Section

I. Pure and Conditional Obligations

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. (1113)

Pure Obligation when the obligation contain no

term or condition whatever upon which depends
the fulfillment of the obligation contracted by the
debtor.

1.

It is immediately demandable and there is nothing to

exempt the debtor from compliance therewith.

Example Gaya obliged herself to pay her loan of P1,000 to

Tito on demand.

Instances when obligations immediately demandable:

1. It is a pure obligation;
2. It is subject to a resolutory condition;
3. It is subject to resolutory period.

2.

Conditional Obligations one which is subject to a

condition of one whose performance depends upon a
future or uncertain events or upon past event unknown to
the parties.
ART. 1180. When the debtor binds himself to pay
when his means permits him to do so, the obligation
shall be deemed to be one with the period, subject to
the provisions of article 1197.(n)
Example
A promissory note states that This is to acknowledge
receipt of sum of One thousand Six Hundred pesos (P1,
600.00) and I am to pay my debt to Arvin as soon as
possible or as soon as I have the money. It was held that
the conditional obligation is void, because the collection
would be impossible, the remedy of the creditor is to ask the
Court to fix the period of payment, thus, it becomes an
obligation with a period.

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. (1114)

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. (1115)

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. (1116a)

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. (1117)

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 not 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.
(1118)

ART. 1186.
The condition shall be deemed fulfilled
when the obligor voluntarily prevents its fulfillment. (1119)

Kinds or classifications of condition:

Suspensive and Resolutory

1.

Suspensive the happening of the condition gives rise to an obligation.

Example:
Maya binds herself to deliver a determinate car to Tito if he marries Gaya.
The obligation is only demandable upon the happening of the condition
that is, if Tito marries Gaya. The obligation is suspended and not yet
demandable.

Resolutory the happening of the condition extinguishes the obligation already

existing.

Example:
Arvin binds himself to lend his only car to Ian until the latter passes the CPA
Board. The obligation to lend is immediately demandable. Ians right over
the car is extinguished upon his passing the CPA board. Ian is now obliged
to return the car.

Kinds or classifications of
condition:
Potestative, Casual and Mixed

2.

Potestative is one the fulfillment of which depends upon the sole will of the debtor. This kind of
condition is void.

Example:
Arvin Promise to give his only parcel of land to Maya if he decides to leave for the United
States.

Casual is one the fulfillment of which depends upon chance.

Example:
Mario agrees to give Maria a determinate car if Marias only racing horse will win the
sweepstake race.

Mixed is one which depends partly upon the will of third person and partly upon chance

Example:
Vincent promise to give Victor a new Toyota Car if Victor will be able to play with and beat
Karpov in a game of chess. This is mixed condition, that is Karpov willingness to play chess
with Victor and the latters winning over Karpov.

Kinds or classifications of
condition:
Possible and Impossible
Impossible condition is divided into 2:

3.
a)

Physical Impossibility the condition imposed is not capable of being

performed physically.
Example:

Grace will give Christine a gold necklace if she swims across

Pacific
Ocean.

the

Illegal Impossibility when the condition imposed is contrary to law, good

custom or public policy.

b)

Example:

1.
2.

3.

Contrary to law Pedro agrees to give Ernesto P100,000 if Ernesto

will kill Mario.
Contrary to good custom Santos binds himself to give Maria a gold
wrist watch if she will cohabit with Mr. Reyes without benefit of
marriage.
Contrary to public policy Maria agrees to employ Grace in her
company if Grace will not join a labor union.

Kinds or classifications of
condition:
4.

Positive and Negative:

A Negative condition is one where some event will not happen at a
determinate time, either
a.)
the time indicated has elapsed; or
b.)
it has become evident that the event cannot
occur (Art.
1185, NCC)
Example:
Victor will give Jason a car if he will not marry Helen until Dec.
19, 2001, if Jason has not married Helen until Dec. 19, 2001 or if Helen
has died within the prescribed time without having married to Jason,
the obligation becomes demandable. If Jason married Helen within
the prescribed time, the obligation of Victor is extinguished.

Kinds or classifications of
condition:
5.

6.

