OBLICON 1D BERNARDO

Obligations and Contracts Chapter 3 Nature and Effect of Obligations Section Obligations !ith a "eriod Article 11#3 Obligations for !hose fulfill$ent a da% certain has been fi&ed' shall be de$andable onl% !hen that da% co$es( Obligations !ith a resolutor% period ta)e effect at once' but ter$inate upon arri*al of the da% certain( A da% certain is understood to be that !hich $ust necessaril% co$e' although it $a% not be )no!n !hen If the uncertaint% consists in !hether the da% !ill co$e or not' the obligation is conditional and it shall be regulated b% the rules of the preceding section( Concept of +er$ , a space of ti$e !hich' e&erting an influence on obligations as a conse-uence of a .uridical act' either/ 1( suspends their de$andabilit%' or ( deter$ines their e&tinguish$ent In general As to re-uisites As to fulfill$ent As to influence upon obligation As to retroacti*e effect Condition Refers to an e*ent 0uture 1ncertain 2a% or $a% not happen 3e*en if e*ent $ust happen as in arts( 1145 and 11467 E&erts an influence upon the *er% e&istence of the obligation itself 3either gi*es rise or e&tinguishes obligation7 :as retroacti*e effects +er$ or "eriod Refers to an inter*al of ti$e 0uture Certain "ossible 8ill S1REL9 co$e to pass' although $a% not be )no!n !hen :as no effect upon e&istence of obligations and e&erts an influence onl% upon its de$andabilit% or perfor$ance NO retroacti*e effects unless there is a special agree$ent to the contrar% 2a% refer to past e*ent Al!a%s refers to the un)no!n to the parties future As to effect 8hen a condition is left 8hen the duration or of !ill of e&clusi*el% to the !ill of period is left e&clusi*el% debtor the debtor' the *er% to the !ill of the debtor' *alidit% of he obligation the obligation is still is affected *alid I$possible periods/ 1( perfor$ance is to be $ade on the 34;th da% because there are onl% 3<6 da%s of the %ear ( act is to be done on the ne&t birthda% of one alread% dead 3( period is too short for the prestation 5( period is contrar% to the *er% nature of the .uridical act in*ol*ed As to +i$e =inds of +er$s Ro$an La! Classification 1( Suspensi*e 3e& die7 , period that 21S+ lapse before the perfor$ance of an obligation > fro$ a da% certain ( Resolutor% 3in die$7 , period after !hich the perfor$ance $ust ter$inate > to a da% certain According to Source 3( Legal , period fi&ed b% la! 5( ?oluntar% , stipulated b% the parties 6( @udicial , allo!ed b% the courts <( E&press , specificall% stated A( +acit , !hen a person underta)es to do so$e !or) !hich can be done onl% during a particular season 4( Original #( "eriod of Brace , an e&tension fi&ed b% the parties or in court 1;( Definite , fi&ed )no!n date and ti$e 11( Indefinite or indeter$inate , e*ent !hich !ill necessaril% happen but date of its happening is un)no!n

