MIDTERM EXAMINATION in OBLIGATIONS AND CONTRACT

1. Illustrate an obligation subject to:

(a) Suspensive Condition

When an obligation is subject to a suspensive condition, the creation of the obligation will depend
on the occurrence of an event or on the certainty that the event will not occur; thus, the condition
delays the creation of a relationship between the parties. As long as the condition has not occurred,
the very existence of the obligation is not yet arises. For example, If your rent is due on the 30th,
you have an obligation to pay the rent. The performance topay occurs on the 30th. The performance
is suspended until the 30th.

(b) Resolutory Condition

Resolutory condition refers to a condition whereby, upon fulfillment terminates an already

enforceable obligation. The continuance of such a contract is made dependent upon the happening
of an uncertain future event. However, there is no postponement or suspension of the contract and
all rights and obligations come into existence immediately upon conclusion of an agreement
between the parties. For instance, You have a car note over the next 10 years. Once you pay the
last payment at the end of 10 years, the obligation ends.

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

The suspensive condition is when the parties agree that the duty to perform is postponed until a
determined or determinable date due to the pending event, and that this event is certain to happen.
However, the exact date is unknown. The obligation will arises when the said condition is already
fulfilled. While in the resolutory condition, when the parties agree that the obligations in the
contract will be terminated upon a certain future time. This exact time is certain to happen, but the
exact date is unkown.

2. Give two (2) cases when the conditional obligation is valid although the condition depends
entirely upon the will of the debtor. Explain.

First case is 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. G binds himself to pay Ms.
Y of his debt that costs P10,000 little by little. This obligation is valid and it shall be deemed to be
one with a period of time. Next case is when the debtor is capable of doing the said obligation. For
example, Marie borrowed 5,000 to Rose payable on September 13. Due to the review of financial
reverses, Marie now is not capable on paying the debt to Rose but Marie is willing to pay the said
debt. The remedies of Rose will arise .
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3. May an obligor be liable under an obligation subject to a suspensive condition although

the condition has not yet been fulfilled? Explain.

Under the suspensive condition, the obligation will arises when the said condition is already
fulfilled. Therefore, under this type of condition, the obligor or the debtor is not yet liable. The
debtor would be liable if the condition is already fulfilled.

4. In 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?

Upon the fulfillment of the obligation, the seller 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 its pendency.

5. State the rules in case the thing to be delivered:

(a) is lost with the debtor’s fault; without his fault;

If the delivery lost is due to the debtor’s fault, the debtor has an obligation to pay the damages that
incurred and the price of the thing that is lost also can be demand. If the delivery lost without the
fault of the debtor, the debtor is not liable for any obligation or the obligation shall be extinguished.
We are not liable for the fortuitous event or any event that beyond our powers.

(b) Deteriorates with the debtor’s fault; without his fault

If it deteriorates through the fault of the debtor, the creditor may choose between the 2 remedies
as a creditor, which is the rescission or the fulfillment of the obligation, with damages that incurred
in either case. As a creditor, you only have to choose one of the remedies that are given. If it
deteriorates without the fault of the debtor, the value of thing that delivered will be depreciated
and the value will be reduced due to the deterioration of the thing.

II. Explain or state briefly the rule or reason for your answer.

1. D (debtor) borrowed 20,000 from C (creditor) payable on or before August 30. Before the
arrival of the due date, C agreed to the promise of B to pay C if B wants. Can C insist that B
pay not later than August 30?

On this situation, the conditional obligation whose fulfillment depends partly on the will of the
debtor and partly upon the will of the third person is perfectly valid. In this case, it shows that the
creditor demands the third person to pay him not later than August 30 but on the said case, they
agreed on the promise of the third person to pay the creditor if the third person wants. Therefore,
the creditor cannot demand to the debtor if the due date is not yet passed.
 MIDTERM EXAMINATION in OBLIGATIONS AND CONTRACT

2. Suppose in the same problem, D obliges himself to pay C 10,000 after C has
paid his obligation to T. Is the obligation valid?

The said condition is considered as the suspensive condition

wherein the obligation will only arises if the condition is already fulfilled. The
debtor obliges himself to pay the creditor if the creditor already paid the third
party. If the creditor has not yet fulfilled his obligation to the third party, he
cannot demand the debtor to pay him immediately. Therefore, the obligation of
the debtor is invalid. The debtor is not liable to pay the creditor if the creditor is
not yet paid to the third party.
3. S (Seller) agreed to sell to B (buyer) a specific car for 200,000, delivery of the
car and the payment of the price to be made on June 15. Suppose S delivered the
car on June 15 but B failed to pay the price, what are the remedies of S?

