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Chapter III. Different Kinds of Civil Obligations Pure and Conditional obligations A.PURE OBLIGATIONS Art 1179 Par 1 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. ●Contains no term or condition whatever upon which depends the fulfillment of the obligation contracted by the debtor. Immediately demandable and nothing would exempt that debtor from compliance therewith. B.CONDITIONAL OBLIGATIONS
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  Chapter III. Different Kinds of Civil ObligationsPure and Conditional obligations  A. PURE OBLIGATIONS  Art 1179 Par 1 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 . ●Contains no term or condition whatever upon which depends the fulfillment of the obligation contracted by the debtor.Immediately demandable and nothing would exempt that debtor from compliance therewith.B. CONDITIONAL OBLIGATIONS  Art 1181 In conditional obligations, the acquisition of rights, as well as extinguishment or loss of those already acquired, shall  depend upon the happening   of the event which constitutes the condition. CONDITION    ■every future and uncertain event upon which an obligation or provision is made to depend ■even though uncertain, it should be possible ■must be imposed by the will of a party and NOT a necessary legal requisite of the act e.g. promise to givedonation  propter nuptias if a person gets married is not conditional (DPN presupposes marriage) ■“past   event” cannot be a condition because it is not a future and uncertain event, more properly called as “basis”;  although proof of a past event may be a condition ■ TERM     –  not uncertain but must necessarily happen e.g. death of a person CONDITION   PERIOD/TERM  Determines existence of an obligation Determines demandability of an obligation Kinds of Conditions  1.As to effect on obligation  Art 1181 “Acquisition of  rights” and “extinguishment  or loss of those already acquired”   SUSPENSIVE   RESOLUTORY  When condition fulfilled Obligation arises Obligation is extinguishedWhen condition not fulfilled The juridical or legal tie does not appear Tie of law is consolidated, becomes absoluteUntil it takes place Obligation is a mere hope The effect flow, but over it hovers possibility of termination like Sword of DamoclesEffect Acquisition of rights Extinguishment or loss of those alreadyacquiredAlso known as ondition precedent/antecedent Condition subsequent SUSPENSIVE (condition precedent/antecedent) ●the obligation arises, but if the condition does not happen, obligation does not come into existence Retroactive effect when “suspensive” condition is fulfilled - The binding tie of conditional obligation is produced from the time of perfection, not happening of condition. ●Can also be seen as “Rights of creditor and debtor after fulfillment of the condition”  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 andinterests 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 shouldbe inferred that the intention of the person constituting the same was different.In obligations to do or not to do , the  courts shall determine , in each case, the retroactive effect of condition thathas been complied with. OBLIGATION TO GIVE   OBLIGATION TO DO or NOT TO DO    Bilateral (reciprocal obligation) ●deemed to have been mutually compensated Unilateral  Courts shall determine the retroactive effect of the condition  ●debtor  shall appropriate fruits and interestsreceived, UNLESS there was a different intention ●Until the fulfillment of suspensive condition, creditor cannot enforce the obligation as his right then was merely an     expectancy . However, upon happening, the debtor can be compelled to perform. ●REASON FOR RETROACTIVITY: Condition is only accidental and not an essential element of the obligation. The obligationis constituted when the essential elements which give rise there to concur. ●Contracts entered into PENDENTE CONDITIONE  (before happening of suspensive condition) ○CREDITOR  transfers his rights prior to happening of condition e.g. mortgage over the property to be delivered to him  Effect: consolidate or makes effective the act performed. ○DEBTOR: cannot alienate or dispose the thing, if he does so, all such contracts are abrogated and cease to haveany effect upon happening of the suspensive condition. But because delivery transfers real right over the thing: ●3 rd person in good faith  retains ownership; debtor becomes liable to creditor for damages. ●3 rd person is in bad faith  he may be compelled to deliver the thing to the creditor. ●LIMITATIONS ON RETROACTIVITY (as dictated by justice and required by practicability or convenience): ○ loss of the thing by fortuitous event, debtor suffers the loss because he is still the owner ○ acts of administration before fulfillment not affected by retroactivity; however abuse of rights in guise of administrationare not allowed to defeat rights of creditor ○ usufructuary rights not within the principle of retroactivity of conditional obligations Rights of creditor and debtor before fulfillment of condition  Art 1188 The creditor, may before the fulfillment of the obligation , bring the appropriate action 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. ● No preference of credit is granted to the creditor but only allows him to bring proper action for the preservation of his rights.   ●PAYMENT BEFORE HAPPENING OF CONDITION: Debtor may only recover what he paid by mistake before happening of    suspensive condition, hence if condition has been fulfilled, he can no longer claim because of retroactivity of the condition. ●If  the payment was for a determinate thing: accion reivindicatoria (for inexistent contracts) ●Otherwise (not a determinate thing): solutio indebiti   ●If  the payment was with knowledge of condition: implied waiver of condition and cannot recover ●If  the payment was with knowledge but the condition did not happen: debtor can recover lest the creditor will beunjustly enriched. ●The law is silent as to whether fruits may be recovered like in Art 1195, but Tolentino says we can apply principle of solutio indebiti, especially if creditor is in bad faith (knew that the debtor is paying before the suspensive condition hashappened). Sir Labitag says yes, though.    It follows the same rules.    RESOLUTORY  (condition subsequent) ●extinguishes rights and obligations already existing2.As to cause or srcin     Art 1182 When the fulfillment of the condition depends upon the sole will of the debtor  the conditional obligation shall beVOID. If it depends upon chance or upon the will of a 3 rd  person , the obligation shall TAKE EFFECT in conformity with theprovisions of this Code.  POTESTATIVE  –    One which depends upon the will of one of the contracting parties; in the power of one of the parties to realize or   prevent KINDS OF POTESTATIVE CONDITION   1. Simple potestative    –  presupposes not only a manifestation of will but also the realization of an external act ●On the part of the debtor: Does not prevent formation of valid obligation because in part depends on contingenciesover which he has no control2. Purely potestative    –  depends solely and exclusively upon the will ●Destroys the efficacy of the legal tie ● Effect if fulfillment of condition depends solely on the will of the debtor    VOID because it is a directcontravention of Art 1308 on mutuality of contracts and to do so is to sanction illusory conditions ●If  depends exclusively on the will of creditor  VALID ●Applicable only to SUSPENSIVE and NOT to RESOLUTORY ●Hence, resolutory potestative (facultative) conditions are perfectly valid, even if made to depend upon theobligor/debtor, since the obligation is already in force Debtor’s promise to pay when he can is not a conditional obligation  Art 1180 When the debtor binds himself to pay WHEN his means permit him to do so, the obligation shall be deemed to be one witha period subject to the conditions of Art 1197 (period was intended).  ●Creditor  will have to ask the court to fix a period because an immediate action to enforce the obligation would bepremature. CASUAL    –    depends   exclusively upon chance, will of a third person or other factors, and not upon the will of the contracting parties  MIXED    –  depends upon the will of one of the contracting parties and other circumstances, including the will of third persons3.As to possibility     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 .  IMPOSSIBLE    –  may either be physical (contrary to the law of nature) or  juridical (contrary to law, morals, good customs, and   public policy AND restricts certain rights which are necessary for the free development of human activity i.e. political rights, familyrights and constitutional rights and liberties e.g. condition not to change domicile, religion or contract marriage)  ILLICIT CHARACTER    –  determined not by the facts but by the effect upon one of the parties. Thus, the criterion is subjective. Notthe act but the intention and its effect that determine the illicit character of the condition. ●Why? Impossibility of fulfillment implies he does not intend to be bound  , thus the nullity of the promise Effect of Impossible Conditions   ●Annuls only obligations which are POSITIVE and SUSPENSIVE. In the case of a negative impossible condition , it’s considered as not written and the obligation is converted to a pure and simple one. ●Applies only to contracts and not to simple and testamentary donations and to testamentary dispositions ●Impossibility of condition must exist at the time of the creation of the obligation (not existence of a validObligation subsequently rendered impossible under Art 1266 on “subsequent   impossibility”)   ●DIVISIBLE OBLIGATION: part not affected by the impossible condition shall remain validGENERAL RULE: Impossible condition annuls the obligation dependent upon themEXCEPTIONS: ○Pre -existing obligation ○Divisible obligation ○Simple or remuneratory obligation ○Testamentary disposition ○Negative impossible things4.As to mode    POSITIVE (suspensive)  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 . ●If  there is no period fixed, the rule in Par 2 of Art 1185 is applicable. Intention of the parties is controlling, and the time shallbe that which the parties may have probably contemplated, taking into account the nature of the obligation.  