OBLIGATIONS WITH A PERIOD: Article 1193 (3) CC: apartment) improves before the agreed-upon deadline

(January 1st) without the fault of the debtor (John), the creditor
Article 1193 (1) CC: “A day certain is understood to be that which must necessarily (Sarah) has the choice between enforcing the original
come, although it may not be known when.” obligation or keeping the improvement for the debtor's
"Obligations for whose fulfillment a day certain has been fixed, account, with appropriate compensation.
shall be demandable only when that day comes." (Article 1193 (3) states that a 'day certain' refers to a day that will
definitely come, even if the exact date is unknown.) 4. Choice for Sarah: Sarah now has a choice:
In simpler terms, this article specifies that obligations with a
specific due date are only enforceable or demandable on the In essence, it means that even if the specific date isn't - She can either enforce the original lease agreement and
date agreed upon. explicitly stated, as long as it's certain that the event or pay the agreed-upon rent of $1,000 per month.
deadline will occur at some point, it qualifies as a "day
Example: certain." - Alternatively, she can choose to keep the improved
apartment, but in this case, John would need to compensate
Let's say John agrees to pay Sarah $500 on February 1st. For example, if a contract states, "You must deliver the goods her for the increased value resulting from the renovations.
According to Article 1193 (1), Sarah cannot demand payment before the end of the week," the end of the week is considered
from John before February 1st. Even if Sarah wants the a day certain, even though the exact date might not be If Sarah decides to keep the improved apartment, requiring
money earlier, she cannot legally enforce the obligation until specified. John to compensate her for the increased value ensures that
the specified date. she is not disadvantaged by the improvements made by John.
MORATORIUM LAW: It maintains fairness in the transaction by accounting for the
Article 1193 (2) CC: change in the apartment's value.
A moratorium law is a rule that temporarily stops or delays
"Obligations with a resolutory period take effect at once, but certain financial obligations or legal actions. It's often used So, while it might initially seem unfair for John to compensate
terminate upon arrival of the day certain." during tough times, like economic downturns or emergencies, Sarah for improvements he made, Article 1189 seeks to
to give people and businesses a break from paying debts or ensure fairness and equity between the parties involved in the
In simpler terms, this article deals with obligations that are facing consequences like evictions or foreclosures. These agreement, even when circumstances change.
subject to a resolutory period, which means that they are laws can be made by governments and can cover things like
effective immediately but will be terminated or resolved upon rent, mortgage payments, or court deadlines. They're meant ARTICLE 1189 CC:
the arrival of a specified date. to help those struggling financially, but they can also affect
creditors and might be challenged in court. CREDI DEBTOR EFFECT
Example: TOR
Article 1194 CC:
Let's say John sells a piece of artwork to Sarah with the
ART 1189(1) W/O OBLI EXTINGUISHED
condition that if Sarah fails to pay the full purchase price within “In case of loss, deterioration or improvement of the thing THING IS LOST FAULT
90 days, the sale will be automatically canceled. In this before the arrival of the day certain, the rules in Article 1189
scenario: shall be observed. (n)” Specific/determin
1. The obligation (the sale of the artwork) takes effect ate things
Example:
immediately upon agreement between John and Sarah.
“generic”-money-
Let's say John rents out his apartment to Sarah for $1,000 per
2. However, the obligation will be terminated or resolved upon month, with the lease term starting on January 1st. However,
the arrival of the specified date, which is the end of the 90-day before the lease term begins, John renovates the apartment,
period. ART 1189(2) W/ DEBTOR PAYS
adding new fixtures, appliances, and improving the overall
THING IS LOST DAMAGES
condition. As a result of these renovations, the apartment's
3. If Sarah pays the full purchase price within the 90 days, the ART 1189(3) W/O BORNE BY THE
market value increases.
