STUDY GUIDE: Arts.

1193-1198 (Obligations with a Period)

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CHAPTER 3, Section 2
Obligations with a Period
(Arts. 1193-1198)

1. Meaning of an obligation with a period. – It is an

obligation the performance of which depends upon the
arrival of a period or term. (Art. 1193)

Example : I will give you P100,000.00 on 30

June 2021.
obligation
period

2. A period distinguished from a condition. – A

period is a future and certain event, while a condition is a
future and uncertain event.

 Examine the example in No. 1 above. 30 June

2021 is considered a period because it refers to an event
which is both in the future and which is certain, i.e., a day
certain which must necessarily come.

 Article 1193, par. 3, however, states that a

period can also refer to a day certain which must
necessarily come although it may not be known when. In
other words, if we are sure that an event will surely

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happen, except that we just do not know the exact day

when it will happen, the event is still considered a period.

Example No. 1: I will give you P100,000.00, if your father

will die.
obligation
period

“If your father will die” is an example of a period

because it is a future event and at the same time a certain
event. The death of a person is a certain event. What is
uncertain only is the day when it will come, but it is sure to
come.

Example No. 2: I will give you P100,000.00, if your father will die
on 30 June 2021.
obligation condition

“If your father will die on 30 June 2021” is an example

of a condition, because it is a future event and at the same
time uncertain. While the death of a person is a certain
event, the event itself becomes uncertain when a date is
specified for the happening of the event. Thus, it is certain
that your father will die. But it becomes uncertain
whether he will really die on 30 June 2021.

3. Article 1193 also distinguishes between the two

kinds of period or term according to effect:

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(A) Suspensive Period - An obligation with a suspensive

period arises or becomes demandable only upon
arrival of the period. (Art. 1193, par. 1)

Example: I will deliver to you my car six

months from now.
obligation
suspensive period

If this promise is made on 30 June 2020, the

debtor’s obligation to deliver the car will become
demandable only on 27 December 2020.

(B) Resolutory Period - An obligation with a resolutory

period becomes demandable at once, but terminates
or is extinguished only upon arrival of the period.
(Art. 1193, par. 2)

Example: I will lend you my car for two years.

obligation resolutory period

If this promise is made on 30 June 2019, the debtor

will immediately deliver the car to the creditor on that
same day. The creditor can use the car for two years until
30 June 2021, when the creditor will be obliged to return
the car back to the debtor. In this case, the arrival of the
period, 30 June 2021, has the effect of terminating or
extinguishing the debtor’s obligation to the creditor.
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4. ART. 1194. – In a specific real obligation subject to

a suspensive period, if there is loss, deterioration or
improvement of the thing to be delivered before the
arrival of the period, the rules previously studied in Article
1189 will also apply.

 Review the rules under Article 1189.

5. ART. 1195. – Premature payment (payment before

the arrival of the period) by mistake.

 It is always presumed that the debtor is aware

of the period for his obligation. Hence, if he pays
prematurely, he can no longer recover from the creditor
what he has paid.

 However, if the debtor pays prematurely, and

he is able to prove at the same time that:

(a) he was unaware of the period; or

(b) he believed that the obligation has become due and
demandable;

the debtor can recover from the creditor what he has paid,
plus fruits and interest.

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 Example: On 1 January 2019, D signed a promissory

note in favor of C which states, “I promise to pay C the
amount of P100,000.00 on 1 January 2021 plus 10% annual
interest in the amount of P10,000.00.”

 On maturity date, 1 January 2021, D will be liable

to pay C the amount of P100,000.00 plus P20,000.00
(computed interest for two years), or a total of
P120,000.00.

 Let us assume that D mistakenly believed that his

obligation was already due on 1 January 2020. He then
paid C the total amount of P120,000.00. On 2 February
2020, however, D found out that his obligation was not
actually due until 1 January 2021.

Question: Can D recover what he paid to C on 1 January

2020? If yes, how much?

Answer: It is clear from the facts that D here made an

erroneous payment on 1 January 2020, or one year earlier
than the due date of his obligation. Hence, he can still
recover his payment because C has no right to demand
payment earlier than the period specified in the obligation
which is 1 January 2021. The amount, however, that D can
recover from C on 2 February 2020 is not the entire
P120,000.00 paid but only P110,000.00 – that is, the
P100,000.00 principal plus the P10,000.00 interest for the
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year 2020 which is not yet due. The P10,000.00 interest

for the year 2019 is already due as of 31 December 2019
and can therefore no longer be recovered. On 1 January
2021, C can already demand from D payment of the
principal debt (P100,000.00) plus the remaining 10%
interest for the year 2020 (P10,000.00).

 This provision is based on solutio indebiti, i.e,

the creditor cannot unjustly enrich himself by collecting
payment even if it is not yet due. Hence, if the creditor
collects payment from the debtor before the debt is due,
the creditor is obliged to return it. Collection will have to
be made again when the debt matures or becomes due.

