by Nil Jay V. Perolina
Chapter 3 - Different Kinds of Obligations
Article 1190.
When the conditions have for their purpose the extinguishment of an obligation to give, the parties, upon the fulfillment of said conditions, shall return to each other what they have received.
In case of the loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are laid down in the preceding article shall be applied to the party who is bound to return.
As for the obligations to do and not to do, the provisions of the second paragraph of article 1187 shall be observed as regards the effect of the extinguishment of the obligation. (1123)
What is article 1190 about?
It refers to the fulfillment of a resolutory condition.
What is the meaning of Article 1190?
Once a resolutory condition is fulfilled, the obligation is extinguished.
What is the reason behind the article?
When the resolutory condition happened, the obligation is considered as if it did not exist.
What are the types of obligations as to subject matter?
Real Obligation . The obligation to give
Personal Obligation . The obligation to do or not to do.
1ST PARAGRAPH DISCUSSION
When the conditions have for their purpose the extinguishment of an obligation to give, the parties, upon the fulfillment of said conditions, shall return to each other what they have received.
What are the types of conditions as to effect?
1. Suspensive – the happening of the condition give rise to the obligation.
2. Resolutory – the happening of the condition extinguishes the obligation.
What is the effect if the obligation does not exist?
The parties are bound to return or restore whatever they have received from each other which is what we call Reciprocal Restitution/Mutual Restitution
Illustrations/ Examples
Illustration 1
If the obligation states that A shall continue having possession over a particular car from B provided that she will not bet in the lottery and A bets in the lottery, her right to the possession of the car is extinguished. At the same time, the obligation of B to allow the A the possession of the car is extinguished also.
Illustration 2
X binds himself to lend his only car to Y until the latter passes the CPA Board. The obligation to lend is immediately demandable. Y’s right over the car is extinguished upon his passing the CPA board. Y is now obliged to return the car.
Illustration 3
C binds himself to lend his Civil Code codals to D until he finish his Persons and Family Relations Law then the obligation of C to lend D his codals is immediately demandable. But upon finishing the subject, D’s right over the codals is extinguished. D is now obliged to return the car.
2ND PARAGRAPH DISCUSSION
In case of the loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are laid down in the preceding article shall be applied to the party who is bound to return.
What is the meaning of the 2nd paragraph?
This refers to the condition or the state of the thing to be returned which means that in case of loss, deterioration and improvement, Article 1189 shall govern.
What are the types of losses in Civil Law?
A thing is deemed lost:
a. When it perishes; (Physical loss ex. House is burned/reduced to ashes)
b. When it goes out of commerce of man; (legal loss ex. Expropriation, legal thing becomes illegal) or
c. When it disappears in such a manner that its existence is unknown or it cannot be recovered (civil loss ex. Dog missing for sometime, ring drop in sea, property lost thru prescription)
3RD PARAGRAPH DISCUSSION
As for the obligations to do and not to do, the provisions of the second paragraph of article 1187 shall be observed as regards the effect of the extinguishment of the obligation. (1123)
What is the effect of resolutory condition in obligations to do and not to do?
In Art. 1187, Par. 2, it is stated that in obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of the condition that has been complied with.
Illustration/Example
In Donation Proper Nuptias, if the marriage does not happen, such donation should be returned to the donor.
Case Digest from Original Case
Citation:
Ong v. CA, 310 SCRA 1, July 6, 1999
Case Docket:
G.R. No. 97347
Date:
July 6, 1999
Petitioner:
JAIME G. ONG
Respondents:
THE HONORABLE COURT OF APPEALS, SPOUSES MIGUEL K. ROBLES and ALEJANDRO M. ROBLES
Ponente:
YNARES-SANTIAGO, J.
As cited in page 169, Article 1191 of Balane book
FACTS:
On May 10, 1983, petitioner Jaime Ong, on the one hand, and respondent spouses Miguel K. Robles and Alejandra Robles, on the other hand, executed an "Agreement of Purchase and Sale" respecting two parcels of land situated at Barrio Puri, San Antonio, Quezon. On May 15, 1983, petitioner Ong took possession of the subject parcels of land together with the piggery, building, ricemill, residential house and other improvements thereon.
Pursuant to the contract they executed, petitioner paid respondent spouses the sum of P103,499.91 by depositing it with the United Coconut Planters Bank. Subsequently, petitioner deposited sums of money with the Bank of Philippine Islands (BPI), in accordance with their stipulation that petitioner pay the loan of respondents with BPI.
To answer for his balance of P1,400,000.00 petitioner issued four (4) post-dated Metro Bank checks payable to respondent spouses in the amount of P350,0000.00 each, namely: Check No. 157708 dated June 15, 1983,Check No. 157709 dated September 15, 1983,Check No. 157710 dated December 15, 1983 and Check No. 157711 dated March 15, 1984. When presented for payment, however, the checks were dishonored due to insufficient funds.
Petitioner promised to replace the checks but failed to do so. To make matters worse, out of the P496,500.00 loan of respondent spouses with the Bank of the Philippine Islands, which petitioner, as per agreement, should have paid, petitioner only managed to dole out no more than P393,679.60. When the bank threatened to foreclose the respondent spouses' mortgage, they sold three transformers of the rice mill worth P51,411.00 to pay off their outstanding obligation with said bank, with the knowledge and conformity of petitioner.
ISSUES:
(1) Whether the contract entered into by the parties may be validly rescinded under Article 1191 of the New Civil Code; and
(2) Whether the parties had novated their original contract as to the time and manner of payment
RULING:
No, the contract is not rescissible. The non-fulfillment of the condition of full payment rendered the contract to sell ineffective and without force and effect. It must be stressed that the breach contemplated in Article 1191 of the New Civil Code is the obligor's failure to comply with an obligation.
Failure to pay, in this instance, is not even a breach but merely an event which prevents the vendor's obligation to convey title from acquiring binding force. Hence, the agreement of the parties in the case at bench may be set aside, but not because of a breach on the part of petitioner for failure to complete payment of the purchase price. Rather, his failure to do so brought about a situation which prevented the obligation of respondent spouses to convey title from acquiring an obligatory force.
Yes, contrary to petitioner's claim, records show that the parties never even intended to novate their previous agreement. It is true that petitioner paid respondents small sums of money amounting to P48,680.00, in contravention of the manner of payment stipulated in their contract.
These installments were, however, objected to by respondent spouses, and petitioner replied that these represented the interest of the principal amount which he owed them. Records further show that petitioner agreed to the sale of MERALCO transformers by private respondents to pay for the balance of their subsisting loan with the Bank of Philippine Islands.
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