sale will be completed, and John will transfer ownership of the THING CREDITOR
artwork to Sarah. But if Sarah fails to pay within the specified In this scenario: DETERIORATES
period, the sale will be automatically canceled, and John will ART 1188(4) W/ CREDITOR CHOOSE
retain ownership of the artwork. 1. Original Agreement: The original agreement between John THING 1. RESCISSION
and Sarah was for Sarah to rent the apartment for $1,000 per DETERIORATES 2. FULFILLMENT (Art
This example demonstrates how obligations with a resolutory month, starting on January 1st. 1191)
period take effect immediately but are subject to termination
or resolution upon the arrival of a specified date or fulfillment 2. Improvement of the Apartment: Before the lease term WITH DAMAGES IN
of a condition. begins, the apartment undergoes renovations, improving its EITHER CASE
overall condition and increasing its market value. ART 1189(5) INURE TO CREDITOR
THING IS
3. Legal Principle (Article 1189): According to Article 1189 of IMPROVED
the Civil Code, if the object of the obligation (in this case, the
 1. NATURE (In obligations where a period is set, it is presumed to be for the circumstances surrounding it, it's implied that the goods
2. TIME benefit of both the creditor and the debtor unless it's clear from the should be delivered within a reasonable time frame.
wording of the agreement or other circumstances that the period
ART 1189(6) AT HIS HE SHALL HAVE NO was set in favor of one party.) In this scenario:
THING IS EXPENSE OTHER RIGHT THAN
1. Nature of the Obligation: Delivering goods typically implies
IMPROVED THAT GRANTED TO Example:
THE USUFRUCTUARY a need for timely delivery to fulfill the purpose of the
John borrows $1,000 from Sarah, and they agree that John agreement.
will repay the loan in six months, with the deadline set for July
2. Circumstances: The urgency of Sarah's need for the goods,
ARTICLE 1195 CC: 1st.
industry standards for delivery times, and any verbal
"Anything paid or delivered before the arrival of the period, the In this scenario: agreements or common practices in their business
obligor being unaware of the period or believing that the relationship could all be considered circumstances indicating
obligation has become due and demandable, may be 1. Benefit for Both Parties: Initially, it's presumed that the that a deadline was intended.
recovered, with the fruits and interests." deadline of July 1st benefits both John (the debtor) and Sarah
(the creditor). John has time to repay the loan, and Sarah 3. Court Intervention: If a dispute arises regarding the timing
Example: knows when to expect repayment. of delivery and it's clear that a reasonable period for delivery
was intended but not specified, the courts may step in to
Let's say John owes Sarah $500 for services rendered, with 2. Presumption: Article 1196 states that deadlines are determine a suitable deadline.
the payment due on January 1st. However, John mistakenly generally assumed to benefit both parties unless there's
believes that the payment is due on December 1st. As a result, evidence suggesting otherwise. 4. Outcome: The court may consider factors such as the
he pays Sarah the $500 on December 1st, one month before distance of the shipment, typical delivery times in the industry,
it's actually due. 3. Evidence of Favoritism: However, let's say that in their and any specific agreements or expectations between John
agreement, it's explicitly stated that if John repays the loan and Sarah to establish a reasonable deadline for delivery.
In this scenario: before June 1st, he gets a 10% discount on the total amount
owed. In this case, it becomes clear that the deadline of July In this way, Article 1197 (1) allows courts to ensure that
1. Mistaken Payment: John pays Sarah the $500 one month 1st was set in favor of Sarah (the creditor), as it gives her more obligations are fulfilled within a reasonable time frame, even
earlier than the actual due date because he believes the time to receive full repayment without the debtor (John) when a specific deadline wasn't explicitly stated in the
obligation is already due and demandable. benefiting from the discount. agreement.

