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THE LAW ON OBLIGATIONS AND CONTRACTS

Answer the following questions:

1. Define the following:

A. Condition

Article 1179 defines condition as a future and uncertain event, upon the
happening of which, the effectivity or extinguishment of an obligation (or right) subject
to it depends. Also, this article obviously uses the disjunctive ‘or’ between ‘future’
and ‘uncertain’ to distinguish pure obligation from both the conditional obligation and
one with a period. In addition, condition may also refer to a past event unknown
to the parties. If it refer to a future event, both its very occurrence and the time of
such occurrence must be uncertain; otherwise, it is not a condition. A condition
has two principal kinds which are the suspensive condition and resolutory condition.

B. Civil Loss

It is a kind of loss in civil law wherein it happens when a thing disappears in such
a way that its existence is known; for example, a particular dog has been missing
for sometime; or even if known, it cannot be recovered (Art. 1189), whether as a
matter of fact; for example, a particular ring is dropped from a ship at sea; or of
law, for example, a property is lost through prescription.

C. Reciprocal Obligations

Article 1191 defines reciprocal obligation as an obligation arises from the same
cause and in which each party is a debtor and creditor of the other, such that the
performance of one is designed to be the equivalent and the condition for the
performance of the other. Each party may treat the fulfilment of what is
incumbent upon the other as a suspensive condition to his obligation and its non-
fulfilment, as a tacit or implied resolutory condition, giving him the right to demand
the rescission of the contract.

D. Pure Obligation

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According to Article 1179, a pure obligation is one which is not subject to any
condition and no specific date is mentioned for its fulfillment as is, therefore,
immediately demandable. As this happens, the obligation is demandable at once
because it does not depend upon a future or uncertain event, not on a past event
unknown to the parties and is not an obligation with a resolutory condition.

E. Potestative Condition

Potestative condition is a condition suspensive in nature and which depends

upon the sole will of one of the contracting parties is unknown. In addition, a
distinction must be made between the effects of a potestative condition whose
fulfillment depends exclusively upon the will of the creditor and the effects of one
whose fulfillment depends exclusively upon the will of the debtor.

2. What is the effect of the fulfillment of the condition in a conditional obligation?

Explain

If the condition is suspensive, both parties agree that the duty to perform the
obligation is postponed until a determined or determinable date due to the pending
event, and that event is certain to happen. Upon the occurrence of the event, the
suspended part of the contract is brought to exist. The obligation will arise when the
condition is already fulfilled. It is because the law prevents that the obligor will benefit to
his own fault or bad faith.

On the other hand, in the case of resolutory condition, the fulfillment of the
obligation will be terminated upon a certain future time as the both parties will agree to
do so. The exact time is certain to happen, but the exact date is unknown. There will be
no suspension of terms in the contract itself. Rights and obligation come into existence
immediately upon the agreement between the parties; and if the condition is fulfilled, the
operation of the obligation stops.

3. Give two (2) cases when the conditional obligation subject to a suspensive
condition although the condition has no yet been fulfilled? Explain

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Case 1: When the debtor promises to pay when his means permit him to do so.
In this case, what depends upon the will of the debtor is the duration of the period when
he is capable on paying his debt and not whether he should comply or not.

For example, Mr. A binds himself to pay Mr. B of his debt that cost Php
10,000.00 little by little. This obligation is valid and it shall be deemed to be one with a
period of time.

Case 2: When the debtor is capable of doing the said obligation.

For example, Mr. A borrowed Php 5,000.00 to Mr. B payable on February 25.
Due to the review of financial reverses, Mr. A now is not capable on paying the debt to
Mr. B but Mr. A is willing to pay the said debt

Under the suspensive condition, the obligation will arise when the said condition
is already fulfilled. Thus, under this type of condition, the obligor is not yet liable; only if
the condition is already fulfilled.

4. In an obligation to give a parcel of land subject to a suspensive condition, who

is entitled to the fruits that accrued during the pendency of the condition once
said condition is fulfilled?

In an obligation to give a parcel of land subject to a suspensive condition,

consequent to the fulfillment of the obligation, the creditor has the right to keep to
himself all the fruits and interests he may have received during the pendency of the
condition, unless a contrary intention by the seller that he shall render an accounting of
fruits received during pendency.

5. State the rules in case the thing to be delivered is lost with the fault of the
debtor and without the fault of the debtor. Explain

As stated in Article 1189, 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. For example, if the loss occurred because of the negligence of

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the debtor, the creditor will be entitled to demand damages; plus incidental damages, if
any. However, in the case that the lost is not the fault of the debtor, the obligation
shall be extinguished. As a general rule, a person is not liable for a fortuitous event. For
example, if the loss happened without the debtor’s fault, he is not liable to the creditor.

6. State the rule in case the thing to be delivered deteriorates with the fault of the
debtor and without the fault of the debtor. Explain

As the Article 1192 explains, in the case the thing to be delivered deteriorates
with 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.

On the other hand, when the thing deteriorates without the fault of the debtor, the
imprisonment is to be borne by the creditor.

7. State the rule where both parties are guilty of breach. Explain

In the case where both parties are guilty of breach, according to Article 1192, 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 be bear his own damages.

To the extent, if the situation in which the first infractor known, wherein one party
violated his part of the obligation; subsequently, the other also violated his part of the
obligation. In this case, the liability of the first infractor should be equitably reduced.

On the other hand, in the case in which the first infractor cannot be determined,
wherein one party violated his violation followed by the other, but it cannot be
determined which of them was the first infractor. The rule is that the contract shall be
deemed extinguished and each shall bear his own damages.

In effect, the court shall not provide remedy to either of the parties, who must
suffer the damages allegedly sustained by them.

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