Section 2.

– Obligations with a Period Article 1193:

 Period - is a future and certain length of which determines
--------------------------------------------------------------------------- the effectivity or the extinguished of obligation.
ARTICLE 1193. Obligations for whose fulfillment a day  Obligation with a period – is one whole effects or
certain has been fixed, shall be demandable only when that day consequences are subjected in one way or another to the
comes. expiration or arrival of said period or term.
Obligations with a resolutory period take effect at  A day certain – is understood to be that which must
once, but terminate upon arrival of the day certain. necessarily come, although it may not be known when.
A day certain is understood to be that which must
necessarily come, although it may not be known when. Period and Condition Distinguished
If the uncertainty consists in whether the day will Period Condition
come or not, the obligation is conditional, and it shall be As to fulfillment Certain event Uncertain event
regulated by the rules of the preceding section. May refer also to
--------------------------------------------------------------------------- Refers only to past event
As to time
ARTICLE 1194. In case of loss, deterioration or improvement future unknown to the
of the thing before the arrival of the day certain, the rules in parties
article 1189 shall be observed. Merely fixes the Causes an
--------------------------------------------------------------------------- As to influence time of the obligation either
ARTICLE 1195. Anything paid or delivered before the arrival on the obligation effectivity of the to arise or to
of the period, the obligor being unware of the period or obligation cease
believing that the obligation has become due and demandable, Depends upon the
Depends upon the
may be recovered, with the fruits, and interests. As to effect, will of the debtor
sole will of the
--------------------------------------------------------------------------- when left to empowers the
debtor invalidates
ARTICLE 1196. Whenever in an obligation a period is debtor’s will court to fix the
the obligation
designated, it is presumed to have been established for the duration thereof
benefit of both the creditor and the debtor, unless from the tenor The arrivals of
of the same or other circumstances it should appear that the period does not
period has been established in favor of one of the other. As to have any The happening of
--------------------------------------------------------------------------- retroactivity of retroactive effect a condition has
ARTICLE 1197. If the obligation does not fix a period, but effects (unless there is an retroactive effect
from its nature and the circumstances it can be inferred that a agreement to the
period was intended, the courts may fix the duration thereof. contrary)
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 Kinds of period term:
as may under the circumstances have been probably (A) According to effect
contemplated by the parties. Once fixed by the courts, the 1. Suspensive Period (Ex Die)  a term or period with
period cannot be changed by them a suspensive effect, which means the obligation
--------------------------------------------------------------------------- becomes effective only from the arrival of a certain
ARTICLE 1198. The debtor shall lose every right to make use day.
of the period: Ex.: Joey promises to support Rachel from the
(1) When after the obligation has been contracted, he becomes death of Rachel’s father, which means the
insolvent, unless he gives a guaranty or security for the debt; obligation only begins from the death of Rachel’s
(2) When he does not furnish to the creditor the guaranties or father.
securities which he has promised;
(3) When by his own acts he has impaired said guaranties or 2. Resolutory Period (In Diem) - a term or period with
securities after their establishment, and when through a a resolutory effect, which means the obligation will
fortuitous event they disappear, unless he immediately gives subsist up to a certain day and it terminates upon the
new ones equally satisfactory; arrival of that day.
Ex.: Joey promises to support Rachel until Rachel
(4) When the debtor violates any undertaking, in consideration
reaches her majority age, which means the
of which the creditor agreed to the period;
obligation is already effective but will terminate
(5) When the debtor attempts to abscond. once Rachel turns 18.
---------------------------------------------------------------------------
(B) According to source Article 1194:
1. Legal Period – when it is provided for by laws This article speaks of loss, deterioration or
2. Conventional or voluntary period – when it is improvement of the thing before the arrival of the day certain.
agreed to by the parties. Condition of the thing Effect
3. Judicial period – when it is fixed by the court. LOST
 Without fault of the
(C) According to definiteness Obligation is extinguished
debtor
1. Definite Period - when it is fixed or it is known when  Fault of the debtor Obligation to pay damages
it will come. DETERIORATES
2. Indefinite Period - when it is not fixed or it is not
 Without fault of the The impairment is borne by
known when it will come. the creditor
debtor
- where the period is not fixed but a period is
The creditor may choose to
intended, the courts are usually empowered by
rescind with indemnity for
law to fix the same.
 Fault of the debtor damages, or have it
fulfilled, but still with
 On or About Period – a given date means only a indemnity for damages
few days after the stated date, but not a remote
IMPROVEMENT
date or one fixed by the obligor.
 By its nature Inures to the benefit of the
creditor
Requisites for a valid term or period:
The debtor shall have no
1. It must be future  At the expense of the
other right than that granted
2. It must be certain, that is, sure to come but may be debtor
to the usufructuary.
extended by mutual agreement;
3. It must be possible physically and legally.
Article 1195:
Example: X owes Y P20,000 which is supposed to be paid on August
 Effect of Period - Obligations with a term are 25 this year. By mistake X paid his obligation on August 25 last year.
demandable only when the day fixed for their Assuming that today is February 25, X can recover the P20,000 plus
performance arrives. P600 which is the interest for (6) six months or one half year at the
Thus, in actions for the recovery of debts payable in legal rate of 12% or a total of P10,600. But X cannot recover, except
installments, those not yet due and payable cannot be the interest, if the debt had already matured.
demanded in the complaint.
 Payment before the arrival of period - Article 1195 is
 Suspension of Period - Although the contract shall be applied only in the obligation to give. It has no application
deemed suspended if fortuitous event or force majeure to do or not to do. It is similar to article 1188, para. 2, which
transpires does not necessarily mean that an event or allows the recovery of what has been paid by mistake
contract will stop its period from running for what it is before the fulfillment of a suspensive condition. The
agreed upon. creditor cannot unjustly enrich himself by retaining the
Ex.: Y was indebted to X, Y promised to pay all his thing or money received before the arrival of the period.
debt every week for 6 months in which X agreed.
One day, Y was bumped by a car causing him not  Right to interests and fruits - The debtor has the right to
to work for 3 weeks. The period of him paying his demand for the thing which is been paid in mistake. This
debt in three weeks was suspended but he must still
article is in relation to solutio indebiti or payment is not
pay his debt in 6 months’ time.
due.

