The Law on

Obligations
and
Contracts
2011

Midterm
Examination

Submitted by:
Domingo,
Dennimar O.
TTh
17:00 - 18:30

Submitted to: Pio

Sara Jagurin
II. Discussions
1. Illustrate an obligation subject to:

(a) Suspensive Condition

When an obligation is subject to a suspensive condition,

the creation of the obligation will depend on the occurrence of an
event or on the certainty that the event will not occur; thus, the
condition delays the creation of a relationship between the parties.
As long as the condition has not occurred, the very existence of the
obligation is not yet arises. For example, If your rent is due on the
30th, you have an obligation to pay the rent. The performance to
pay occurs on the 30th. The performance is suspended until the
30th.

(b) Resolutory Condition

Resolutory condition refers to a condition whereby, upon

fulfillment terminates an already enforceable obligation. The
continuance of such a contract is made dependent upon the
happening of an uncertain future event. However, there is no
postponement or suspension of the contract and all rights and
obligations come into existence immediately upon conclusion of an
agreement between the parties. For instance, You have a car note
over the next 10 years. Once you pay the last payment at the end
of 10 years, the obligation ends.

What is the effect of the fulfillment of the condition in a

conditional obligation?

The suspensive condition is when the parties agree that

the duty to perform is postponed until a determined or determinable
date due to the pending event, and that this event is certain to
happen. However, the exact date is unknown. The obligation will
arises when the said condition is already fulfilled. While in the
resolutory condition, when the parties agree that the obligations in
the contract will be terminated upon a certain future time. This exact
time is certain to happen, but the exact date is unkown.
2. Give two (2) cases when the conditional obligation is valid
although the condition depends entirely upon the will of the
debtor. Explain.

First case is when the debtor promises to pay when his

means permit him to do so. In this case, what depends upon the will
of the debtor is the duration of the period when he is capable on
paying his debt and not whether he should comply or not. For
example, Mr. G binds himself to pay Ms. Y of his debt that costs
10,000 little by little. This obligation is valid and it shall be deemed
to be one with a period of time.

Next case is when the debtor is capable of doing the said

obligation. For example, Marie borrowed 5,000 to Rose payable on
September 13. Due to the review of financial reverses, Marie now is
not capable on paying the debt to Rose but Marie is willing to pay
the said debt. The remedies of Rose will arise

3. May an obligor be liable under an obligation subject to a

suspensive condition although the condition has not yet been
fulfilled? Explain.

Under the suspensive condition, the obligation will arises

when the said condition is already fulfilled. Therefore, under this
type of condition, the obligor or the debtor is not yet liable. The
debtor would be liable if the condition is already fulfilled.

4. In obligation to give a parcel of land subject to a suspensive

condition, who is entitled to the fruits that accrued during the
pendency of the condition once said condition is fulfilled?

Upon the fulfillment of the obligation, the seller has the

right to keep to himself all the fruits and interests he may have
received during the pendency of the condition, unless a contrary
intention by the seller that he shall render an accounting of fruits
received during its pendency.
5. State the rules in case the thing to be delivered:

(a) is lost with the debtors fault; without his fault;

If the delivery lost is due to the debtors fault, the debtor

has an obligation to pay the damages that incurred and the price of
the thing that is lost also can be demand.

If the delivery lost without the fault of the debtor, the

debtor is not liable for any obligation or the obligation shall be
extinguished. We are not liable for the fortuitous event or any event
that beyond our powers.

(b) Deteriorates with the debtors fault; without his fault

If it deteriorates through the fault of the debtor, the

creditor may choose between the 2 remedies as a creditor, which is
the rescission or the fulfillment of the obligation, with damages that
incurred in either case. As a creditor, you only have to choose one of
the remedies that are given.

If it deteriorates without the fault of the debtor, the

value of thing that delivered will be depreciated and the value will be
reduced due to the deterioration of the thing.
III. Problems

Explain or state briefly the rule or reason for your answer.

1. D (debtor) borrowed 20,000 from C (creditor) payable on

or before August 30. Before the arrival of the due date, C
agreed to the promise of B to pay C if B wants. Can C insist
that B pay not later than August 30?

On this situation, the conditional obligation whose

fulfillment depends partly on the will of the debtor and partly upon
the will of the third person is perfectly valid. In this case, it shows
that the creditor demands the third person to pay him not later than
August 30 but on the said case, they agreed on the promise of the
third person to pay the creditor if the third person wants. Therefore,
the creditor cannot demand to the debtor if the due date is not yet
passed.

2. Suppose in the same problem, D obliges himself to pay C

10,000 after C has paid his obligation to T. Is the obligation
valid?

The said condition is considered as the suspensive

condition wherein the obligation will only arises if the condition is
already fulfilled. The debtor obliges himself to pay the creditor if the
creditor already paid the third party. If the creditor has not yet
fulfilled his obligation to the third party, he cannot demand the
debtor to pay him immediately. Therefore, the obligation of the
debtor is invalid. The debtor is not liable to pay the creditor if the
creditor is not yet paid to the third party.

3. S (Seller) agreed to sell to B (buyer) a specific car for

200,000, delivery of the car and the payment of the price to
be made on June 15. Suppose S delivered the car on June 15
but B failed to pay the price, what are the remedies of S?

If the buyer does not comply with his obligation to pay,

the seller may choose between the two remedies: (a) action for
specific performance (fulfillment) of the obligation with the
damages; or (b) action for the rescission of the obligation also with
damages. The seller has the privilege to choose only one of the
remedies, and not both. If the creditor chosen rescission, he cannot
demand the fulfillment of obligation to the buyer. Same as, if he
chosen the buyer to fulfill the obligation, he cannot practice the
rescission later on.

4. S sold a parcel of the land to B for 240,000 payable in

installment of 20,000 a year. The land was delivered to B
who obtained ownership thereof. After B had paid 200,000,
he could no longer continuing paying in view of financial
reverses but he was willing to pay the balance of 40,000 if
given more time. Thereupon, S sued for rescission under
Article 1191. If you were the judge, would you grant
rescission?

If I were the judge, I would grant the rescission of Seller

in default a term or period for the performance of the Buyer. The
buyer is willing to comply with his obligation to pay the maintaining
balance that cost 40,000 but needs time to do so due to the view of
his financial reverses, not because he doesnt want to pay the
maintaining balance that hed left.

5. D (debtor) binds himself to pay C (creditor) a sum of

money. Give the three (3) cases when the obligation of D is
demandable at once by C?

When the obligation is pure

An obligation is demandable at once if it is pure
obligation which one is not suspended by any condition,
whether it has been contracted without any condition, or when
thus contracted, the condition has been performed. It is
immediately demandable. Their agreement doesnt have
specific date, and conditions so the creditor can demand to
pay the said amount to the debtor.

When the obligation is subject to a resolutory condition

On the above description of resolutory obligation, once
the condition is already fulfilled, the obligation will be
extinguish. The creditor can demand to the debtor during the
fulfilling of the condition.

When the obligation is subject to a resolutory period

Same as the case above, the creditor can demand to the
buyer while in the process of fulfilling the condition. If the
creditor and the debtor agree on the period wherein the
obligation is extinguished, he can demand to the buyer to pay
the amount he borrowed.