If the buyer does not comply with his obligation to pay, the seller
may choose between the two remedies: (a) action for specific performance
(fulfillment) of the obligation with the damages; or (b) action for the rescission
of the obligation also with damages. The seller has the privilege to choose
only one of the remedies, and not both. If the creditor chosen rescission, he
cannot demand the fulfillment of obligation to the buyer. Same as, if he chosen
the buyer to fulfill the obligation, he cannot practice the rescission later on.

4. S sold a parcel of the land to B for 240,000 payable in installment of 20,000 a

year. The land was delivered to B who obtained ownership thereof. After B had
paid 200,000, he could no longer continuing paying in view of financial reverses
but he was willing to pay the balance of 40,000 if given more time. Thereupon, S
sued for rescission under Article 1191. If you were the judge, would you grant
rescission?

If I were the judge, I would grant the rescission of Seller in

default a term or period for the performance of the Buyer. The buyer is willing
to comply with his obligation to pay the maintaining balance that cost 40,000
but needs time to do so due to the view of his financial reverses, not because
he doesn’t want to pay the maintaining balance that he’d left.

5. D (debtor) binds himself to pay C (creditor) a sum of money. Give the three (3)
cases when the obligation of D is demandable at once by C?

 When the obligation is pure…

An obligation is demandable at once if it is pure obligation which
one is not suspended by any condition, whether it has been contracted
without any condition, or when thus contracted, the condition has been
performed. It is immediately demandable. Their agreement doesn’t
have specific date, and conditions so the creditor can demand to pay
the said amount to the debtor.
 MIDTERM EXAMINATION in OBLIGATIONS AND CONTRACT

 When the obligation is subject to a resolutory condition…

On the above description of resolutory obligation, once the
condition is already fulfilled, the obligation will be extinguished. The creditor can demand to the
debtor during the fulfilling of the condition.

 When the obligation is subject to a resolutory period…

Same as the case above, the creditor can demand to the buyer
while in the process of fulfilling the condition. If the creditor and the
debtor agree on the period wherein the obligation is extinguished, he
can demand to the buyer to pay the amount he borrowed.

OBLIGATIONS AND CONTRACTS

1. When is a thing considered as lost in the context of obligations and contracts?

2. Albert agreed to import rice from Vietnam and deliver it to Jeremiah. They also agreed that
Jeremiah will pay PHP 1800 pesos for each sack of rice deliver. They did this after considering and
computing the expenses and the distance between Vietnam and the Philippines and all other
expenses. After the execution of the agreement, China declared war against the Philippines and
blocked the South China Sea.

The only way now from Vietnam to the Philippines is to go around the world by passing through
India then to Europe, the United States and across the Pacific to the Philippines. With this
development, Albert claims that his obligation to import rice and to deliver it to Jeremiah has
been extinguished. Is he correct? Explain.

3. Geraldine had several debts to Marjorie. The first debt is in the amount of Five thousand pesos
borrowed on January 1, 2016. The second is in the amount of Five Thousand Pesos borrowed on
February 1, 2016 and the third is in the amount of Five Thousand Pesos which earns interest at a
rate of One Percent per month. Only the debt incurred on January 1, 2016 is due and Geraldine
only have Five Thousand Pesos in her hands. If she gives her money to Marjorie for the payment
of her debt, will the rule on application of payments be applied? Explain

4. Perez owes Felix PHP 5000. When Perez met his close friend Andrew, he informed the latter about
the debt. Being a good friend, Andrew offered to pay the debt. Since Perez does not have any
money, he consented to the payment of the debt by Andrew. When Andrew went to Felix to pay
the debt, Felix refused to accept the payment since Andrew is a stranger to him. Does Felix have
a right to refuse the payment? Explain?

5. Regan is obliged to give an Iphone 4 to Mary. However, Regan have many Iphone 6 in his
possessions but does not have and Iphone 4 so he delivered and Iphone 6 instead to Mary. The
Iphone 6 is much better and more expensive than the Iphone 4. Upon learning that Regan
delivered and Iphone 6, Mary refused to accept it and demanded an Iphone 4. Due to this dispute,
 MIDTERM EXAMINATION in OBLIGATIONS AND CONTRACT

they approached their mayor for advice. The Mayor then advised them that Regan deliver an
Iphone 6 to Mary and compel her to accept it instead of an Iphone 4 since the former is better. Is
the advice of the mayor legally correct? Explain.