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If the prevention is based on a legal ground the happening of the condition the debtor

then there can be an application of 1186. cannot encumber, dispose, or sell the object of
the prestation because of Article 1188. The
Josefina Tayag vs Court of Appeals and creditor may go to court and bring the
Albrigido Levya appropriate actions for the preservation of his
The creditor said the one who voluntarily right. Thus there is this prohibition on the part
prevents the fulfillment of the obligation should of the debtor prior to happening of the
be the debtor not the creditor. suspensive condition whereby the object of the
prestation is determinate.
How was that resolved by the court?
He cannot encumber or do any act that would
It is a reciprocal obligation whereby both are tend to prejudice the rights of the inchoate
mutual creditors and debtors to each other. creditor, inchoate in the sense that prior to the
happening of the suspensive condition he does
Art. 1187
not have a real right over it yet, but nonetheless
What happens if the obligation subject is a because what is involved is a determinate
suspensive condition is fulfilled? object then he is forbidden from disposing of it
or encumbering it or performing any act that
Article 1187 provides that it shall retroact to the would tend to prejudice the creditor because of
date of the constitution of the obligation, the 1188 bring the appropriate action to protect his
reason being that the suspensive condition is interest.
merely an accessory element. For as long the
three elements of an obligation are present Art. 1189
then the obligation is valid because and
Then what are the rules to be observed prior to
obligation can exist even without a condition so
the happening of the suspensive condition in
it is given retroactive application.
the event of loss, deterioration, or
Right to the happening of the suspensive improvement? That’s 1189 which is also true in
condition and it is one that is reciprocal. What obligations subject ro resolutory condition.
happens to the fruits as well as the interest?
There is mutual compensation meaning the
When it deteriorates without the fault of the
seller retains the fruits and the buyer retains
debtor then it shall be borne by the creditor.
the interest.
If it deteriorates or is impaired by reason of the
In unilateral obligation it shall accrue to the
negligence of the debtor, the creditor has 2
benefit of the debtor.
Example: Contract of usufructs.
To Rescind plus damages or to demand
Art. 1188 fulfillment plus damages

So if the object of the obligation is determinate

and is subject was suspensive condition, prior to
Loss Now the rules to observe in the loss,
deterioration or improvement shall be the same
If it is without fault of the debtor, the obligation as that of 1189.
is extinguished.
Art. 1191
Take note: Definition of loss? When is there
loss? The power to rescind is implied in reciprocal
ones in case one of the obligors should not
If the loss by reason of the fault of the obligor,
compy with what is encumbent upon him.
what is the liability of the debtor?
So this is known as the tacit resolutory
The value damages plus the interest condition and the injured party may choose
If there is improvement by nature or by time fulfillment plus damages or recission plus
then it shall accrue to the benefit of the damages. Alternative the remedy is alternative,
creditor. he can have both however if fulfillment is no
longer possible.
While if it is improved at the expense of the
debtor, the debtor has no other right than that Because the basis of the grant of resolution is
granted by usufructuary which means that he substantial breach on the part of the injured
can remove the improvements that have been party then if there is substantial breach then
introduced in the property subject to the the court the decision to claim otherwise the
condition that no damage shall result to the breach is slight then the court shall fix the
principal upon which the improvement is period within which the debtor shall comply
attached. with the obligation and once it is fixed it would
no longer be changed by the court.
If it is improved by the expense of the debtor
but has also deteriorated by the fault of the Exceptions to 1191:
debtor then there is mutual compensation. Where 1191 finds the obligation if it is expressly
Art. 1190 stipulated by the parties that regardless of the
degree of breach, the rescission shall follow as a
The happening of the resolutory condition , the matter of right then there is no need for going
obligation is extinguished, there is that to court because even if there performance
requirement of mutual restitution between the regardless of how slight it is, the court will
parties and in the event the creditor who is now determine if rescission is proper or not under
the debtor to return the object of prestation the circumstances. So it is the court that
could no longer return it; If there is good faith determines whether the recission is proper or
then it must let the patrimony of the debtor he not.
will only be liable for the value as well as the
price and the interest but if the third person or Likewise this will not apply to contracts of lease
the transferee falls in bad faith then there can this is to be governed by other provisions of the
be cancellation or rescission of the transfer civil code.
because of the bad faith of the transferee.
In sale of installments involving the personal Third is that the former can only be brought by
property, that’s direct to law, is governed by the injured party whereas in 1381 in can be
sales under the law on sales. Likewise you have brought by any third person
also the Maceda law (RA 6552); this refers to
Note: If you are asked to enumerate, answer in
the sale of real estate in installments where the
law requires that there must be notarial complete form.
rescission for the injured party to claim SPOUSES CANNU vs. SPOUSES GALANG
rescission under the Maceda law.
Why did the court grant rescission despite the
So where can there be an extrajudicial fact that according the buyer there were
rescission? There would be no need of court receipts and subsequent acceptance of the
intervention. payment despite the fact that payments were
If there is no performance whatsoever by the long delayed?
(…) Because at the time the partial payments were
Take note that 1191 can only be invoked by the made, the seller was in another country so he
injured party, this cannot be invoked by the appointed an agent and yet despite that the
infractor. court granted the decision to claim.

And that is why in the case of Swire Realty Development Corporation vs

REHOUSE CORP. Is the decision proper? This was a contract to
sell. Why did the court allow?
Where the Supreme Court said that they are
There was already full payment of the purchase
not the injured party thus there is no basis for
their claim of rescission. price of the condo unit so the obligation already
arises to transfer ownership and turn over the
Now what happens if the court grants the property.
Then there is mutual restitution. The parties are
required to mutually restore each other what Where did the court apply 1192?
they received from the other. The basis of their agreement is verbal so it
How to distinguish rescission from 1191 and cannot be determined as to who breached the
1381? obligation first.

One is that 1191 is principal the other is CUPINO vs PACIFIC REHOUSE

subsidiary. The real injured party is not Cupino but Pacific
The former is based on the breach of faith in Rehouse. There was non-performance by the
performance of the obligation, the other is seller and in fact they have been paying the
based on economic treaties. purchase price through the form of advances by
the sellers.

Actually the real party was not ASB it was


Another issue there is the fact that there was

annotation (…) sufficient knowledge of ASB to
comply with those requirements because it was
annotated at the back of the title


Ex Die = from a day certain

In Diem = to a day certain

And if a period is stipulated in the obligation

whose benefit is it?

It is for the benefit of the creditor and the

debtor but unless the period is for the benefit
of one of the parties of the obligation it can be
the benefit of either the creditor or the debtor.