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OBLICON 1D BERNARDO
Cuncertaint% referred to here does not con*ert the period into a condition' as long as there is NO 1NCER+AIN+9 as to !hether the e*ent 8ILL :A""EN OR NO+ Effect of "eriod Obligations !ith a ter$ are de$andable ONL9 !hen the da% fi&ed for their perfor$ance arri*es D In actions for reco*er% of debts pa%able in install$ents' those not %et due and pa%able cannot be de$anded in the co$plaint D Right of action arises onl% !hen the date fi&ed has arri*edE right of prescription $ust also be counted onl% fro$ such date of $aturit%' NO+ fro$ the date of obligation D Once date stipulated arri*es' obligation can be enforced An action $a% be brought I22EDIA+EL9 to EN0ORCE an obligation that is originall% !ith a ter$ in the follo!ing situations/ 1( If contract in !hich the ter$s is i$posed has been cancelled b% $utual agree$ent of parties ( 8hen nonDfulfill$ent of the ter$s of the contract resol*es the period and authorizes the creditor to i$$ediatel% de$and perfor$ance In such cases' obligation is con*erted to "1RE obligation Suspension of "eriod In the e*ent of a fortuitous e*ent or force $a.eure' contract shall be dee$ed S1S"ENDED during said period D Does not $ean that the happening of those e*ents stops the running of the period !hich the contract has agreed upon to run D Onl% relie*es the parties fro$ the fulfill$ent of their respecti*e obligations during that ti$e D If contract is stipulated to run for & nu$ber of %ears as abc as board of directors( Before & %ears arri*e' c !as pre*ented to perfor$ his function throughout the stipulated %ears( 1pon the lapse of & %ears' c cannot e&tend so as to $a)e up for %ears he $issed Effect of 2oratoriu$ 2oratoriu$ , a postpone$ent of the fulfill$ent of an obligationE an e&tension of of the period for the perfor$ance of the obligation' decreed b% statute D +ES+ to deter$ine constitutionalit% of a $oratoriu$ la!/ chec) the period of suspension of the re$ed% o 2ust be definite and reasonable Article 11#5 Iin cases of loss' deterioration or i$pro*e$ent of the thing before the arri*al of the da% certain' the rules in article 114# shall be obser*ed Article 11#6 An%thing paid or deli*ered before the arri*al of the period' the obligor being una!are of the period or belie*ing that the obligation has beco$e due and de$andable' $a% be reco*ered' !ith the fruits and interests( Old ci*il code does not pro*ide for reco*er% if debtor pa%s in ad*ance' onl% b% !a% of e&ception is a debtor allo!ed to reco*er 8I+: fruits and interest I0 he paid in ignorance( +he present ci*il code therefore pro*ides an EFCE"+ION !ithout pro*iding for the general rule' !hich in effect bars recovery for paying in advance with knowledge of the period ( Beneral rule is $erel% left to i$plication( 11<5 , right to the fruits pertain to the creditor ONL9 fro$ the $o$ent the obligation to deli*er the thing arisesE Reason and e-uit% dictate that the fruits and interests be reco*ered for pa%$ents $ade in ad*ance because 1( +he creditor has no right to it %et ( If fruits and interests for the !hole period !ere paid together !ith the principal before the end of the period' 3or before $aturit%7 then the debtor !ould in effect be pa%ing the creditor in e&cess of !hat he o!es Cannot reco*er the principal $one% or thing itself that is paid in ad*ance because there is an obligation to pa% such and $erel% pa%ing in ad*ance $eans fulfill$ent of that obligation

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OBLICON 1D BERNARDO
D But the code co$$ission belie*es that allo!ing the creditor to )eep !hat has been paid in ad*ance is contrar% to the intent of the parties Burden of proof of ignorance of the period lies !ith debtorE it is "RES12ED that debtor )no!s of the period and that obligation is not %et due D Sa$e rule e-uall% applies to creditor "a%$ent 8I+: =NO8LEDBE of ter$ D If pa%$ent !as $ade ?OL1N+ARIL9' 8I+: =NO8LEDBE of period' pa%$ent CANNO+ be reco*ered D Considered as debtor ha*ing tacitl% !ai*ed benefit of the ter$' therefore not entitled to reco*er an%thing since the obligation' at that ti$e of pa%$ent' is considered to be alread% $atured Article 11#< 8hene*er in an obligation a period is designated' it is presu$ed to ha*e been established for the benefit of both the creditor and the debtor' unless for$ the tenor of the sa$e or other circu$stances it should appear that the period has been established in fa*or or one or of the other "resu$ption , that the benefit is for both parties D Credit cannot DE2AND pa%$ent D Debtor cannot $a)e an effecti*e +ENDER and CONSIBNA+ION of pa%$ent before the period stipulated 3debtor cannot pa% in ad*ance7 o pa%$ent in ad*ance !ould depri*e creditor of his benefit to the interest that is due hi$ D benefit due to creditor/ interest and such other benefits arising fro$ the reasons that the creditor ga*e $one% !hich $a% depend upon econo$ic circu$stances li)e fluctuating of *alue of currenc% or for safe)eeping of the $one% instead of hi$ holding on to it 3Cloo) belo!7 D benefit due to debtor/ use of the thing or $one% obtained If benefit is for CREDI+OR ONL9 D Creditor $a% de$and perfor$ance at an% ti$e D B1+ debtor CANNO+ co$pel creditor to accept pa%$ent before the period e&pires