2. Article 1195: According to Article 1195, since John made the 4. Effect: Despite the initial presumption of mutual benefit, the ARTICLE 1197 (2) CC:
payment before the actual due date and was unaware of the terms of the agreement demonstrate that the deadline was
correct deadline, he has the right to recover the $500 he paid “The courts shall also fix the duration of the period when it
actually established in favor of Sarah. Therefore, John cannot
to Sarah, along with any benefits or interest it may have depends upon the will of the debtor.”
claim the benefit of the discount by repaying the loan before
earned. June 1st. Example:
3. Recovery: John can request Sarah to return the $500 he This example shows how Article 1196 operates by presuming Let's say John owes Sarah $1,000, and the agreement states
mistakenly paid her on December 1st. Additionally, if any mutual benefit unless the terms of the agreement or other that John can choose to repay the debt at any time within the
interest or benefits were accrued on that amount during the circumstances indicate otherwise. next six months. In this scenario, the timing of repayment
period it was held by Sarah, John is entitled to recover those
depends entirely on John's will; he has the freedom to decide
as well. ARTICLE 1197 (1) CC:
when to repay the debt within the specified period.
This example demonstrates how Article 1195 protects “If the obligation does not fix a period, but from its nature and
In this case:
individuals who make payments or fulfill obligations earlier the circumstances it can be inferred that a period was
than required due to a misunderstanding of the deadline. It intended, the courts may fix the duration thereof.” 1. Debtor's Will: The timing of fulfilling the obligation
allows them to recover what they paid or delivered, along with (repayment of the debt) depends on John's choice.
any benefits or interest it may have earned. (When an obligation doesn't have a set deadline, but it seems like a
deadline was meant based on the nature of the obligation and the 2. Court Intervention: If Sarah believes that John is delaying
ARTICLE 1196 CC: situation, the courts can decide on a reasonable deadline.) repayment unreasonably or if a dispute arises regarding the
timing of repayment, she can seek intervention from the
“GR: Whenever in an obligation a period is designated, it is Example: courts.
presumed to have been established for the benefit of both the
creditor and the debtor, (E) unless from the tenor of the same Let's say John agrees to deliver a shipment of goods to Sarah, 3. Determining the Deadline: The courts would examine the
or other circumstances it should appear that the period has but their contract doesn't specify a deadline for delivery. circumstances and consider factors such as the nature of the
been established in favor of one or of the other.” However, based on the nature of the transaction and the debt, industry standards, and the parties' intentions to
determine a reasonable deadline for repayment.
4. Outcome: Based on their assessment, the courts may sets the deadline, it becomes binding, and neither party can 3. Guarantee or Security: To regain the right to request
establish a deadline within the six-month period by which change it. extensions or grace periods for repayment, John could offer a
John must repay the debt. This ensures that John fulfills his guarantee or security for the debt. This could involve providing
obligation within a reasonable time frame, even though the ARTICLE 1198 CC: collateral or finding a guarantor who promises to repay the
timing depends on his will. debt if John defaults.
“The debtor shall lose every right to make use of the period.”
In this example, Article 1197 (2) allows the courts to intervene 4. Consequences: If John cannot provide a guarantee or
and set a deadline for fulfilling the obligation when the timing Example: security for the debt, he loses the ability to request additional
is contingent upon the debtor's choice. time for repayment. Sarah may then take legal action to
Let's say John owes Sarah $500, with the repayment deadline
recover the owed amount, potentially leading to further
ARTICLE 1197 (3) CC: set for June 1st. However, John fails to repay the debt by the
financial consequences for John
agreed-upon deadline.
“In every case, the courts shall determine such period as may In summary, Article 1198 (1) highlights the consequences for
under the circumstances have been probably contemplated 1. Missed Deadline: June 1st passes, and John hasn't repaid
debtors who become insolvent after agreeing to an obligation.
by the parties. Once fixed by the courts, the period cannot be the $500 to Sarah.
It emphasizes the importance of providing guarantees or
changed by them.” security for debts to retain the right to request extensions or
2. Loss of Rights: According to Article 1198, because John
didn't fulfill his obligation within the specified period, he loses grace periods for repayment in such situations.
