Sec 2

SECTION 2. — Obligations with a Period ARTICLE. 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.
(1125a) Meaning of obligation with a period. An obligation with a period is one whose
consequences are subjected in one way or another to the expiration of said period or term.
Meaning of period or term. A period is a future and certain event upon the arrival of which
the obligation (or right) subject to it either arises or is terminated. It is a day certain which must
necessarily come although it may not be known when, like the death of a person. Kinds of
period or term. They are: (1) According to effect: (a) Suspensive period (ex die). — The
obligation begins only from a day certain upon the arrival of the period (Art. 1193, par. 1.); and
(b) Resolutory period (in diem). — The obligation is valid up to a day certain and terminates
upon the arrival of the period. (par. 2.) ARTICLE. 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.
Payment before arrival of period. Article 1195 applies only to obligations to give. It is similar to
Article 1188, paragraph 2, which allows the recovery of what has been paid by mistake before
the fulfillment of a suspensive condition. The creditor cannot unjustly enrich himself by
retaining the thing or money received before the arrival of the period. Under the former
provision, the debtor could recover only the fruits or interests but not the thing or sum given or
paid in advance. This rule was deemed unjust and “contrary to the manifest intention of the
parties.’’ 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. 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 the 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.
ARTICLE. 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. When obligation can be demanded before
lapse of period. The general rule is that the obligation is not demandable before the lapse of the
period. However, in any of the five (5) cases mentioned in Article 1198, the debtor shall lose
every right to make use of the period, that is, the period is disregarded and the obligation
becomes pure and, therefore, immediately demandable. The exceptions are based on the fact
that the debtor might not be able to comply with his obligation. (1) When debtor becomes
insolvent. — EXAMPLE: D owes C P10,000.00 due and payable on December 20. If D
becomes insolvent, say on September 10, C, can demand immediate payment from D even
before maturity unless D gives sufficient guaranty or security.
The Insolvency in this case need not be judicially declared. It is sufficient that the assets
of D are less than his liabilities or D is unable to pay his debts as they mature. Note that the
insolvency of D must occur after the obligation has been contracted. In a case, the statement of
the Chairman of the Board of Directors of the mortgagor-corporation that it was “without funds,
neither does it expect to have any funds in the foreseeable future” was held a proof of its
insolvency. ( When debtor does not furnish guaranties or securities promised. —
EXAMPLE: Suppose in the same example, D promised to mortgage his house to secure the
debt. If he fails to furnish said security as promised, he shall lose his right to the period. (3)
When guaranties or securities given have been impaired or have disappeared. —
EXAMPLE: If the debt is secured by a mortgage on the house of D, but the house was burned
through his fault, the obligation also becomes demandable unless D gives a new security equally
satisfactory. In this case, the house need not be totally destroyed as it is sufficient that the
security be impaired by the act of D. But in case of a fortuitous event, it is required that the
security must disappear. But if the security given deteriorates in such a manner as to become
illusory, it must be deemed to have disappeared or lost as contemplated in paragraph 3. If the
debt is secured by a bond, the failure of D to renew the bond or replace it with an equivalent
guarantee upon its expiration will likewise give C the right to demand immediate payment.

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SECTION 2. — Obligations with a Period ARTICLE. 1193.

Obligations for whose

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