ARTICLE 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.
Presumption as to benefit of
period.
 In an obligation subject to a period fixed by
the parties, the period is presumed to have
been established for the benefit of both the
creditor and debtor. This means that before
the expiration of the period, the debtor may
not fulfill the obligation and neither may the
creditor demand its fulfillment without the
consent of the other especially if the latter
would be prejudiced or inconvenienced
thereby.
EXAMPLE :
 On January 1, D borrowed from C P10,000
payable on December 13 at 15% interest. D
cannot pay before December 31 without the
consent of C. Neither can C compel D to pay
before the expiration of the term.

 It is presumed that the period designated,

which is December 31, has been established
for the benefit of both. D is benefited because
he can use the money for one year . C is also
benefited because of the interest the money
would earn for one (1) year.
 In a contract of loan with interest, the term is
generally for the benefit of both the lender
and the borrower.

 This is also the case even where there is no

interest stipulated but where under the
contract, the creditor receives, in place of
interest, other benefits by reason of the period.

 Obviously, in the above example, D can pay

C before December 31 provided the payment
includes the interest for one year. Where the
obligation of D is to deliver, say 100 bags of
rice, C cannot be compelled to accept
performance before the expiration of the
period especially if he would be prejudiced or
inconvenienced thereby.
Exceptions to the general rule:
 1. Term is for the benefit of the debtor alone.
Examples :
a.) D borrowed from C P1,000 to be paid within
one year without interest.

b.) D promised to pay his debt “on or before

December 31, 2008.”

c.)D promised to pay his debt “for a term of five

years counted from this date.” It has been held
that the debt is payable within five years.

He HE CANNOT BE COMPELLED TO PAY PREMATURELY BUT HE CAN IF HE

DESIRES TO DI SO.
Exceptions to the general rule:
 2. Term is for the benefit of the creditor.
Example :

D borrowed from C P1,000 payable on

December 31 with the stipulation that D
cannot make payment before the lapse
of the period but C may demand
fulfillment even before said date.
HE MAY DEMAND FULFILLMENT EVEN BEFORE THE ARRIVAL OF THE TERM BUT
THE DEBTOR CANNOT REQUIRE HIM TO ACCEPT PAYMENT BEFORE THE
EXPIRATION OF THE STIPULATED PERIOD.
Computation of term/period
1. THE Administrative Code of 1987,
however, provides:

 Legal periods - “YEAR” shall be understood to be

twelve calendar months ; “month” of thirty days,
unless it refers to a specific calendar month in
which case it shall be computed according to the
number of days the specific month contains ;
“DAY” to a day of twenty-four hours ; and “night”
from sunset to sunrise.
(Chap. Vlll, Book I, Sec. 31 thereof)
Computation of term/period
2. A calendar month is a month
designated in the calendar without
regard to the number of days it may
contain. “It is the period of time running
from the beginning of a certain
numbered day up to, but not if there is
not sufficient number of days in the next
month, then up to and including the last
day of that month.”
To illustrate :
One calendar month from December 31, 2010 will be
from January 1, 2011 to January 31, 2011; one calendar
month from January 31, 2011 will be from February 1, 2011
until February 28, 2011.

Under the Administrative Code, a

year is composed of 12 calendar
months, the number of days being
irrelevant.
END
PRESENTED BY : FULLON, GIER FIRENZE A.