NEGATIVE (suspensive)  Art 1185 The conditions that some event will not happen at a determinate time shall render the obligation EFFECTIVE from themoment the time indicated has elapsed  OR if it has become   evident that the event cannot occur  .If  no time has been fixed  , the condition shall be deemed fulfilled at such time as may have probably been contemplated, bearing inmind the nature of obligation. LOSS, DETERIORATION or IMPROVEMENT  pending happening of the condition  Art 1189 When the conditions have been imposed with the intention of  SUSPENDING the efficacy of an obligation to give , thefollowing rules shall be observed in case of the improvement, loss or deterioration of the thing during the pendency of the condition:1.Loss without fault of debtor: obligation extinguished2.Loss through the fault of debtor: obliged to pay damages. A thing is loss when it:a.Perishesb.Goes out the commerce of manc.Disappears in such a way that its existence is unknown or it cannot be recovered3.Deteriorates without fault of the debtor: impairment to be borne by the creditor4.Deteriorates through the fault of debtor: creditor may choose between the rescission of the obligation and its fulfillment withindemnity for damages in either case5.Improved by its nature, time: inure to the creditor6.Improved at the expense of the debtor: no other right than that granted to the usufructuary ●Applicable only to obligations to deliver a determinate or specific thing. NO application to generic objects (genus neverperishes).  ●Apply only in case suspensive condition is fulfilled  .Art 1190 When the conditions have for their purpose the EXTINGUISHMENT of an obligation to give , the parties, upon thefulfillment of the 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, arelaid down in 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 2 nd par of Art 1187 ( courts shall determine ) shall be   observed as regards the effect of the extinguishment of obligation. LOSS  1.Perishes2.Goes out of the commerce of man3.Disappears in such a way that its existence is unknown or it cannot be recovered DETERIORATION   Any reduction or impairment in the substance or value of a thing which does not amount to a loss. Thething still exists at the time the condition is fulfilled, but it is no longer intact, OR is less than what it waswhen the obligation was constituted.   IMPROVEMENT   Anything added to, incorporated in, or attached to the thing that is due. Effect of loss or deterioration   LOSS   DETERIORATION   Without debtor’s fault Extinguished, unless there is a stipulation to thecontrary. Mode of extinguishment Art 1262 Par 1Not liable for damage, creditor must accept thething in impaired conditionWith debtor’s fault Liable to damages upon fulfillment of condition May demand the thing OR ask for rescission, ineither case, creditor may recover damages   Effect of improvement   MODE   By nature or time Inures to the benefit of the creditor by virtue of principle of retroactivity of conditional obligations At debtor’s expense Only usufructuary rights; Governed by Art 579 (useful improvements or for mere pleasure, remove if possible to remove without damage to property) and Art 580 (set off the improvements he may havemade against any damage)   Effect of prevention of the fulfillment of the condition by the obligor  Art 1186 The condition shall be  deemed fulfilled  when the obligor voluntarily prevents fulfillment. CONSTRUCTIVE FULFILLMENT     –  a condition which although not exclusively within the will of the debtor, may in some way beprevented by the debtor from happening.REQUISITES:a.Intent of the obligor to prevent the fulfillment of the condition  ESSENTIAL!b.Actual prevention of the compliance ●Why? Party to a contract may not be excused from performing his promise by the non-occurrence of the event which hehimself prevented. ●Also applicable to  provocation of resolutory conditions  C. RECIPROCAL OBLIGATIONS  Art 1191 The power to rescind obligation 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  FULFILLMENT  and the  RESCISSION  of the obligation, with the payment of damages ineither case. He may also seek rescission, even after he has chosen fulfillment, if the latter should becomeIMPOSSIBLE.The court shall decree the rescission claimed UNLESS there be a  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 Articles1385 and 1388 and the Mortgage Law.Art 1192 In case both parties have committed breach of obligation, the liability of the first infractor shall beequitablytempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be extinguished  and each shall bear his own damages . Concept  RECIPROCITY  arises from identity of cause and necessarily, two obligations are created at the same time. Each party is acreditor and debtor of the other and they are to perform simultaneously. ●Recognized   “implied or tacit resolutory condition” imposed exclusively by law, even if there is no corresponding agreementbetween parties    it’s also called  RESOLUTION   
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