Module IV
OBLIGATIONS WITH A PERIOD
(Arts. 1193 – 1198)
OBLIGATIONS WITH A PERIOD, CONCEPT
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
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 (like the year 2025; next Christmas),
although it may not be known when, like the death of a person.
PERIOD AND CONDITION DISTINGUISHED
1. As to fulfillment – a period is certain event which must happen
sooner or later at a date known beforehand, or at a time which cannot be
determined, while a condition is an uncertain event;
2. As to time – a period refers only to the future, while a condition
may refer also to a past event unknown to the parties;
3. As to effect, when left to the debtor’s will – a period which depends
upon the will of the debtor empowers the court to fix the duration thereof,
while a condition which depends upon the sole will of the debtor invalidates the
obligation; and
4. As to retroactivity of effects – unless there is an agreement to the
contrary, the arrival of a period does not have any retroactive effect, while the
happening of a condition has retroactive effect.
KINDS OF PERIOD OR TERM
1. Suspensive period (Ex die) – the obligations begin only from a day
certain upon the arrival of period;
Example: I will pay you 30 days from today.
2. Resolutory Period (In diem) – the obligation is valid up to a day
certain and terminates upon arrival of the period.
Example: I will give you P500.00 a month until the end of the year.
Problem:
“I will pay you when my means permit me to do so.” Is this an obligation
with a period or with a condition?
Answer:
This is an obligation with a period. Here, the remedy of the creditor is to
ask the court to fix the period (Arts. 1180, 1197). Once court has fixed the
period, it may no longer change it as it becomes a part of the agreement by the
parties.
EFFECTS OF LOSS, DETERIORATION, OR IMPROVEMENT BEFORE
ARRIVAL OF PERIOD (Art. 1194)
Refer to the discussion in Article 1189.
PAYMENT BEFORE ARRIVAL OF PERIOD (Art. 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 interest.
Example: D owes C P10,000 which was supposed to be paid on
December 31 this year. By mistake, D paid his obligation on December 31 last
year.
Assuming that today is June 30, D can recover the 10,000 plus the legal
interest. But D cannot recover, except the interest, if the debt has already
matured.
Neither can D recover if he had knowledge of the period. D is deemed to
have impliedly renounced the period.
PRESUMPTION AS TO WHO HAS THE BENEFIT OF THE PRIOD (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.
Therefore, the debtor cannot be compelled to perform, and the creditor
cannot be compelled to accept performance, before the term expires.
Example: D borrowed P10,000 from C on January 2020. The loan bears
interest at 10% per annum with both principal and interest being due on
December 31, 2020. Before December 31, 2020, C cannot compel D to pay and
deprive him of the use of the money until the said date. Neither may D compel
C to accept payment before December 31, 2020 and deprive C of the interest
for the remaining term.
Exception to Article 1196:
1. Term is for the benefit of the debtor alone – he cannot be compelled
to pay prematurely, but he can, if he desires to do so.
Example: D borrowed from C P1,000 to be paid within one year without
interest. In this case, the period of one year should be deemed intended for the
benefit of D only. Therefore, he can pay any time but he cannot be compelled to
pay before one year.
2. Term id for the benefit of the creditor – he may demand fulfillment
even before the arrival of the term but the debtor cannot require him to accept
payment before the expiration of the stipulated period.
Example: D borrowed from C P1,000 payable on December 31, 2020 with
the stipulation that D cannot make payment before the lapse of the period but
C may demand fulfillment even before said date. Here, C can demand payment
at any time but D cannot shorten the one year period without the consent of C.
Ordinarily, there must be a stipulation granting the benefit of the term to only
the creditor.
WHEN THE COURT MAY FIX THE PERIOD ( Art. 1197)
1. If the obligation does not fix a period, but from its nature and
circumstances it can be inferred that a period was intended.
Example: D is obliged to construct the mansion of C. However, no period
was indicated in the agreement as to when D must complete the construction
of the mansion. Here, it is clear that a period was intended since the
construction of the mansion will take some time to complete. C may thus go to
the court and ask it to fix the duration of the construction of the mansion.
2. When the duration of the period depends upon the will of the
debtor.
Example: I will pay you when my means permit me to do so. Here, the
creditor may go to the court and ask it to fix the duration of payment.
WHEN OBLIGATION CAN BE DEMANDED BEFORE LAPSE OF PERIOD (Art.
1198)
General Rule: Obligation is not demandable before the lapse of the
period.
Exceptions: 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 P1,000 due and payable on December. If D
becomes insolvent, say on September 10, C can demand immediate
payment from D before maturity unless D gives sufficient guaranty or
security.
2. 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 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.
4. When debtor violates an undertaking
Example: In the same example, suppose that C agreed to the period in
consideration of the promise of D to repair the piano of C. The
violation of the undertaking by D gives C the right to demand
immediate payment of the loan.
5. When debtor attempts to abscond
Example: Before the due date of the obligation, D changed his address
without informing C and with the intention of escaping from his
obligation. This act of D is a sign of bad faith which results in the loss
of his right to the benefit of the period stipulated. A mere attempt or
intent to abscond is sufficient.
