ARTICLE 1188: Actions to preserve Creditors rights: if not allowed to take appropriate action, there is a danger the creditor

will receive nothing, as when the object is deliberately destroyed, hidden or alienated. Appropriate actions means to sue in court, as well as other remedies such as asking for security if the debtor is about to be insolvent or asking the court to prevent alienation or concealment of pendent conditionae. Right of Debtor to recover what was paid by mistake: what was paid by mistake may be recovered because, after all, the condition may not materialize. In the meantime, the debtor has lost the use of the object. It is unfair for the creditor to unjustly enrich himself (solution indebiti, undue payment). The debtor is also entitled to fruits or legal interest if the creditor bein bad faith, that is, if the creditor knew that payment was being made prior to the fulfillment of the condition ART 1189 Loss, Deterioration, and Improvement During the Pendency of the Condition: Applies only if: 1)The suspensive condition is fulfilled; and2)The object is specific (not generic) 3 things that may happen to the object of an obligation pending the fulfillmentof a suspensive condition: 1.May be lost a. Without the fault of the debtor b.With fault of the debtor c.Partly with and partly without the fault of the debtor 2.May deteriorate (value is reduced or impaired) a.Without the fault of the debtor b.With the fault of the debtor c.Partly with and partly without the fault of the debtor 3.May be improved a.By nature or by time b.Through the expense of the debtor c.Partly through nature or time and partly by the debtor Loss: it is understood that a thing is lost if a)When it perishes b)When it goes out of commerce c)When it disappears in such a way that its existence is unknown d)When it disappears in such a way that it cannot be recovered Effects of Partial Loss: a)That would amount to a loss important enough to be considered a complete loss(this will be determined by the courts). b)That would merely be considered a deterioration of the thing, in which case the rules on deterioration should apply.

ART 1190 Effects when Resolutory Condition is Fulfilled 1.The obligation is extinguished. 2.Because the obligation had been extinguished and considered to have had no effect, the parties should restore to each other what they have received. 3.Aside from the actual things received, the fruits or the interests thereon should also be returned after deducting of course the expenses made for their production, gathering and preservation. 4.The rules given in Art. 1189 will apply to whoever has the duty to return in case of the loss, deterioration, or improvement of the thing. 5.The courts are given power to determine the retroactivity of the fulfillment of resolutory conditions. ART 1191 Right to Rescind: means the right to cancel or resolve the contract or reciprocal obligations in case of non-fulfillment on the part of one. This the rescission referred to here is not predicated on injury to economic interests on the part of the party plaintiff (which is the basis for the rescission mentioned in Arts. 1380 and 1381), but on the breach of faith by the defendant, which breach is violative of the reciprocity between the parties. Reciprocal Obligations: refers to obligations where two parties are reciprocally obliged to door give something. It is not enough that both parties are indebted to each other. The cause must be identical and the obligations should arise simultaneously. Parenthetically, in reciprocal contracts or transactions, the obligation or promise of each party is the cause or consideration for the obligation or promise of the other. Characteristics of the Right to Rescind orResolve: 1.It exists only in reciprocal obligations. Be itnoted, however, that if the obligation isreciprocal but with a period, neither partycan demand performance or beconsidered in default before the expirationof the period. 2.It can be demanded only if the plaintiff isready, willing and able to comply with hisown obligation, and the other is not.Otherwise, if neither is ready, neither canresolve. Moreover, the guilty party cannotrescind. He who comes to equity mustcome with clean hands. 3.The right to rescind is not absolute. Thus: a.Trivial causes or slight breacheswill not cause rescission. b.If there be just cause for fixing theperiod within which the debtor cancomply, the court will not decreerescission c.If the property is now in the handsof an innocent third party who haslawful possession of the same. 4.The right to rescind needs judicialapproval in certain cases, and in others,does not need such approval. a.Judicial approval is needed whenthere has already been delivery of the object (unless of course there isa voluntary returning). b.Judicial approval is not neededwhen there has been no deliveryyet. Or in case there has beendelivery, the contract stipulate thateither party can rescind the sameor take possession of the propertyupon non-fulfillment of the party.5.The right to rescind is implied (presumed)to exist and, therefore, need not beexpressly stipulated upon.6.The right to rescind may be waived,expressly or implied. Choice by the Injured Party: 1)The injured party may choose between:a.Fulfillment (specific performance)(plus damages)b.Or rescission (plus damages)2)The right is alternative and an alternativeprayer may be made in a court complaintunless either had been waived previously. 3) The right is not conjunctive, that is, theplaintiff cannot ask for both remedies. Thus, if the plaintiff elects fulfillment of areciprocal obligation, rescission thereof may not be declared at the same time.However, in some cases, in the interest of justice partial rescission and partialfulfillment may be allowed.However, the rule is still that therescission or resolution of a contract hasthe effect of abrogating it in all its parts,the creditor cannot demand rescission,and still insist on the performance of

subordinate stipulations. Hence, a clauseallowing for attorneys fees for theforeclosure of a mortgage cannot beavailed of if the mortgage itself isrescinded. 4) The injured party who has electedfulfillment may, if fulfillment beimpossible, still ask for rescission(provided that rescission is otherwiseproper). The rule is vice-versa, providedthe court has not yet given final judgment.5)If an action is brought for specificperformance, the damages sought mustbe asked in the same action; otherwisethe damages are deemed waived.