CHAPTER 3

DIFFERENT KINDS OF OBLIGATIONS

SECTION 1 – PURE AND CONDITIONAL OBLIGATIONS

(Arts. 1179-1192)

STUDY GUIDE :

1. Kinds of obligation according to demandability :

(a) Pure obligation – no term & no condition; demandable at once
(Art. 1179, par. 1)
(b) Conditional obligation – subject to the fulfillment of a condition
2. Condition – (a) future and uncertain; OR (b) past but unknown
3. Kinds of condition as to effect : (Art. 1181)
(a) Suspensive – the fulfillment gives rise to an obligation
(b) Resolutory – the fulfullment extinguishes an obligation
4.Kinds of condition as to cause or origin : (Art. 1182)
(a) Potestative – depends upon the will of one of the parties
NOTE : If the potestative condition (a) depends upon the sole will of
the debtor AND (b) is suspensive in nature, the conditional
obligation shall be VOID. (Art. 1182, 1st sentence)
(b) Casual – depends upon chance OR upon the will of a third
person
(c) Mixed – depends partly upon chance and partly upon the will of
a third person
5. Kinds of condition as to form :
(a) Possible – capable of fulfillment
(b) Impossible - not capable of fulfillment (Art. 1183)
(b.1.) Physically – cannot exist or cannot be done
[par. 1]
(b.2.) Legally – contrary to “LaMoG-PuPu”

[par. 2] (b.1.) Positive – TO DO an impossible thing  conditional

obligation VOID
(b.2.) Negative – NOT TO DO an impossible thing  conditional
obligation VALID
6. 2 kinds of suspensive conditions as to mode :
(a) Positive – that an event WILL happen at a determinate time
(b) Negative – that an event WILL NOT happen at a determinate
time

The designated time The designated time has

EFFECT
expires or elapses not expired but it becomes
ON
WITHOUT the event taking definite that the event will
OBLIGATI
place. not take place.
ON
POSITIVE Extinguished (Art. 1184) Extinguished (Art. 1184)
NEGATIVE Effective (Art. 1185) Effective (Art. 1185)
7. Art. 1186 – When the debtor voluntarily performs any act to prevent
the happening of a suspensive condition, the same results in the
constructive fulfillment of the suspensive condition.
8. Art. 1187 – Retroactive effect of fulfillment of suspensive condition
(a) In real obligations (par. 1)
(a.1.) re the thing – once the condition is fulfilled, its effects
retroact to the day when the obligation was constituted.
(a.2.) re fruits and interests :
(a.2.1.) reciprocal obligations – no retroactive effect; fruits
and interests received are deemed mutually
compensated
(a.2.2.) unilateral obligations – no retroactivity as they are
gratuitous
(b) In personal obligations (par. 2) – subject to court’s determination
9. Art. 1188 – Rights pending fulfillment of suspensive condition
(a) Creditor – to bring appropriate actions to preserve his rights
(par. 1)
Reason : to prevent the debtor from deliberately
destroying, hiding or alienating the object of the obligation
pending fulfillment of the condition.
REMEMBER : By the same token, this right may be
exercised by the debtor in obligations subject to a resolutory
condition.
EXAMPLES :
(a.1.) sue in court
(a.2.) initiate the recording of his expected right
(a.3.) ask for security if the debtor is about to be insolvent
(a.4.) ask the court to prevent alienation or concealment pendente conditionae
(b) Debtor – recovery of what has been paid by mistake (par. 2)
Payment by mistake
Deliber
Debtor’s right to recover what has When creditor is in :
ate
been paid good bad faith payme
faith nt
BEFORE fulfillment of suspensive YES YES + F/I NO
condition
UPON fulfillment of suspensive NO NO + F/I NO
condition
NON-fulfillment of suspensive YES YES + F/I YES
condition

10. Art. 1189 – Loss, deterioration and improvement of the object of an

obligation pending fulfillment of a suspensive condition in a
specific real obligation.

(a) Loss – physical, legal & civil loss (Art. 1189, No. 2)
 (b) Deteriorate – value is reduced or impaired
Effect of : DEBTOR’S INTENT
(Art. 1189) Without Fault With Fault
LOSS Extinguished (No. 1) Damages incurred
(No. 2)
Creditor’s remedies :
Creditor bears
DETERIORATI (No. 4)
impairment (No. 3)
ON (a) rescission +
damages OR
(b) fulfillment +
damages
(a) By nature or by time – Creditor benefits from
improvement (No. 5)
IMPROVEMEN (b) At debtor’s expense – Debtor will have the
T rights of a usufructuary (No. 6); no right to
indemnity but he may remove improvements
without damage to the property and/or set-off
improvements against damage to the property.
(Arts. 579 & 580, NCC)
11. Art. 1190 – Effects of fulfillment of resolutory condition
(a) In real obligations (par. 1)
(a.1.) the obligation is extinguished
(a.2.) there should be restitution, not only of the thing
received, but also of the fruits or interests thereon
(b) In personal obligations (par. 3) – subject to court’s determination
(c) In case of loss, deterioration or improvement of the thing after
fulfillment of the resolutory condition but before restitution is effected
(par. 2) – the party who is bound to return in a resolutory
conditional obligation shall have the same rights and duties as
that of the debtor under Art. 1189.
12. Art. 1191 – The right to rescind in reciprocal obligations
in case of breach or non-fulfillment
(a) Kinds of obligations according to the person obliged :
(a.1.) Unilateral – when only one party is obliged to comply with
a prestation
(a.2.) Bilateral – when both parties are debtors and creditors of
each other
(a.2.1.) Reciprocal – the parties’ obligations arise from the
same cause; the obligation or promise of each
party is the cause or consideration for the
obligation or promise of the other.
(a.2.2.) Non-reciprocal – the performance of one party is
not dependent upon the simultaneous
performance by the other.
(b) Remedies of the aggrieved party in a reciprocal obligation in case the
other party does not comply with his undertaking : (par. 2)
(b.1.) specific performance + damages; OR
 (b.2.) rescission/cancellation of contract + damages
REMEMBER : The remedies provided in Art. 1191, par. 2 are
alternative, and not cumulative.
HOWEVER : An action for rescission may still be availed of even
after an action for specific performance has been
preferred IF fulfillment should have become impossible.
BUT : Once an action for rescission is chosen, specific
performance can no longer be demanded.
(c) Limitations on the right to rescind :
(c.1.) Only substantial (not trivial or slight) breaches can cause
rescission.
(c.2.) If there is just cause for fixing the period within which
the debtor can comply, the court will not decree the
rescission claimed. (par. 3)
(c.3.) If the property, subject of the contract, is not in the
hands of an innocent third party who has lawful
possession of the same. (par. 4)
13. Art. 1192 – Rule if both parties have committed a breach
(a) If the first infractor is known – the liability of the first infractor shall
be proportionately reduced. (1st sentence)
(b) If the first infractor is not known – the contract shall not be
enforced. Each party shall bear his own loss/damages. (2nd
sentence)