Divisible and Indivisible

Divisible that part of obligation which is not affected by
impossible or unlawful condition shall be valid (Art. 1183,
NCC)
ExampleX promise to pay Y the sum of P1, 000.00 if Y furnishes X with
information as to the whereabouts of Z and another sum of
P2, 000.00 if Y kills Z. in the obligation, the first part (to pay P1,
000.00) is valid while the second part
(P2, 000.00) is void
because only the latter is affected by the condition.
Express and Implied

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. (1120)

Effects of conditional obligation to

give:
Once the condition is fulfilled, the effects of the
conditional obligations shall retroact to the day of
the constitution of the obligation and not on the
date when the condition was fulfilled.

Example
On Jan. 1, 1999 A agreed to give B a parcel of land if
he passes the May, 1999 CPA exams. If B passes the
CPA exams in May, 1999, he is entitled to the land
effective Jan. 1, 1999 because Bs right over the land
retroacts to the date when the obligation was
constituted.

As to the fruits and interest The effect of conditional

obligation to give, as a rule, do not retroact to the date of
the constitution of the obligation. The following rules shall
govern:
1.

In reciprocal obligation (like a contract of sale) - the fruits

and interest during the pendency of the condition shall be
deemed to have been mutually compensated.

Example:
A agrees to sell and B agrees to buy As parcel
of land if B passes the May, 1999 CPA exams. If B passes
the May, 1999 CPA Board, the obligation becomes
demandable. B is entitled to all the interests that his
money (with which to pay A) may earn while A is
entitled to the fruits which the parcel of land may
have
produced during the pendency of the
condition.

2.

In unilateral obligation the debtor shall appropriate

the fruits and interests received during the pendency
of the condition unless a contrary intention appears.

Example
X agreed to give Y a parcel of land if Y
passes the CPA Board in May, 1999 exams.
Pending the happening of the condition, A is
entitled to the fruits which the land may
produce, A will deliver only the parcel of land if the
condition is fulfilled, unless a contrary intention
appears.

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 (1121a)

Preservation of Creditors Right

The action for the preservation of the creditors right
may have for their objectives:
1.

To prevent the loss or deterioration of the things which are

the objects of the obligation by enjoining or restraining acts
of alienation or destruction by the debtor himself or by third
person;

Preservation of Creditors Right

2.

To prevent concealment of the debtors

properties which constitute the guaranty in
case of non-performance of the obligation;

3.

To demand security if the debtor becomes

insolvent;

4.

To compel the acknowledgement of the

debtors signature on a private document or
the execution of proper public document for
registration so as to affect third person.

Preservation of Creditors Right

5.

To register the deeds of sale or mortgages;

6.

To set aside fraudulent alienation made by the

debtor;

7.

To interrupt the period of prescription by

actions against adverse possessors of the
things which are objects of the obligation.
(Lawyers journal, 1951, p. 47)

 Paragraph

I of the above article authorizes the

creditor to take any appropriate actions for the
preservation of creditors right during the pendency of
the condition:

Example:
On Jan. 1, 1999, Raul obliged himself to sell a parcel of
land to Dennis if he passes the CPA exams in October,
1999. From the time the obligation was constituted and
pending the happening of the condition (passing the
CPA Exams) Dennis may cause the annotation of the
condition in the certificate of title in the Register of Deeds
where the land is located, to preserve his right over the
parcel of land.

Paragraph II in order that debtor may recover what he has paid

by mistake, during the pendency of the condition, the following
requisites may be present:
1.
2.
1.

The debtor paid the creditor before the fulfillment of the

condition;
Payment made by debtor was through mistake and error;
The action to recover what was paid by mistake should be
made before the fulfillment of the condition.
Example
Pedro obliged himself to pay Santos P20, 000 if a PAL plane
crashes at Cebu before Dec. 30, 1998. After the obligation was
constituted and before Dec. 30, 1998, a plane crushed in Cebu.
Pedro honestly and believing that the condition was fulfilled paid
the P20, 000 to Santos. It turned out however that it was a Cebu
airline that crushed. Thus, Pedro may recover the amount paid to
Santos by mistake for the reason that the condition has not yet
been fulfilled.