Example:
any right to request additional time or extensions for
ARTICLE 1198 (2) CC:
John and Sarah enter into a contract for the construction of a repayment.
house. The contract states that John, the contractor, will “When he does not furnish to the creditor the guaranties or
complete the construction within a "reasonable time." 3. Consequences: John cannot request extra time to repay
securities which he has promised.”
However, the contract does not specify a specific deadline for the debt or ask for an extension of the deadline. He's now
completion. liable for failing to fulfill his obligation within the agreed-upon Example:
timeframe.
In this scenario: Let's say John borrows $5,000 from Sarah to purchase a car.
This example demonstrates how Article 1198 operates by As part of their agreement, John promises to provide Sarah
1. Ambiguity in the Contract: The term "reasonable time" is emphasizing the importance of meeting obligations within the with his valuable watch as collateral for the loan. They also
subjective and open to interpretation. It doesn't provide a clear specified period and the consequences of failing to do so. agree that John will repay the loan within six months, with the
deadline for completion of the construction project. Once the deadline passes without fulfillment, the debtor loses deadline set for June 1st.
the right to request any additional time.
2. Court Intervention: If a dispute arises between John and In this scenario:
Sarah regarding the timing of completion, Sarah can bring the ARTICLE 1198 (1) CC:
matter to court to determine a reasonable deadline. 1. Promise of Collateral: John agrees to provide his valuable
“When after the obligation has been contracted, he becomes watch as collateral to Sarah to secure the loan.
3. Determining a Reasonable Period: The court will examine insolvent, unless he gives a guaranty or security for the debt.”
the circumstances, such as the size and complexity of the 2. Deadline for Repayment: The deadline for repayment is set
construction project, industry standards, and any verbal Example: for June 1st, with John expected to repay the loan by this date.
agreements or communications between John and Sarah, to
Let's say John borrows $1,000 from Sarah to start a small 3. Failure to Provide Collateral: However, as the repayment
determine what deadline would have been contemplated by
business. They agree that John will repay the loan within six deadline approaches, John fails to provide Sarah with his
the parties.
months, with the deadline set for June 1st. However, a few watch as promised. He does not furnish the agreed-upon
4. Fixed Deadline: Once the court determines a reasonable months into the agreement, John's business encounters collateral to secure the loan.
period for completion, it becomes the fixed deadline for John financial difficulties, and he becomes insolvent.
to finish the construction project. 4. Loss of Rights: According to Article 1198 (2), since John did
In this scenario: not provide the guarantees or securities (his watch) that he
For instance, based on the evidence presented, the court may promised to Sarah, he loses the right to request extensions or
1. Insolvency: John's business fails, and he is unable to repay
decide that a reasonable period for completing the grace periods for repayment.
his debts, including the $1,000 loan from Sarah.
construction project is six months. Therefore, the court would
set a deadline of six months from the start of the project for 5. Consequences: Without providing the promised collateral,
2. Loss of Rights: According to Article 1198 (1), since John
John to complete the construction. John cannot request additional time for repayment, even if he
became insolvent after agreeing to the loan obligation, he
faces financial difficulties. Sarah may then take legal action to
loses the right to request any extensions or grace periods for
In this example, Article 1197 (3) allows the court to intervene recover the owed amount, and John may face further
repayment unless he provides a guarantee or security for the
and establish a deadline when the contract is ambiguous or consequences for failing to fulfill his obligation.
debt.
lacks a specific timeframe for performance. Once the court
In summary, Article 1198 (2) emphasizes the importance of ARTICLE 1198 (4) CC: ARTICLE 1198 (5) CC:
debtors fulfilling their promises to provide guarantees or
securities to creditors. Failure to do so results in the loss of “When the debtor violates any undertaking, in consideration “When the debtor attempts to abscond.”
the right to request extensions or grace periods for of which the creditor agreed to the period.”
