LIQUIDATED – are those that the parties agree to be paid in case of a breach. No proof
of loss is necessary in order that such liquidated damages may be recovered.
• Article 1174. Except in cases expressly specified by the law, or
when it is otherwise declared by stipulation, or when the nature
of the obligation requires the assumption of risk, no person shall
be responsible for those events which could not be foreseen, or
which, though foreseen, were inevitable. (1105a)
ARTICLE 1174
KINDS OF FORTUITOUS EVENTS
REQUISITES OF A FORTUITOUS EVENT:

1. Independent of human will, or at least of debtor’s will

2. Could not be foreseen, or if foreseen is inevitable
3. Of such character as to render it impossible for the debtor to comply with
his obligation in a normal manner
4. Debtor must be free from any participation in, or aggravation of, the injury
to the creditor; that is, there is no concurrent negligence on debtor’s part
RULE AS TO LIABILITY IN CASE OF FORTUITOUS
EVENT
ILLUSTRATIVE CASE:

ENGRACIO OBEJERA and MERCEDES INTAK, plaintiffs-appellees,

vs.
IGA SY, defendant-appellant.
USURY (1175)

• Article 1175. Usurious transactions shall be governed by special laws

REQUISITES FOR RECOVERY OF INTEREST
IMPORTANT:

• RA 2655 – Usury Law (now legally inexistent)

• Central Bank Circular 905 – usury had been abolished in our
country since January 1, 1983. Interest will now depend on the
mutual agreement of the borrower and the lender.
• However, this does not give absolute right to the creditor to charge
the debtor for interest which is “iniquitous or unconscionable.”
RECEIPT OF PRINCIPAL AND RECEIPT OF LATER INSTALLMENTS (1176)

Article 1176. The receipt of the principal by the creditor without reservation

with respect to the interest, shall give rise to the presumption that said
interest has been paid.
The receipt of a later installment of a debt without reservation as to prior
installments, shall likewise raise the presumption that such installments have
been paid.
TWO KINDS OF PRESUMPTION
PRESUMPTIONS: (1176)

 The receipt of the principal by the creditor without reservation

with respect to the interest, shall give rise to the presumption
that said interest has been paid.
 The receipt of a later installment of a debt without reservation
as to prior installments, shall likewise raise the presumption that
such installments have been paid.
TAKE NOTE:

• Art.1176 does not apply to payment of taxes. There is no

presumption that previous taxes have been paid by the payment
of later ones.
• Art.1176 is not applicable where the non-payment of prior
obligations has been proven. A presumption cannot prevail over
a proven fact.
• Article 1177. The creditors, after having pursued the property
in possession of the debtor to satisfy their claims, may exercise
all the rights and bring all the actions of the latter for the same
purpose, save those which are inherent in his person; they may
also impugn the acts which the debtor may have done to
defraud them. (1111)
SUCCESSIVE RIGHTS OF THE CREDITOR: (1177)

1. Exact payment / Specific performance

2. Attach debtor’s properties
3. Accion subrogatoria
4. Accion pauliana
EXAMPLE
• Article 1178. Subject to the laws, all rights acquired in
virtue of an obligation are transmissible, if there has
been no stipulation to the contrary. (1112)
G.R.: ALL RIGHTS ARE TRANSMISSIBLE. (1178)

EXCEPTIONS:

1. If the law provides otherwise

2. If the contract provides otherwise
3. If the obligation is purely personal
CHAPTER 3

DIFFERENT KINDS OF OBLIGATIONS

SECTION 1

PURE AND CONDITIONAL OBLIGATIONS

A. PURE (1179)

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

Every obligation which contains a resolutory condition shall also be demandable, without
prejudice to the effects of the happening of the event.
MEANING OF PURE OBLIGATION
DISTINCTION BETWEEN SUSPENSIVE AND
RESOLUTORY CONDITIONS
SUSPENSIVE VS. RESOLUTORY (1181)

• Article 1181. In conditional obligations, the acquisition of rights, as well

as the extinguishment or loss of those already acquired, shall depend upon
the happening of the event which constitutes the condition. 
• Suspensive Condition- Condition Precedent or Condition antecedent

Ex: I will give you my laptop if you pass the accountancy board exam.
• Resolutory Condition- Condition Subsequent

• Ex: I bind myself to support your education until you finish college.
WHEN OBLIGATION IS DEMANDABLE AT ONCE
WHEN HIS MEANS PERMIT HIM (1180)

• Article 1180. When the debtor binds himself to pay when his means permit him to do so,
the obligation shall be deemed to be one with a period, subject to the provisions of article
1197.
ARTICLE 1180
ARTICLE 1181
ARTICLE 1182
POTESTATIVE VS. CASUAL VS. MIXED (1182)

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

-suspensive in nature
-depends upon the sole will of one of the parties
WHERE SUSPENSIVE CONDITION DEPENDS
UPON WILL OF CREDITOR
WHERE RESOLUTORY CONDITION DEPENDS
UPON WILL OF DEBTOR
Ex: A sold his land to B with a right to repurchase within 5 years from sale.

