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  • Section 2 - Obligations with a period

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ART.

  • 1193.

Obligations for whose fulfillment a

day certain has been fixed, shall be demandable only

when that day comes.

  • Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain.

  • A day certain is understood to be that which must necessarily come, although it may not be known when.

  • If the uncertainty consists in whether the day will

come or not, the obligation is conditional, and it shall be regulated by the rules of the preceding Section.

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. (8Manresal58)

  • A day certain is understood to be that which must necessarily come, although it may not be known when.

Kinds of Period

According to Effect

  • 1. Suspensive the obligations begins only from a day certain upon arrival of the period.

  • 2. Resolutory the obligation is valid to a day certain and terminates upon the arrival of the period.

According to definiteness

  • 1. Definite period when it is fixed or it is known when it will come.

  • 2. Indefinite when it is not fixed or it is not known when it will come. When it is not fixed but a period is intended, the courts are empowered to fix the same.

Period and Condition Distinguished:

  • a) As to fulfillment

- A period is a certain event which

must happen sooner or later while a condition is an uncertain event.

  • b) As to time a period refers only to the future while a condition may refer to a past unknown event.

  • c) As to influence or effect on the obligation the period fixes the time of the effectivity of the obligation while a condition may cause the demandability of the obligation to arise or to terminate.

  • ART. 1194. In case of loss, deterioration or

improvement of the thing before the arrival of the day certain, the rules in article 1189 shall be

observed. (n)

  • Effect of loss, deterioration, or improvement before the arrival of period.

Note the cross reference to Art.

  • Example:

1189, NCC.

If A is suppose to deliver to B a particular car on

Dec. 19, 1999 by the car was destroyed by fortuitous

event in July 1, 1999, the obligation is extinguished.

ART. 1189. When the conditions have been imposed with the intention of suspending the efficacy of
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)

  • ART. 1195. Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or believing that the obligation has become due and demandable, may be recovered,

with the fruits and interests. (1126a)

  • Effect Of Payment Before Arrival of Period

This article which is similar to Article 1188, NCC, in

an obligation to give, allows the recovery of what has been paid by mistake before the fulfillment of a suspensive condition.

  • Example - E owes G P20, 000.00, which was supposed to be paid on December 25 this year. By mistake, E paid his obligation on December 25 last year. Assuming that today is only June 30, E can recover the amount plus interest therein. But E cannot recover, except the interest, if the debt had already matured or if E had knowledge of the period.

  • ART. 1196. Whenever in an obligation a period is designated, it is presumed to have been established for the benefit of both the creditor and the debtor, unless

from the tenor of the same or other circumstances it

should appear that the period has been established in favor of one or of the other. (1127)

  • Presumption As to Benefit Of A Period The general rule is that when a period is fixed by the parties , the period is presumed to be for the benefit of both creditor and debtor.

  • Which means that before the expiration of the period, the debtor may not fulfill the obligation and neither the creditor demand its fulfillment.

  • By way of exceptions, however, if the tenor of the obligation or other circumstances may indicate that a period is have been established for the benefit of either the creditor or debtor:

    • 1. For the benefit of both creditor and debtor

      • Example Gaya obtained a loan of P10, 000 at 12% interest per

annum from Tito for one year. Gaya has a period of one year within which to use the money, while Tito will benefit from the interest which the money will

earn.

  • 2. For the benefit of the creditor

    • Example - Gaya executes a promissory note in favor of Tito

which reads: “I promise to pay Tito or order the

amount of P10, 000 on demand. Thus, Tito can

demand payment from Gaya anytime.

  • 3. For the benefit of debtor

    • Example – Gaya executes a promissory note which reads: “I promise to pay Tito or order the amount of P 10,000 on or before December 31, 2001. Gaya can pay her obligation on or before Dec. 31, 2001.

  • ART. 1197.

If the obligation does not fix a period, but

from its nature and circumstances it can be inferred that a period was intended, the courts may fix the

duration thereof.

The courts shall also fix the duration of the period when it depends upon the will of the debtor.

In every case, the courts shall determine such

period as may under the circumstance have been

probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them. (1128 a)

  • Court Generally is Without Power to Fix a Period

If an obligation does not state a judicial period and no period is intended, the court is not authorized to fix a period. The courts have no right to make contracts for the parties.

Exceptions to the general rule

  • 1. If the obligation does not fix a period but it can be inferred from its nature and circumstances that a period is intended.

Example:

S sold a parcel of land to B with a right of repurchase. No term is specified in the contract for the exercise of the right. Then, the court is authorized to fix the period to

repurchase.

  • 2. If the duration of the period depends upon the sole will of the debtor

Example:

I will pay you as soon as possible. Here , the period is not

fixed, so the court may fix the same because if this is not so the obligation may never be complied with by the debtor.

  • ART. 1198. The debtor shall lose every right to make use of the period:

1)

When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the debt;

2)

When he does not furnish to the creditor the guaranties or securities which he has promised ;

3)

When by his own acts he has impaired said guaranties or securities after their establishment,

and when through a fortuitous event they disappear,

unless he immediately gives new ones equally satisfactory;

4)

When the debtor violates any undertaking, in

consideration of which the creditor agreed to the

period; 5) When the debtor attempts to abscond. (1129a)

When Debtor Loses The Right to

Make Use Of A Period

  • The general rule is that the obligation is not demandable before the lapse of the period. The exceptions are based on the fact that the debtor might not be able to comply with his obligation:

    • 1. When debtor becomes insolvent:

The insolvency need not be judicially declared. It is sufficient that the debtor has less assets than his liabilities or if debtor is unable to pay his debts as they mature. It is noted that the insolvency of the debtor must occur after the obligation has been contracted.

When Debtor Loses The Right to Make Use Of A Period

  • 2. When debtor does not furnish guaranties or securities promised:

Example:

Gaya borrowed loan from Tito which loan was secured by a

chattel mortgage of Gaya’s car as a guaranty. After

obtaining the loan, Gaya fails or does not execute a chattel mortgage, the loan becomes demandable or the debtor

loses her right to make use of the period.

  • 3. When by his own acts he has impaired said guaranties or securities:

Example:

Gaya borrowed P50, 000 from Tito which loan was secured

by a chattel mortgage on Gaya ‘s car. Later, Gaya’s fault, the

car was damaged or she causes the impairment of the car, Gaya loses her right to make use of the period, unless she

gives another one equally satisfactory.

When Debtor Loses The Right to

Make Use Of A Period

  • 4. When by fortuitous event, the guaranty or security was lost.

Example:

Gaya borrowed P50, 000 from Tito which loan was secured

by a chattel mortgage on Gaya’s car. After obtaining the

loan, the car was lost by fortuitous event. Gaya loss her

right to make use of the period unless she gives another

guaranty or security equally satisfactory.

When debtor losses the right to make use of a period

  • 5. When debtor violates an undertaking Example:

Art secured a loan from Arnold on condition that Art will paint the house of Arnold. If after the proceeds of the loan was given to Art, he did not paint the house of Arnold, Art loses his right to make use of the period.

  • 6. When the debtor attempts to abscond.

Abscond means to depart or escape from creditor’s knowledge to avoid payment of his debt. Mere attempt on the part of debtor will entitle the creditor to demand payment of the obligation without waiting for the period to expire.