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Section 2 - Obligations with a period`

ART. 1193. Obligations for whose fulfillment a daycertain has been fixed, shall be demandable only whenthat day comes.

Obligations with a resolutory period take effect atonce, but terminate upon arrival of the day certain.

A day certain is understood to be that which mustnecessarily come, although it may not be known when.

If the uncertainty consists in whether the day willcome or not, the obligation is conditional, and it shall beregulated by the rules of the preceding Section.

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Period Defined A period is a future and certain length of time whichdetermines the effectivity or the extinguished ofobligation.

Obligation with a period is one whoseconsequences are subject in one way or another tothe expiration of said period or term. (8Manresal58)

A day certain is understood to be that which mustnecessarily come, although it may not be knownwhen.

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Period and Condition Distinguished: a) As to fulfillment - A period is a certain eventwhich must happen sooner or later while a

condition is an uncertain event.

b) As to time a period refers only to the futurewhile a condition may refer to a pastunknown event.

c) As to influence or effect on the obligation the period fixes the time of the effectivity ofthe obligation while a condition may causethe demandability of the obligation to ariseor to terminate.

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ART. 1194. In case of loss, deterioration orimprovement of the thing before the arrival of theday certain, the rules in article 1189 shall beobserved. (n)

Effect of loss, deterioration, or improvement before thearrival of period.

Note the cross reference to Art. 1189, NCC.Example:

If A is suppose to deliver to B a particular car on

Dec. 19, 1999 by the car was destroyed byfortuitous event in July 1, 1999, the obligation isextinguished.

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ART. 1195. Anything paid or delivered before thearrival of the period, the obligor being unaware of theperiod or believing that the obligation has become deand demandable, may be recovered, with the fruits andinterests. (1126a)

Effect Of Payment Before Arrival of Period

This article which is similar to Article 1188, NCC, in anobligation to give, allows the recovery of what has beenpaid by mistake before the fulfillment of a suspensivecondition.

Example -E owes G P20, 000.00, which was supposed to be paid onDecember 25 this year. By mistake, E paid his obligation onDecember 25 last year. Assuming that today is only June 30,E can recover the amount plus interest therein. But E cannotrecover, except he interest, if the debt had already maturedor if E had knowledge of the period.

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ART. 1196. Whenever in an obligation a period isdesignated, it is presumed to have been

established for the benefit of both the creditor andthe debtor, unless from the tenor of the same orother circumstances it should appear that theperiod has been established in favor of one or ofthe other. (1127)

Presumption As to Benefit Of A Period The general rule is that when a period is fixed by theparties , the period is presumed to be for the benefitof both creditor and debtor.

Which means that before the expiration of the period,the debtor may not fulfill the obligation and neitherthe creditor demand its fulfillment.

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By way of exceptions, however, if the tenor of the obligation orother circumstances may indicate that a period is have beenestablished for the benefit of either the creditor or debtor:

1. For the benefit of both creditor and debtorExample Gaya obtained a loan of P10, 000 at 12% interest per annum fromTito for one year. Gaya has a period of one year within which to usethe money, while Tito will benefit from the interest which the moneywill earn.

2. For the benefit of the creditorExample -Gaya executes a promissory note in favor of Tito which reads: Ipromise to pay Tito or order the amount of P10, 000 on demand.

Thus, Tito can demand payment from Gaya anytime.

3. For the benefit of debtorExample Gaya executes a promissory note which reads: I promise to payTito r order the amount of P 10,000 or before December 31, 2001.

Gaya can pay her obligation on or before Dec. 31, 2001.

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ART. 1197. If the obligation does not fix a period, butfrom its nature and circumstances it can be inferred that

a period was intended, the courts may fix the durationthereof.

The courts shall also fix the duration of the period when itdepends upon the will of the debtor. In every case, the courts shall determine such period asmay under the circumstance have been probablycontemplated by the parties. Once by the courts, theperiod cannot be changed by them. (1128 a)

Court Generally is Without Power to Fix a Period If an obligation does not state a judicial period and noperiod is intended, the court is not authorized to fix a period.The courts have no right to make contracts for the parties.

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ART. 1198. The debtor shall lose every right to makeuse of the period:

1) When after the obligation has been contracted, hebecomes insolvent, unless he gives a guaranty orsecurity 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, andwhen through a fortuitous event they disappear,unless he immediately gives new ones equallysatisfactory;

4) When the debtor violates any undertaking, inconsideration of which the creditor agreed to theperiod;

5) When the debtor attempts to abscond. (1129a)

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When Debtor Loses The Right to

Make Use Of A Period The general rule is that the obligation is notdemandable before the lapse of the period. The

exceptions are based on the fact that the debtormight not be able to comply with his obligation:

1. When debtor becomes insolvent:

The insolvency need not be judicially declared. It issufficient that the debtor has less assets than his liabilitiesor if debtor is unable to pay his debts as they mature. It isnoted that the insolvency of the debtor must occur afterthe obligation has been contracted.

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When Debtor Loses The Right to

Make Use Of A Period 2. When debtor does not furnish guaranties or securitiespromised:

Example:Gaya borrowed loan from Tito which loan was secured by achattel mortgage of Gayas car as a guaranty. After obtainingthe loan, Gaya fails or does not execute a chattel mortgage,the loan becomes demandable or the debtor loses her right tomake use of the period.

3. When by his own acts he has impaired said guaranties or securities:

Example:Gaya borrowed P50, 000 from Tito which loan was secured bya chattel mortgage on Gaya s car. Later, Gayas fault, thecar was damaged or she causes the impairment of the car,Gaya loses her right to make use of the period, unless she givesanother one equally satisfactory.

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When Debtor Loses The Right to

Make Use Of A Period 4. When by fortuitous event, the guaranty or security was lost. Example:Gaya borrowed P50, 000 from Tito which loan was secured by a chattelmortgage on Gayas car. After obtaining the loan, the car was lost byfortuitous event. Gaya loss her right to male use of the period unless she

gives another guaranty or security equally satisfactory.

5. When debtor violates an undertaking Example:Art secured a loan from Arnold on condition that Art will paint the house ofArnold. If after the proceeds of the loan was given to Art, he did not pant

the house of Arnold, Art loses his right to make use of the period.

6. When the debtor attempts to abscond. Abscond means a depart or escape from creditors knowledge to avoidpayment of his debt. Mere attempt on the part of debtor will entitle thecreditor to demand payment of the obligation without waiting for the

period to expire.