- Resolutory condition- whether A, the seller, repurchases the land from B within 5 years

-this is dependent upon the will of A as the obligee of the obligation (repurchase)
• CASUAL CONDITION- chance or will of third person

EX: S binds himself to sell the land to B if he wins a case which is pending before the
Supreme Court
I will give you my car if you recover from COVID-19 while you are the hospital on
medication.
 IMPOSSIBLE AND ILLEGAL (1183)

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

I will give you my phone if you will not jump off the cliff and kill yourself.

I will spend P 50, 000.00 if you do not carry 50 tons of metal on your head.

-These obligations are rendered pure, as if no condition at all.

• Obligation is divisible- affected ones are rendered void

Ex:
I will give you my car if you pass the Bar exams, and my P 100, 000.00 cash if you can fly
by yourself.
-to give the car is valid while to give P100, 000.00 is void
• Obligation is a pre-existing one, which does not depend upon the condition which is
impossible, only the condition is void.

Ex:
• X got a loan from Y for P 100, 000.00. payable within 3 days from date of execution. Both
parties later agreed that X will pay Y if X buys a pack of shabu.
• To buy shabu is against the law, hence, this condition is void, but the obligation to pay still
remains because this is pre-existing.
 IV. EFFECTS

• Positive Condition (1184)

Article 1184. The condition that some event happen at a determinate time shall extinguish
the obligation as soon as the time expires or if it has become indubitable that the event will
not take place.

-refers to positive suspensive condition (happening of an event at a determinate time)

EXAMPLE

X obliges to give B P 10, 000 if B will marry C before B reaches the age of 23.
Effects:
a) X must give the money if B marries C before the age of 23.
b) X is not liable if B marries at the age of 23 or at a later age. Obligation is extinguished
when B becomes 23 years old without marrying C.
c) If B dies at the age of 22 without marrying C or C having died while B is still 22 without
having married each other, obligation is extinguished. Obligation is extinguished when B
died at 22 years old or when C died, as the case may be.
NEGATIVE CONDITION (1185)

• Article 1185. The condition that some event will not happen at a determinate time shall
render the obligation effective from the moment the time indicated has elapsed, or if it
has become evident that the event cannot occur.
EXAMPLE

X binds himself to give B P 10, 000 if B is not yet married to C on December 30.
Effects:
a) X is not liable to B if B marries C on December 30 or prior thereto.
b) X is liable to B if on December 30, B is not married to C and if B marries C after
December 30.
c) If C dies on November 20 without marrying B, the obligation is rendered effective
because it is certain that B can never marry C. The obligation is effective on November
20, when C died, not December 30.
 CONSTRUCTIVE FULFILLMENT (1186)

• Article 1186. The condition shall be deemed fulfilled when the obligor voluntarily
prevents its fulfillment. 

-applies even if the obligor lacks malice or fraud, as long as there is fault
ARTCILE 1186
EXAMPLE

• X promised to give Y a car after Y passes the accountancy board exams. X later connived
with the examiner to change Y’s scores so that the latter fails though he got a passing
mark.
• The condition is thus deemed complied.
 RETROACTIVITY, AS TO FRUITS AND INTEREST
(1187)
• Article 1187. The effects of a conditional obligation to give, once the condition has been
fulfilled, shall retroact to the day of the constitution of the obligation. Nevertheless, when
the obligation imposes reciprocal prestations upon the parties, the fruits and interests
during the pendency of the condition shall be deemed to have been mutually
compensated. If the obligation is unilateral, the debtor shall appropriate the fruits and
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.
ARTCILE 1187
EXAMPLE

-March 10- S agreed to sell his land to B for P 50, 000 if B fails the accountancy board
exams to be conducted on December 20.
-April 20- S sold his land to C
-B failed the accountancy board exams on December 20
-B is entitled to the land beginning March 10, hence has better right as against C
-But before December 10, B has no right over the land
EXAMPLE

-C obliged himself to condone the debt of D, his lawyer, should the latter win C’s case in
the court.