Applies ONL9 to obligations +O BI?E Effect of the arri*al of the ter$ D Allo!s reco*er% of the +:INB AND 2ONE9 I+SEL0' "L1S fruits and interests !hich has accruied fro$ the $o$ent of pa%$ent to the date of reco*er% D If action is not brought b% debtor before the actual date of $aturit%' right to reco*er !ill CEASE o But ratione legis 3reason of the la!7 !ill still .ustif% reco*er% of fruits and interest fro$ the ti$e of pa%$ent to the date of $aturit% Right to 0ruits and Interests D "resent article allo!s debtor to reco*er fruits and interests in ALL CASES !here he paid under a $ista)e as to the period D Should be construed in relation to pro*isions on solution indebiti or pa%$ent of !hat is NO+ D1E( o 1nder solution indebiti' a creditor !ho accepts pa%$ent in BAD 0AI+:' or !ith )no!ledge that period has not %et arri*ed' shall pa% LEBAL IN+ERES+ for $one% or shall be liable for 0R1I+S for things that produce fruits o If creditor acted in BOOD 0AI+: or under a 2IS+A=EN belief that pa%$ent !as alread% due' liable for the fruits that ha*e so far benefited hi$ Not!ithstanding pre$ature pa%$ents 3regardless of7' fruits and interest CANNO+ be reco*ered in the follo!ing cases/ 1( 8hen the obligation is reciprocal and there has been premature performance on both sides ( 8hen the obligation is a loan on !hich the debtor is bound to pay interest 3( 8hen the period is e&clusi*el% for the benefit of the creditor' because debtor' !hen pa%ing in ad*ance loses nothing

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OBLICON 1D BERNARDO
If benefit for DEB+OR onl% D Debtor $a% oppose a pre$ature de$and for pa%$ent D Debtor $a% also *alidl% pa% at an% ti$e before the period e&pires In contracts of loan D If gratuitous or !ithout interest/ +er$ is for e&clusi*e benefit of debtor D If interest is stipulated/ period is for the benefit of both parties o +herefore debtor cannot pa% in ad*ance 1NLESS he also pa%s the 01LL IN+ERES+ for the period agreed upon Other circu$stances that the parties $a% ha*e ta)en into consideration in fi&ing the period' $a)ing the ter$ for the benefit for both debtor and creditor/ 1( creditor $a% !ant to )eep his $one% in*ested safel% instead of ha*ing it in his hands ( creditor sought to protect hi$self fro$ sudden decline in the purchasing po!er of the currenc% 3( an% other reason !hich the creditor $a% ha*e to deri*e so$e ad*antage 5( e*en if there is no interest stipulated' period $a% still be for the benefit of both !hen the credit recei*es O+:ER BENE0I+S b% reason of the ter$ 3in !hich case the benefits deri*ed $a% ta)e the place of the interest7 Because of these circu$stances' creditor cannot be co$pelled to accept pa%$ent before stipulated period e&pires' e*en if debtor offers to pa% full interest 8ai*er of the creditor b% $eans of acceptance of pa%$ent 3e*en partial pa%$ent7 b% the creditor before the end of the stipulated period D considered a 8AI?ER b% the creditor of the agreed ter$ D a relin-uish$ent of the creditorGs right to refuse an% pa%$ent before the e&piration of the ter$ D But $ust not be considered a no*ation of the contract>agree$ent "eriod for the benefit of DEB+OR D 8hen stipulation states that pa%$ent is to be $ade H!ithinI the agreed period D Since it is for the benefit of the debtor' the debtor $a% !ai*e the period and pa% in ad*anceE but the creditor cannot de$and pa%$ent before D end of period( D "a%able Hfor a ter$ of 6 %ears counted fro$ this dateI has been held to $ean either that pa%$ent be $ade at the end of 6%rs or at an% ti$e !ithin 6 %rs fro$ date of contract' !hich $eans that debtor can !ai*e period and offer to pa% before 6 %rs and creditor cannot refuse Article 11#A If the obligation does not fi& a period' but fro$ its nature and the circu$stances it can be inferred that a period !as intended' the courts $a% fi& the duration thereof( +he courts shall also fi& the duration of the period !hen it depends upon the !ill of the debtor In e*er% case' the courts shall deter$ine such period as $a% under the circu$stances ha*e been probabl% conte$plated b% the parties( Once fi&ed b% the courts' the period cannot be changed b% the$( Application D Onl% to obligations !ithout a period fi&ed b% the parties D 8hene*er a period is fi&ed b% the court pursuant to this pro*ision' court does not a$end or $odif% the obligationE it $a% onl% enforce or carr% out an i$plied stipulation in the contract Courts $a% fi& a ter$ in the follo!ing cases/ 1( 8hen ter$ of a lessee has been left to the !ill of the lessee>debtor ( +er$s of a donation i$posing certain conditions do not fi& the ti$e for the perfor$ance of the conditions 3( 8hen building contract did not fi& a definite period !ithin !hich the engineer !as to co$plete the construction 5( 8hen there is unreasonable interpretation of the i$$ediate de$andabilit% of pure obligations' courts $a% fi& a reasonable ti$e in !hich the debtor $a% pa%