6. ART. 1196. - When a period is specified for the

performance of the obligation, it is presumed that the
period is established for the benefit of BOTH the debtor
and the creditor. The exception only is when the
obligation specifies that the period is established for the
benefit of either the debtor or the creditor only.

(A) Effect when the period in an obligation is

established for the benefit of BOTH the DEBTOR and the
CREDITOR –

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(A.1.) The debtor cannot make premature payment

to the creditor. The creditor has the right to refuse the
payment if the debtor pays prematurely.

(A.2.) The creditor cannot collect prematurely. The

creditor cannot compel the debtor to pay before the
maturity date.

 Example: On 1 January 2020, D borrowed

P100,000.00 from C due on 31 December 2020 plus 10%
interest. D cannot pay and compel C to accept payment
before 31 December 2020. Neither can C demand
payment, and compel D to pay before 31 December 2020.

Reason: It is presumed that both parties will benefit from

the period designated in the obligation. D is benefited
because he can use the money for one year. C is also
benefited because of the interest the money would earn
for one year.

Question: What if D offers to pay his obligation on 30 June

2020, plus interest corresponding to one year, does C have
the right to refuse payment?

Answer: C cannot refuse payment because if the interest

for one year was to be paid by D, C would not be losing his
benefit under the obligation despite premature payment
by the debtor D.

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(B) Effect when the period in an obligation is

established for the benefit of the DEBTOR ONLY –

(B.1.) The debtor can make premature payment to

the creditor, and can legally compel the creditor to accept
payment before the due date of the obligation. However,
the creditor cannot demand premature payment from the
debtor, and cannot legally compel the debtor to pay
before the due date of the obligation if the debtor refuses
to pay.

 Example: On 1 January 2020, D borrowed

P100,000.00 from C due on or before 31 December 2020
without interest. D may pay C the P100,000.00 at any time
before 31 December 2020 if D wants, and can legally
compel the creditor to accept his payment. However, C
cannot compel D to pay before 31 December 2020 if D
does not want to make the payment yet.

(C) Effect when the period in an obligation is

established for the benefit of the CREDITOR ONLY –

(C.1.) The creditor can demand premature payment

from the debtor, and can legally compel the debtor to pay
before maturity date of the obligation. However, the
debtor cannot make premature payment to the creditor,
and cannot legally compel the creditor to accept his

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payment before the maturity date of the obligation if the

creditor refuses to accept his payment.

 Example: On 1 January 2020, D borrowed

P100,000.00 from C due on 31 December 2020, or upon
demand by C. D cannot compel C to accept payment on
30 June 2020, if C does not want to accept payment yet.
However, C may demand from D payment of the
P100,000.00 at any time before 31 December 2020, and D
cannot refuse to pay if the demand is made by C.

7. ART. 1197. – The general rule is that if the

obligation does not fix a period and no period is intended
by the parties, the courts are not authorized to fix a period
for the parties. Under Article 1197, there are, however,
two (2) instances when the courts are authorized to fix the
period for the parties:

(A) When no period is fixed by the parties in an

obligation, but a period was really intended for the
performance of the obligation. (Article 1197, par. 1)

 Example: D agreed to construct the house of C. The

parties failed to fix the period within which the
construction is to be finished. It has been two years now
but still D has not finished constructing the house which by
its area should have been finished in 14 months. C can go
to court, and ask the court to fix a period. Here, the court
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can fix the term for it is obvious that the parties intended
that D should construct the house within a certain period.
The court will then state: “D is given until 15 December
2020 within which to finish the construction.” If D does
not finish the construction until 15 December 2019, D will
already be considered in legal delay, and will now be liable
for damages.
(B) When the period depends upon the will of
the debtor. (Article 1197, par. 2)

 An example of this is Article 1180 which states

that, “(W)hen the debtor binds himself to pay when his
means permit him to do so, the obligation shall be deemed
to be one with a period, subject to the provisions of article
1197.”

 Example: On 1 January 2018, D promised to pay C

P100,000.00 if he has the money. This is an obligation
with a period, and the period depends on the sole will of
the debtor. After more than two years, or on 30 August
2020, C went to D to collect the debt but D still insists that
he does not have the money yet to pay C.

Question: What is the remedy of C?

Answer: C can go to court, but he cannot file an action for

specific performance as yet because there is no period
fixed for the performance of the obligation. For the same
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reason, D cannot be considered in legal delay. What C can

do is ask the court first to fix a period. Then the court will
then state: “D is given until 15 January 2021 within which
to pay his P100,000.00 obligation to C.” If on 15 January
2021 D still fails to pay his debt to C, it is only this time that
C will have the right to file an action for specific
performance against D, and to claim for damages by
reason of legal delay on the part of D.

8. ART. 1198. - The general rule is that when a period

is fixed in an obligation, the creditor cannot demand the
performance of the obligation before the designated
period. Article 1198, however, provides for the
exceptions. In other words, the creditor may demand
premature payment in the following instances enumerated
under Article 1198:

(A) When the debtor becomes insolvent, unless

he gives a guaranty or security for the debt. (Note: The
insolvency in this case need not be judicially declared.)

