LESSON 3: Kinds of Obligations

Classification of Obligations:
The Civil Code classifies obligations primarily into: (PU CO
PE ALFA JOS DIP)
1. Pure;
2. Conditional;
3. With a period;
4. Alternative;
5. Facultative;
6. Joint;
7. Solidary or several or in solidum;
8. Divisible;
9. Indivisible;
10. With a penal clause.
 Other provisions of the Civil Code, however, impliedly
admit other classes of obligations, to wit:

a.) Unilateral and bilateral;

b.) determinate and generic;
c.) legal, conventional and penal;
d.) real and personal
 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)
1. Pure Obligation when the obligation contain no
term or condition whatever upon which depends the
fulfillment of the obligation contracted by the
debtor.
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 no 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:
1. Suspensive and Resolutory
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:
2. Potestative, Casual and Mixed
Potestative is one the fulfillment of which depends
upon the sole will of the debtor. This kind of
condition is void.
Example:
I will pay you if I want.
Casual is one the fulfillment of which depends
upon chance or will of third person.
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:
4. Positive and Negative:
Positive condition consists in the performance of an act
Negative condition. Consists in the omission of an act. 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:
3. Possible and Impossible
Impossible condition is divided into 2:
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 the Pacific Ocean.

b) legal Impossibility when the condition imposed

is contrary to law, good custom or public policy.
 Example:
1. Contrary to law Pedro agrees to give Ernesto
P100,000 if Ernesto will kill Mario.
2. 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.
3. 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:
5. Divisible and Indivisible
Divisible susceptible of partial performance
Indivisible not susceptible of partial performance

Divisible that part of obligation which is not affected by

impossible or unlawful condition shall be valid (Art. 1183,
NCC)
Example-
X 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.
 Kinds or classification of condition
Express and Implied
Express clearly stated
Implied condition merely inferred

Conjunctive and disjunctive

Conjunctive - there are several conditions and all
must be fulfilled
Disjunctive there are several conditions and only
one or some of them must be fulfilled.
 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, X is
entitled to the fruits which the land may produce,
X 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. The debtor paid the creditor before the fulfillment of the

condition;
2. Payment made by debtor was through mistake and error;
3. 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) If the thing is lost without the fault of the debtor,

the obligation shall be extinguished.
2) 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;
1) When the thing deteriorates without the fault of
the debtor, the impairment is to be borne by the
creditor;
2) 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;
3) If the thing is improved by its nature, or by
time, the improvement shall inure to the
benefit of the creditor;
4) If it is improved at the expense of the debtor, he
shall have no other right than that granted to
the usufructuary (right to enjoy use and fruits)
 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:
Physical Loss
a) When it perishes (as when a house is burnt to ashes)
Legal Loss
b) When it goes out of commerce (as when the object before
is unprohibited becomes prohibited)
Civil Loss
c) When disappears in such a way that its existence is
unknown (as when a particular car has been missing for
some time)

d) 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) 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.
b) 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. The obligation is extinguished. (Art. 1181, NCC)
2. Because the obligation is extinguished and considered to
have had no effect, the parties should restore to each
other what they have received.
3. The fruits and interests thereon should also be returned
after deducting of course the expenses made for the
production, gathering and preservation, if any.
4. 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.
5. 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. Demand fulfillment of the obligation plus damages;
or
2. 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)