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OBLICON 1D BERNARDO
8hen a decision is rendered confor$abl% !ith a co$pro$ise agree$ent but no ti$e is specified !ithin !hich the parties should co$pl% !ith their co$$it$ents' EI+:ER "AR+9 $a% $o*e the court to ha*e a period fi&ed for the co$pliance of their respecti*e co$$it$ents D :O8E?ER' $ere failure of the parties to fi& a period !ill NO+ AL8A9S @1S+I09 the court in fi&ing one +he follo!ing stipulations constitute a period that is fi&ed b% the parties and the courts cannot be .ustified in fi&ing a period/ 1( Obligation to pa% another the proceeds of the latterGs tobacco as soon as the% are disposed of ( Obligation is pa%able on de$and 3( 8hen the obligation is pure' si$ple and unconditional' debtor cannot as) for the period to be fi&ed b% the court !hen he cannot sho! that the intention of the creditor !as to grant hi$ one +he onl% action that $a% be $aintained based on this article is the AC+ION +O AS= +:E CO1R+ +O 0IF A +ER2 8I+:IN 8:IC: +:E OBLIBOR 21S+ CO2"L9 8I+: :IS OBLIBA+ION( D 0ulfill$ent of the obligation itself cannot be de$anded until after the court has fi&ed a period of co$pliance and such period has arri*ed D Action for collection !ithout a period being fi&ed is i$proper D 0or Cuba' But it is not necessar% for the period to be fi&ed first in a pre*ious final .udg$ent on a case filed for that purpose+he period $a% be granted in the sa$e .udg$ent in !hich pa%$ent is ordered D In the "hilippines' rules of pleading and procedure prohibit the abo*e ruling( o 0i&ing a period and ordering of pa%$ent cannot be $ade in the sa$e action , this !ould i$pl% causes of action in the sa$e co$plaint 0irst cause of action is for courts to fi& a period Second cause of action is for specific perfor$ance Second cause Is pre$ature because as of the filing of the co$plaint the first cause' the fi&ing of the period' has not %et been settled b% .udg$ent( +he period for co$pliance for the second has not %et been fi&ed( "eriod to be fi&ed b% the court becomes part of contract and until such time as that period expires, NO ACT ON to enforce payment may be validly brought NO+E/ both causes of action are sub.ect to the rules of prescription and the corresponding prescripti*e periods B1+ SC has ruled that a separate action rule $a% not be adhered to !hen such technicalit% need not be adhered to and !hen such separate action !ould .ust a cause of dela%

In fi&ing the period' the court $ust ascertain the ter$ probabl% conte$plated b% the parties D It CANNO+ ARBI+RARIL9 fi& a period D Once a period is fi&ed b% the court' such period beco$es a part of the contract o Such period being alread% part of the contract can no longer be e&tended or changed b% the court 8I+:O1+ +:E CONSEN+ O0 BO+: +:E "AR+IES o Default of debtor co$$ences onl% A0+ER +:E EF"IRA+ION of the period fi&ed b% the court Article 11#4 +he debtor shall lose e*er% right to $a)e use of the period/ 1( 8hen after the obligation has been contracted' he beco$es insol*ent' unless he gi*es a guarant% or securit% for the debtE ( 8hen he does not furnish to the creditor the guaranties or securities !hich he has pro$isedE

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OBLICON 1D BERNARDO
3( 8hen b% his o!n acts he has i$paired said guaranties or securities after their establish$ent' and !hen through a fortuitous e*ent the% disappear' unless he i$$ediatel% gi*es ne! ones e-uall% satisfactor%E 5( 8hen the debtor *iolates an% underta)ing' in consideration of !hich the creditor agreed to the periodE 6( 8hen the debtor atte$pts to abscond In cases pro*ided for in this article' the obligation beco$es i$$ediatel% due and de$andable e*en if the period has not %et e&pired' con*erting the obligation into a "1RE one( Insol*enc% of debtor NEED NO+ be declared in an insol*enc% proceeding( It is enough that he is in such a state of financial difficult% that is unable to pa% his debts( D DEBREE of insol*enc% to @1S+I09 i$$ediate enforce$ent is a $atter left to the courts D Such insol*enc% $ust occur after the obligation !as constituted Art11#4 does not appl% to the e&tension of the period fi&ed b% $oratoriu$ statutes D 2oratoriu$/ a te$p period !herein debtors $a% postpone pa%$ent of debts D 2oratoriu$ la!s are specificall% enacted because of the financial difficult% of the debtors Loss of Securities D If caused b% acts of debtor/ disappearance or i$pair$ent need not be total D If caused b% fortuitous e*ent' there $ust be +O+AL disappearance in order to depri*e the debtor of the benefit of the ter$ D Disappear J loss 3perished' gone out of co$$erce or disappeared in a !a% that its e&istence is un)no!n or it cannot be reco*ered7 D

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