1. 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)

2. Positive Obligation.
This article refers to positive (suspensive) conditionthe happening of an event at a determinate time.
The obligation is extinguished:
1) As soon as the time expires without the event
taking place
2) As soon as it has become indubitable that the event
will not take place although the time specified has
not expired.

3. 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)

4. Negative Obligation.
This provision speaks of a negative condition- that
an event will not happen at a determinate time. (see
Art. 879.) The obligation shall become effective and
binding:
from the moment the time indicated has elapsed without
the event taking place; or
2) from the moment it has become evident that the event
can not occur, although the time indicated has not yet
elapsed.
1)
If no time is fixed, the circumstances shall be considered to
arrive at the intention of the parties. This rule may also
be applied to a positive condition.

5. ART. 1186. The condition shall be
deemed fulfilled when the obligor
voluntarily prevents its fulfillment.
(1119)

6. Kinds or classifications of condition:
1)
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.
2) 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. Ian’s right
over the car is extinguished upon his passing the CPA board. Ian is now
obliged to return the car.

7. 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
prestation 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)

8. Effects of the 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
B’s right over the land retroacts to the date when the
obligation was constituted.

9. 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 A’s 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.

10. 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.

11. 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)

12.  Paragraph I of the above article authorizes the
creditor to take any appropriate actions for the
preservation of creditor’s 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.

13. 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:
a) The debtor paid the creditor before the fulfillment of the
condition;
b) Payment made by debtor was through mistake and error;
a) 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.

14. 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:

15. I.
In case of loss of the thing:
a) If the thing is lost without the fault of the
debtor, the obligation shall be
extinguished.
Ex: 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.

16. b) 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;
Ex: 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.

17. II. When the thing deteriorate
c)
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.
Ex: 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.
d)
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.

18. III. When the thing improved
e)
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.
f)
If the thing is improved at the expense of the
debtor, he have no other right than that granted
to the usufructuary. By usufruct is meant the
right to enjoy the property of another which
includes the right to enjoy and use the fruits of
the property.

19. Kinds of Loss
Loss in civil law may be:
1) Physical loss - When it perishes (as when a house is
burnt to ashes)
2) Legal loss - When it goes out of commerce (as when
the object before is un-prohibited becomes
prohibited)
3) Civil loss - When disappears in such a way that its
existence is unknown (as when a particular car has
been missing for some time). 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).

20. 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)

21. Effects when resolutory condition is fulfilled
1.
2.
3.
4.
5.
The obligation is extinguished. (Art. 1181, NCC)
Because the obligation is extinguished and considered to have had no
effect, the parties should restore to each other what they have received.
The fruits and interests thereon should also be returned after
deducting of course the expenses made for the production, gathering
and preservation, if any.
The rules given in Art. 1189, will apply to whoever has the duty to
return in case of loss, deterioration or improvement of the thing.
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.

22. 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. (1123)

23. Right to rescind:
The right to rescind means the right to cancel or to resolve
in case of reciprocal obligation in case of nonfulfillment on the part of one.
Example:
In a contract of sale, the buyer can rescind if the seller does not
deliver or the 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:
Demand fulfillment of the obligation plus damages; or
2. Demand rescission of the obligation plus damages.
1.

24. 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.

25. 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)

26. Period defined:
 A period is a future and certain length of time which
determines the effectivity or the extinguished of
obligation.
 Obligation with a period is one whose consequences
are subject in one way or another to the expiration of
said period or term.
 A day certain is understood to be that which must
necessarily come, although it may not be known
when.