repayment. Example:
Example:
ARTICLE 1198 (3) CC: John owes Sarah $10,000 as part of a loan agreement. They
John borrows $5,000 from Sarah to fund a home renovation agree that John will repay the loan within six months, with the
“When by his own acts he has impaired said guaranties or project. As part of their agreement, John promises Sarah that deadline set for June 1st. However, as the deadline
securities after their establishment, and when through a he will use the loan exclusively for renovating his house, as approaches, John attempts to flee the country to avoid his
fortuitous event they disappear, unless he immediately gives Sarah is particularly interested in seeing her investment used debt obligations.
new ones equally satisfactory.” for this purpose. They agree that John will repay the loan
within six months, with the deadline set for June 1st. In this scenario:
Example:
In this scenario: 1. Attempt to Abscond: John, the debtor, tries to escape his
Let's consider John, who borrows $10,000 from Sarah to start responsibilities by attempting to leave the country before
a business. As part of their agreement, John provides his 1. Undertaking: John agrees to use the loan exclusively for repaying the loan to Sarah.
valuable artwork as collateral for the loan. They also agree renovating his house, as per Sarah's request. This promise is
that John will repay the loan within six months, with the a crucial part of their agreement, and Sarah agrees to the 2. Loss of Rights: According to Article 1198 (5), since John
deadline set for June 1st. repayment period based on John's commitment to this tries to abscond, he loses the right to request extensions or
undertaking. grace periods for repayment.
In this scenario:
2. Deadline for Repayment: The deadline for repayment is set 3. Consequences: Due to John's attempt to evade his
1. Providing Collateral: John offers his valuable artwork as for June 1st, with John expected to repay the loan by this date. obligations, he cannot request additional time for repayment,
collateral to secure the loan from Sarah. even if he faces financial difficulties. Sarah may then take
3. Violation of Undertaking: However, as the renovation legal action to recover the owed amount, and John may face
2. Deadline for Repayment: The deadline for repayment is set progresses, John decides to use a portion of the loan for further consequences for trying to escape his debt.
for June 1st, with John expected to repay the loan by this date. personal expenses unrelated to the renovation, in violation of
his agreement with Sarah. In summary, Article 1198 (5) underscores that debtors who
3. Impairment of Collateral: However, a few months into the attempt to abscond or flee from their obligations forfeit the
agreement, John decides to sell the artwork without informing 4. Loss of Rights: According to Article 1198 (4), since John right to request extensions or grace periods for repayment. It
Sarah. By doing so, he impairs the collateral he provided for breaches the agreement (undertaking) that was the reason emphasizes the importance of fulfilling debt obligations and
the loan. Sarah agreed to the repayment period, John loses the right to facing them responsibly rather than trying to evade them.
request extensions or grace periods for repayment.
4. Loss of Rights: According to Article 1198 (3), since John has
undermined the guarantee (the artwork) he provided after its 5. Consequences: Due to John's actions, he cannot request
establishment, he loses the right to request extensions or additional time for repayment, even if he faces financial
grace periods for repayment. difficulties. Sarah may then take legal action to recover the
owed amount.
5. Consequences: Due to John's actions, he cannot request
additional time for repayment, even if he encounters financial In summary, Article 1198 (4) emphasizes the importance of
difficulties. Sarah may then take legal action to recover the debtors fulfilling their agreements or undertakings that were
owed amount. However, if John immediately provides equally the basis for the creditor agreeing to a specific repayment
satisfactory replacement collateral, he may regain the right to period. Failure to do so results in the loss of the right to
request extensions or grace periods for repayment. request extensions or grace periods for repayment.

In summary, Article 1198 (3) highlights the importance of

debtors maintaining the integrity of the guarantees or
securities they provide. Failure to do so results in the loss of
the right to request extensions or grace periods for
repayment, unless equally satisfactory replacements are
promptly provided.