Art. 1181.Art. 1181. In conditional obligations, the In conditional obligations, the acquisition of rights, as well as the acquisition of rights, as well as the extinguishment or loss of those already extinguishment or loss of those already acquired, shall depend upon the acquired, shall depend upon the happening of the event which constitutes happening of the event which constitutes the condition.the condition.

Kinds of Conditional ObligationsKinds of Conditional Obligations

Suspensive Conditions-Suspensive Conditions- the the happening of which will give rise to happening of which will give rise to the acquisition of a right.the acquisition of a right.

Resolutory Conditions-Resolutory Conditions- the rights the rights already acquired are lost once the already acquired are lost once the condition is fulfilled.condition is fulfilled.

Effect of the happening of condition.Effect of the happening of condition.

1.) Acquisition of rights-1.) Acquisition of rights- This type of This type of obligation has a condition obligation has a condition subordinate to the happening of a subordinate to the happening of a future and uncertain event; so that if future and uncertain event; so that if the suspensive condition does not the suspensive condition does not take place, the parties would stand take place, the parties would stand as if the conditional obligation had as if the conditional obligation had NEVER existed.NEVER existed.

Example:Example:

T, testator, in his last will and testament T, testator, in his last will and testament gave some property to H (heir) provided gave some property to H (heir) provided T would die within two (2) years.T would die within two (2) years.

In this case, H would acquire a right to the In this case, H would acquire a right to the land only upon the happening of the land only upon the happening of the suspensive condition: the death of T suspensive condition: the death of T within 2 years. (If there is no length of within 2 years. (If there is no length of time within which the death must take time within which the death must take place, the obligation is one with a place, the obligation is one with a period.)period.)

2.) Loss of rights already acquired-2.) Loss of rights already acquired- In In obligations subject to a resolutory obligations subject to a resolutory condition, the happening of the event condition, the happening of the event which constitutes the condition which constitutes the condition produces the extinguishment or loss of produces the extinguishment or loss of rights already acquired.rights already acquired.

ExampleExample

1.) X binds himself to support Y until 1.) X binds himself to support Y until Y graduates from college. Here, the Y graduates from college. Here, the right already acquired by Y which is right already acquired by Y which is the right to receive support shall be the right to receive support shall be extinguished or lost once the extinguished or lost once the condition is fulfilled. condition is fulfilled.

Art. 1182.Art. 1182. When the fulfillment of the When the fulfillment of the condition depends upon the sole will of condition depends upon the sole will of the debtor, the conditional obligation the debtor, the conditional obligation shall be void. If it depends upon chance shall be void. If it depends upon chance or upon the will of a third person, the or upon the will of a third person, the obligation shall take effect in conformity obligation shall take effect in conformity with the provisions of this Code. (1115) with the provisions of this Code. (1115)

Potestative- depends on the Potestative- depends on the exclusive will of one of the parties.exclusive will of one of the parties.

Casual- depends on chance or upon Casual- depends on chance or upon the will of a third person. VALIDthe will of a third person. VALID

Mixed Conditions- depends partly Mixed Conditions- depends partly upon chance and partly upon the will upon chance and partly upon the will of a third person. VALIDof a third person. VALID

Potestative, Casual and Mixed Conditions

ExampleExample POTESTATIVE:POTESTATIVE:

(a) Potestative on the part of the DEBTOR:(a) Potestative on the part of the DEBTOR:(1.) if also (1.) if also suspensive-suspensive- both the condition and the obligation both the condition and the obligation are VOID, for the obligation is really illusory.are VOID, for the obligation is really illusory.eg.eg.I will pay you after I receive a loan from a bank. (Berg vs. I will pay you after I receive a loan from a bank. (Berg vs. Magdalena Estate, Inc. 92 Phil 110, 1953)Magdalena Estate, Inc. 92 Phil 110, 1953)

• It is only applicable to an obligation which depends for its It is only applicable to an obligation which depends for its perfection upon a condition which is potestative to the debtor perfection upon a condition which is potestative to the debtor and NOT to a PRE-EXISTING obligation.and NOT to a PRE-EXISTING obligation.eg.eg.B binds himself to pay a previous indebtedness of P2,000 to C B binds himself to pay a previous indebtedness of P2,000 to C (creditor) by the end of December provided that he is in the (creditor) by the end of December provided that he is in the mood to do so.mood to do so.

- Though the condition is VOID on the ground that its fulfillment - Though the condition is VOID on the ground that its fulfillment depends exclusively upon the will of the debtor, the depends exclusively upon the will of the debtor, the OBLIGATION itself is NOT VOID since it refers to a pre-existing OBLIGATION itself is NOT VOID since it refers to a pre-existing indebtedness. indebtedness.

(2.) if also (2.) if also resolutory-resolutory- VALID VALID

EXAMPLEEXAMPLE(b.) Potestative on the part of the CREDITOR-(b.) Potestative on the part of the CREDITOR-

VALIDVALID

I will pay you my indebtedness upon your I will pay you my indebtedness upon your demand.demand.

• The obligation The obligation does not become illusorydoes not become illusory. . For it isFor it is normal normal, that the creditor is , that the creditor is interested in the fulfillment of the interested in the fulfillment of the obligation because it is for his benefit. obligation because it is for his benefit. Thus, it is up to him whether to enforce his Thus, it is up to him whether to enforce his right or not.right or not.

EXAMPLEEXAMPLE

• CASUAL CONDITION:CASUAL CONDITION:Where S binds himself to sell his land to F Where S binds himself to sell his land to F

if he wins a case which is pending before the if he wins a case which is pending before the Supreme Court.Supreme Court.

• MIXED CONDITION:MIXED CONDITION:Where X, building contractor,obliges Where X, building contractor,obliges

himself in favor of Y, owner, to repair at X’s himself in favor of Y, owner, to repair at X’s expense, any damage to the building taking expense, any damage to the building taking place after an earthquake if found by a panel of place after an earthquake if found by a panel of arbitrators that construction defects arbitrators that construction defects contributed in any way to the damage.contributed in any way to the damage.

BOTH CONDITIONS MUST TAKE PLACE IN ORDER BOTH CONDITIONS MUST TAKE PLACE IN ORDER THAT X’S OBLIGATION WILL ARISE.THAT X’S OBLIGATION WILL ARISE.