APPLICATION/PROBLEMS :

1. On May 5, 2008, Jim entered into an agreement with Jet. Under

the agreement, Jim obliged himself to deliver to Jet an antigue ruby
ring worth P50,000 anytime that Jet wants it and demands delivery.
On June 5, 2008, Jet makes up his mind and insists on the delivery of
the ruby ring from Jim. Jim, however, denies liability and claims that
the condition, that is – “anytime Jet wants it,” was potestative in
nature. Hence, the same condition upon which Jim’s obligation was
made to depend upon, as well as the obligation itself, is void. Does
Jim’s argument have legal basis? Is he under obligation to deliver to
Jet the rubi ring as promised?  Clue: Art. 1182.
2. On March 15, 2008, Donna and Celia entered into an
agreement. In their agreement, Donna obliged herself to purchase
from Celia a house and lot located in Makati for P3.5M. Donna’s
husband had been detailed by their office from Baguio City to Makati
effective May 1, 2008. Hence, the family was relocating permanently
to Makati. For this reason, it was agreed by the parties that by April
15, 2008, Celia should have vacated and readied the house for
occupancy to allow Donna and her family to move in. On April 13,
2008, when Donna contacted Celia, she was informed that Celia had
not even taken initial steps to vacate the subject property. Hence,
Donna was left with no other recourse but to accept the proposal of an
agent for the acquisition of a two-bedroom condominium unit at the
Avida Towers in Makati which was available for occupancy as of April
15, 2008. Celia, however, demanded that Donna make good her
commitment to purchase Celia’s Makati house and lot as per their
March 15, 2008 agreement. Is Donna bound to comply with her
obligation?  Clue: Art. 1184.
3. Angelo hired Engr. Luis to construct a 50-kilometer road within
his private subdivision. It was agreed that Engr. Luis was to finish the
construction in 3 months. The contract price agreed upon was P2M.
After six weeks, however, and without justification, Angelo ordered the
construction stopped with the work barely half-finished. Engr. Luis was
left with no choice but to follow the owner’s instruction for work
stoppage. Engr. Luis, however, charged Angelo for the complete
contract price of P2M. Angelo refused to pay the entire amount on the
ground that the project was only then half-finished. Decide on the
parties’ claims.  Clue: Art. 1186.
4. On February 11, 2006, Francis and Josh entered into a
transaction with regard to a 1-hectare farm lot in Laguna owned by
Francis. The parties agreed that should Josh pass the Nursing Board
Examination on September 30, 2008, Francis will sell the said farm lot
to Josh for P1.5M. On March 15, 2007, Josh sold the farm lot to Reuben
for P2M. On October 23, 2007, Francis sold the farm lot to Peter. On
September 30, 2008, Josh passed the Nursing Board Examination.
Who is now the rightful owner of the 1-hectare farm lot in Laguna? 
Clue: Correlate Arts. 1187 & 1188.

5. On April 4, 2007, I gave you Shaun, my favourite sheep, on the

condition that you will never go to the casino. On September 20, 2007,
Shaun gave birth to 5 healthy lambs. On January 2, 2008, however, I
saw you going to the casino again. So, on January 3, 2008, I
demanded for the return of Shaun and her 5 lambs. You gave me
Shaun but you refused to give me her babies and in fact sold the 5
lambs last Christmas. Do you think your refusal is justified under the
factual circumstances?  Clue: Correlate Arts. 1189 & 1190.

6. On December 20, 2005, Rudy and Dan entered into a lease

contract. It was agreed that Dan would lease an office space from
Rudy for 5 years starting January 1, 2006 to December 31, 2010. In
consideration therefor, Rudy was to collect a monthly rental of P10,000
from Dan. Starting January 1, 2008, however, or after 2 years of the
contract, Dan discontinued remittance of his monthly rental payments
despite repeated demands from Rudy. Hence, on March 1, 2008, Rudy
asked Dan to vacate the premises if he could not afford to pay. On
March 15, 2008, Dan turned over the office space to Rudy. Now, Rudy
demands from Dan payment of rents for the remaining three years of
the contract, i.e., from January 1, 2008 to December 31, 2010. Is Rudy
well within his rights to claim said rental payments for the unexpired
term of their lease contract?  Clue: Art. 1191, par. 2