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)
2)

3)
4)

5)

6)

If the thing is lost without the fault of the debtor, the obligation shall
be extinguished.
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;
When the thing deteriorates without the fault of the debtor, the
impairment is to be borne by the creditor;
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;
If the thing is improved by its nature, or by time, the improvement
shall inure to the benefit of the creditor;
If it is improved at the expense of the debtor, he shall have no other
right than that granted to the usufructuary.

These rules apply only to obligation to give a determinate

or specific thing subject to a suspensive condition in case
of loss, deterioration or improvement of the thing.
1.

In case of loss of the thing

a)

If the thing is lost without the fault of the debtor, the

obligation shall be extinguished.
Example
Reyes obliged himself to give Santos a determinate car
if he passes the CPA Exams in Oct. the current year. If during
the pendency of the condition the car was lost through
fortuitous event without the fault of Reyes, the obligation to
deliver the car is extinguished even if the condition is fulfilled
later.

b)

If the thing is lost through the fault of the debtor, he shall be

obliged to pay damages. If in the example above, the
specific car was lost through the fault of Reyes, he shall be
liable for damages upon the fulfillment of the condition.

It is understood that the thing is lost:

a)

When it perishes (as when a house is burnt to ashes)

a)

When it goes out of commerce (as when the object

before is unprohibited becomes prohibited)

b)

When disappears in such a way that its existence is

unknown (as when a particular car has been missing for
some time)

c)

When it disappears in such a way that it cannot be

recovered (as when a particular diamond ring is
dropped in the middle of the Atlantic Ocean).

2.

When the thing deteriorates a)

When the thing deteriorates during the pendency of the

condition, without the fault of the debtor, the impairment is
to be borne by the creditor.
Example
Arvin obliged himself to give Ian a determinate Toyota car if
Ian passes the October CPA Exams. During the pendency
of the condition, the car was partially damaged by flood,
without the fault on the part of Arvin. If the condition is
fulfilled, Ian will bear the impairment.

b)

If the thing deteriorates, during the pendency of the

condition, through the fault of the debtor, the creditor may
choose, after the fulfillment of the condition, between the
rescission of the obligation or its fulfillment, with indemnity
for damages in either case.

3.

When the thing improved

a)

b)

If the thing improved during the pendency of the

condition, by its nature, or by time, the improvement shall
inure to the benefit of the creditor. The reason for this is to
compensate the creditor who would suffer in case, instead
of improvement, there would be deterioration without the
fault of the debtor.
If the thing is improved at the expense of the debtor, he
have no other right than that granted to the usufructuary.
By us usufruct is meant the right to enjoy the property of
another which includes the right to enjoy and use the fruits
of the property.

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 to the preceding article shall
be applied to the party who is bound to return.

As for obligations to do or 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)

Effects When Resolutory Condition

is fulfilled
1.
2.
3.

4.
5.

The obligation is extinguished. (Art. 1181, NCC)

Because the obligation is extinguished and considered to have had no
effect, the parties should restore to each other what they have received.
The fruits and interests thereon should also be returned after deducting of
course the expenses made for the production, gathering and
preservation, if any.
The rules given in Art. 1189, N CC will apply to whoever has the duty to
return in case of loss, deterioration or improvement of the thing.
The courts are given power to determine the retroactivity of the fulfillment
of a resolutory conditions.

Example :

A gave B a parcel of land on condition that B will pass the

CPA Exams on May, this year. B did not pass the CPA Exams. The
obligation is extinguished and therefore, it is as if there was never
an obligation at all. B will therefore have to return both the land
and the fruits he had received there from the moment A has given
him the land.

ART. 1191. The power to rescind obligatios 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 later 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.

Right to Rescind
The right to rescind means the right to cancel or to
resolve in case of reciprocal obligation in case of
non-fulfillment on the part of one.

Example:
In a contract of sale, the buyer can rescind if the seller
does not deliver or te seller can rescind if the buyer does
not pay.

The power to rescind is given to the injured party and

the injured party has the following alternative
remedies:
1.

2.

Demand fulfillment of the obligation plus damages; or

Demand rescission of the obligation plus damages.

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 if Both Parties Have Committed a Breach

The above rules are deemed just. The first one is fair
to both parties because the second infract or, though
they
would derive some advantage by his own
act or neglect. The second rule is likewise just,
because it is presumed
that both parties at about
the same time tried to reap some benefits. (Report of
the Code Commission)