 Example: On 15 January 2020, Arjo borrowed

P500,000.00 from Sylvia due and payable on 15 January
2021. On 5 June 2020, Sylvia learned of the insolvency of
Arjo. In this case, Sylvia can already demand for the
payment of Arjo’s P500,000.00 debt as of 5 June 2020

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without waiting for 15 January 2021, unless Arjo gives a

guaranty or security for the debt.

(B) When the debtor does not give to the

creditor the guaranty or security he promised.

 Example: On 15 July 2020, Marissa borrowed

money from Gilbert in the amount of P300,000.00 due for
payment on 15 January 2020. she likewise obliged herself
to deliver to Gilbert, not later than 30July 2020, her
Omega wrist watch to serve as security for the obligation.
If Marissa fails to deliver her Omega wrist watch as
promised, Gilbert can already demand for the payment of
her P300,000.00 obligation on 30 July 2020, or at any time
thereafter before the stipulated maturity date on 15
January 2020.

(C) When the guaranty or security given have

been impaired due to the debtor’s fault, or have
disappeared because of a fortuitous event; unless the
debtor immediately gives a new guaranty or security which
is equally satisfactory.

 Example: In a promissory note dated 15 January

2020 signed by Ramil in favor of Renalyn, he promised to
pay his P500,000.00 debt to her on 15 January 2021. To
secure the obligation, he delivered and pledged his Rolex
watch worth P650,000.00 to Renalyn. On 3 August 2020,
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three armed men forced their entry into Renalyn’s home

and took with them her entire vault where all jewelries
and other valuable were kept, including the Rolex watch of
Ramil. Under the facts, do you think Renalyn can compel
Ramil to pay his P500,000.00 debt even before maturity
date because the security given has been lost? (Please
post your answer in your Class GC.)
(D) When the debtor violates any promise
made to the creditor, and the promise was the reason why
the creditor agreed to the period.

 Example: Sasha loans P100,000.00 to Gaby

payable six months thereafter provided that Gaby will
paint the kitchen of Sasha within two weeks. If Gaby fails
or refuses to paint the kitchen of Sasha within the two
weeks agreed upon, Sasha can demand at once the
payment of the P100,000.00 even before maturity date.
This is because Gaby has violated the undertaking which
was the consideration why Sasha agreed to extend to him
the loan.

(E) When the debtor attempts to abscond.

 Example: On 15 June 2020, Jessie borrowed

P800,000.00 from Monna payable on 30 January 2021. On
2 December 2020, Monna could not contact Jessie. He
seemed to have changed his mobile number without
notifying Monna of his new contact number. When
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Monna visited his last known address, she found out that
Jessie had changed his address without informing her of
his new one. Under the facts, it becomes apparent that
Jessie has the intention of evading the payment of his
obligation to Monna. Hence, Monna can immediately take
steps to collect on her credit without waiting for the
maturity date of the obligation.
HAPPY READING & LEARNING! 

SOURCES of NOTES:

The discussions outlined in this lecture have

been collectively lifted from the cases cited
and commentaries made by the authors in
the following references, to wit:

1. Alconera, Virgilio P. Obligations and Contracts.

Quezon City: Central Book Supply, Inc.; 2009.

2. Aquino, David Robert C., Cruz, Aristeo R. Obligations

and Contracts. Quezon City: Central Book Supply, Inc.;
2016.

3. Aralar, Reynaldo B. Obligations and Contracts Law

and Jurisprudence. Mandaluyong: National Book
Store; 2008.

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4. Austria, Salvador E., Aquino, Timoteo B.

Fundamentals of Obligations and Contracts. Quezon
City: Central Book Supply, Inc.; 2009.

5. De Leon, Hector S., De Leon, Hector M. Jr. The Law on

Obligations and Contracts. Manila: Rex Book Store;
2011.

6. Jurado, Desiderio P. Comments and Jurisprudence on

Obligations and Contracts. Manila: Rex Book Store;
2010.

7. Pineda, Ernesto. Obligations and Contracts. Quezon

City: Central Book Supply, Inc.; 2009.

8. Saguinsin, Artemio T. Elements of Obligations and

Contracts. Mandaluyong: National Book Store; 2009.

9. Soriano, Fidelito R. Obligations and Contracts (Law

and Application). Manila: GIC Enterprises & Co., Inc.;
2011.

10. Suarez, Carlos B., Suarez, Alexander Q. The Law on

Obligations and Contracts. Manila: GIC Enterprises &
Co., Inc.; 2011.

11. Torres, Justo P. Jr. Obligations and Contracts. Manila:

Rex Book Store; 2003.

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12. Ulep, Mauricio. A Bar Oriented Approach to the Law

on Obligations and Contracts. Quezon City: Central
Book Supply, Inc.; 2016.

Prepared by:

Atty. Harriet B. Reyes Linsangan

16 March 2021

FOOD FOR THOUGHT

“Self-discipline is the only power which can keep you energized

even in the toughest of the circumstances.”
Sukant Ratnakar

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