-Upon fulfillment of the condition, C shall not be entitled to earn interest, unless the
contrary is stipulated, on the capital during the pendency of the condition, as C’s intent was
to extinguish the debt. Winning C’s case in court will have a retroactive effect on the date
when condonation was agreed, thus no interest.
EXAMPLE

-March 10- S agreed to sell his land to B for P 50, 000 if B fails the accountancy board exams to be
conducted on December 20.

-B failed the accountancy board exams on December 20

-B can now pay the price of P 50, 000 to purchase the land, and is entitled to the land since March 10

-S however does not have to give the fruits of the land land during the pendency of the condition before
December 20, or B to give the interest on the price because the fruits and interests are MUTUALLY
COMPENSATED.
 PAYMENT BEFORE THE CONDITION IS
FULFILLED (1188)

• Article 1188. The creditor may, before the fulfillment of the condition, bring the
appropriate actions for the preservation of his right.
ARTICLE 1188
ARTICLE 1189
 WHEN RESOLUTORY CONDITION IS FULFILLED
(1190)
• Article 1190. When the conditions have for their purpose the extinguishment of an
obligation to give, the parties, upon the fulfillment of said conditions, shall return to each
other what they have received. 
• In case of 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.
• Art. 1190 has the effect of return to the STATUS QUO. Effect is retroactive.

- Return to each other what they received under the obligation

 RESCISSION IN RECIPROCAL OBLIGATIONS
(1191)
• 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. 
• 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.
 BREACH OF OBLIGATIONS BY BOTH PARTIES
(1192)
• 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.
 WITH A PERIOD (1193)

• Article 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when
that day comes. 

• Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain. 

• A day certain is understood to be that which must necessarily come, although it may not be known when. 

• If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be
regulated by the rules of the preceding Section.
 I. CONCEPTS OF PERIOD AND DAY CERTAIN

• Period- Future AND certain event

• A day certain- must necessarily come, although it may not be known when

Ex: Death
 II. KINDS OF PERIOD

• 1) According to effect:

(a) Suspensive period (Ex die)-obligation arises upon arrival of the period or term

Ex: I will give you this car on December 1, 2020.

John will travel to Manila 3 days from today.
(b) Resolutory period (in diem)- obligation takes effect at once and terminates upon arrival of period or term

Ex:
I will pay for your college expenses…
….until you graduate.
….until your parents die.

Are both illustrations of in diem?

• 2) According to definiteness:

(a) Definite period- Art. 1193, par. 3-> Fixed or known when it will come
Ex: certain date i.e. February 1, 2030
(b) Indefinite period- not fixed or not known when it will come
-Article 1197, NCC

• Article 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be
inferred that a period was intended, the courts may fix the duration thereof. 
• The courts shall also fix the duration of the period when it depends upon the will of the debtor. 
• In every case, the courts shall determine such period as may under the circumstances have been
probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them. 
EXAMPLE BASED ON ACTUAL CASES:

-S sold a parcel of land to B with right of repurchase but no term is specified.

The court may fix the period to repurchase.

- To construct a house- court may fix period within which the obligor should finish the
construction of a house when it is evident that the construction should be within a certain
period ( Concepcion vs. People, 74 Phil. 63)
• 3) According to source:
(a) Legal Period- provided by law i.e. payment of income tax (April 15 for every year for
tax payers using calendar year)

(b) Judicial Period- fixed by the court

(c) Conventional Period- stipulated by the parties

PERIOD AND CONDITION DISTINGUISHED
• Article 1195. Anything paid or delivered before the arrival of the period, the obligor
being unaware of the period or believing that the obligation has become due and
demandable, may be recovered, with the fruits and interests. 
• Article 1195
-applies only to real obligations
-applies only when there is honest mistake being unaware of the period

-GR: presumption that debtor was aware of the period

• Obligor can recover what has been paid by mistake before arrival of the period

• Creditor cannot unjustly enrich himself what has been received before arrival of the
period
-> principle on solutio indebiti
 BENEFIT OF THE PERIOD (1196)

• Article 1196. Whenever in an obligation a period is designated, it is presumed to have

been established for the benefit of both the creditor and the debtor, unless from the tenor
of the same or other circumstances it should appear that the period has been established in
favor of one or of the other. 
• Article 1197. If the obligation does not fix a period, but from its nature and the circumstances it
can be inferred that a period was intended, the courts may fix the duration thereof. 

• The courts shall also fix the duration of the period when it depends upon the will of the debtor. 

• In every case, the courts shall determine such period as may under the circumstances have been
probably contemplated by the parties. Once fixed by the courts, the period cannot be changed
by them.