 Effect of Moratorium Laws - Moratorium is used to

Fruits and interest cannot be recovered in the following cases:
denote a period of time during which the law
1. When the obligation is reciprocal or mutual, and there
authorizes a delay in payment of debts or performance
has been premature performance on both sides;
of some other legal obligation. This moratorium is
2. When the obligation is loan, debtor is bound to pay
most often invoked during the times of distress, such
interest.
as wars or natural disasters.
3. Period is exclusively for the benefit of the creditor,
because the debtor by paying in advance loses nothing.
 Burden of Proof - The debtor in this provision must have Article 1197:
to prove his ignorance of the period. That he is unaware of Court generally without power to fix a period
the due date. The same rule should equally apply to the If the obligation does not state a period and no period is
creditor. intended, the court in NOT authorized to fix a period. The
courts have no right to make contracts for the parties.
 Payment with knowledge of term - The payment cannot
be recovered when the debtor voluntarily paid his debt with Exceptions to the general rule:
his knowledge of the period. As if the debtor tacitly waived 1. No period is fixed but a period was intended
the term of the payment. As a result, obligation is already 2. Duration of the period depends upon the will of the debtor
matured.
Article 1198:
Question General Rule: The obligation is not demandable before the
What are the things to be prove in order for the debtor to recover or lapse of the period.
demand for the payment which is premature? However, when the debtor commits any of the acts
mentioned in article 1198, the period is disregarded and the
Answer
creditor is entitled to demand the fulfillment of the obligation.
There must be burden of proof, the debtor must have to prove his
The obligation thus becomes a pure obligation which is
ignorance of the period. He must not aware of the due date of the
agreed payment of the debt. immediately demandable.

Article 1196: When obligation can be demandable before lapse of period:

 Presumption when a period is designated - it is 1. When debtor becomes insolvent
Ex.: Ico owes Pat 10,000 due and payable on December.
presumed that the period is intended for the benefit of both
If she becomes insolvent, pat can demand immediate
the creditor and debtor such as a loan with interest.
payment from Ico even before maturity unless gives
sufficient guaranty or security.
Ex.: On January 1, D borrowed from C P10 000 payable on
2. When debtor does no furnish guaranties or
December 31 at 15% interest. D cannot pay before December 31
securities promised
without the consent of C. Neither can C compel D to pay before
Ex.: Suppose in the same example. Ico promised to
the expiration of the term.
mortgage his house to secure debt. If she fails to furnish
 D is benefited because he can use money for one year.
said security as promised, she shall lose his right to the
 C is also benefited because of the interest the money
period.
would earn for one year.
3. When guaranties or securities given have been
impaired or have disappeared
Exemptions to the General Rule:
Ex.: If the debt is secured by a mortgage on the house of
1. Term is for the benefit of the debtor alone - he
Ico, but the house was burned through his fault, the
cannot be compelled to pay prematurely, but he can, if obligation also becomes demandable unless Ico gives a
he desires to do so. new security equally satisfactory.
2. Term is for the benefit of the creditor - Creditor may In this case, the house need not be totally destroyed as it
demand the performance of the obligation at any time is sufficient that the security be impaired by the act of
but the debtor cannot compel him to accept payment Ico. But in case of a fortuitous event, it is required that
before the expiration of the period (e.g. “on demand”) the security must disappear.
If the debt is secured by a bond, the failure of Ico to
renew the bond or replace it with an equivalent
Computation of term or period
guarantee upon its expiration will likewise give jigs the
1. The Administration Code of 1987, provides:
right to demand immediate payment.
> Legal Period:
4. When debtor violates an undertaking
Year – 365 days Ex.: Now, suppose that Ico agreed to the period in
Month – 30 days consideration of the promise of Jigs to repair the piano
Day – 24 hours of Ico. The violationof this undertaking by Jigs gives Ico
Night – from sunsets to sunrise the right to demand immediate payment of the loan.
2. Months designate by their names – computed by the 5. When debtor attempts to abscond
number of days which they respectively have. Ex.: Before the due date of the obligation, Ico changed
her address without informing Jigs and with the
intention of escaping from his obligation. This act of Ico
is a sign of bad faith which results in the loss of his right
to the benefit of the period stipulated. Observe that a
mere attempt or intent to abscond is sufficient.
1. (Art. 1198) Right of seller to recover whole purchase price of
vessel sold on installment basis, which disappeared, while
being delivered, due to a fortuitous event.
Facts:
S sold to B a launch for P16,000.00 payable in quarterly
installments of P1,000.00 each with interest at 10% per annum.
The launch was shipwrecked and became a total loss while en
route to B’s place of business. S brought action for the recovery
of the whole purchase price.
Issue:
Is S entitled to the whole purchase price or only for the amount
of the unpaid installments due under the express terms of the
contract when the complaint was filed?
Held:
Yes. The security for the payment of the purchase price of the
launch itself having disappeared as a result of an unforeseen
event and no other security having been substituted therefor, S
was clearly entitled to recover judgment not only for the
installments of the indebtedness due under the terms of the
contract at the time when he instituted the action, but also for
all installments which, but for the loss of the vessel, had not
matured at that time.