CHAPTER 3, SEC.

2 Obligations with a Period (Articles 1193-1198)

SECTION 2 OBLIGATIONS WITH A PERIOD

(Arts. 1193-1198)
STUDY GUIDE : (WEEK 4 24 July)
1. Art. 1193.
(a) Obligation with a period one whose consequences are subjected in one way or
another to the expiration of said period or term.

(b) Period or term a future and certain event; must also be physically and legally
possible.

(c) A day certain (par. 3) a day that will unavoidably happen although it may not be
known when.

(d) Kinds of period or term according to effect :

(d.1.) Suspensive period (ex die) the obligation begins only from a day certain
upon the arrival of the period. (par. 1)
(d.2.) Resolutory period (in diem) the obligation is valid up to a day certain and
terminates upon arrival of the period. (par. 2)

2. Art. 1194. The rules in Article 1189 will also apply in case of the loss, deterioration or
improvement of the thing before the arrival of the period or term.

3. Art. 1195. The debtor may recover what has been prematurely paid (plus fruits and
interests):

(a) If he was unaware of the period; or

(b) If he believed that the obligation has become due and demandable.
4. Kinds of period or term according to source :
(a) Legal period when provided for by law.
(b) Conventional or voluntary period when agreed to by the parties. (Art. 1196)
(c) Judicial period when fixed by the court. (Art. 1197)
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CHAPTER 3, SEC. 2 Obligations with a Period (Articles 1193-1198)

5. Art. 1196. Disputable presumption as to benefit of conventional or voluntary period:

(a) General rule: the period is presumed to have been established for the benefit of
both the creditor and the debtor. (Effect: The debtor cannot pay prematurely and
the creditor cannot demand prematurely.)

(b) Exceptions: (if there be such intent, e.g. when provided by agreement)
(b.1.) If the term is for the benefit of the debtor alone. (Effect: The debtor may
opt to pay prematurely but he cannot be compelled by the creditor to pay
prematurely.)
(b.2.) If the term is for the benefit of the creditor alone. (Effect: The creditor may
demand prematurely but he cannot be compelled by the debtor to accept
prematurely.)

READ THIS CASE IN ITS ORIGINAL TEXT: Villaseor vs. Javellana,

G.R. No. L-18500, October 2, 1922.

6. Art. 1197. Judicial period

(a) General rule: If the obligation does not state a period, and no period is intended
by the parties, the court is NOT authorized to fix a period.

(b) Exceptions : The court may, however, fix a period when :

(b.1.) No period is fixed but a period was intended. (par. 1)
(b.2.) The duration of the period depends upon the will of the debtor.
(Art. 1197, par. 2; See also Art. 1180)

READ THIS CASE IN ITS ORIGINAL TEXT: Chavez vs. Gonzales,

G.R. No. 27454, April 30, 1970.

7. Art. 1198. When the debtor loses the benefit of the period
(a) General rule: In obligations with a period, an obligation is not demandable
before the lapse of the period.
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CHAPTER 3, SEC. 2 Obligations with a Period (Articles 1193-1198)

(b) Exceptions:

In any of the following instances, however, the period is

disregarded, and the obligation becomes demandable at once :
(b.1.) When the debtor becomes insolvent, unless a guaranty or security is given.
(b.2.) When the debtor does not furnish the guaranties or securities as promised.
(b.3.) When the guaranties or securities given have been impaired by the debtor,
or have disappeared on account of a fortuitous event.
(b.4.)

When the debtor violates an undertaking related to the creditors

consenting to the period.

(b.5.) When the debtor attempts to abscond.

APPLICATION/PROBLEMS :
1. On January 1, 2013, D borrowed P200,000.00 from C payable on January 1,
2015, with 20% interest annually. On January 1, 2014, thinking that the obligation was
already due, D paid C P200,000.00 plus P80,000 interest. On January 3, 2014, D realized
that his debt was not yet due until a year after. Hence, D went to C to recover his payment.
May D recover from C under the circumstances? How much? Clue: Art. 1195.
2. On January 1, 2014, D borrowed P150,000.00 from C. As security for the
payment of his debt, D pledged with C a Rolex Date Just watch worth P225,000.00 which D
bought from Hong Kong. It was agreed by the parties that D was to pay back the money
loaned, with 10% interest per annum, on December 31, 2014. On September 5, 2014, D
went to C offering payment of the loan, plus interest corresponding to 8 months, and at the
same time redemption of the Rolex watch pledged. C, however, refused to accept Ds
payment as well as the return to D of his Rolex watch. Was C legally justified in refusing the
payment of D? Clue: Art. 1196.
3. On January 1, 2014, D borrowed P1M from C. D promised to pay back the
amount to C on December 31, 2015 at 10% interest per annum. On December 31, 2014, D
offered to pay the amount of P1.1M to C, which covered the principal amount of the loan
plus 10% interest on the loan for one year. C willingly accepted the payment. On February
1, 2015, however, D asked his lawyer to send a demand letter to D claiming payment of the
balance of P100,000.00 pertaining to the interest on Ds principal loan and corresponding to
the period from January 1, 2014 to December 31, 2015. C maintains that since the period
for the payment of the loan was established for the benefit of both the debtor and the
creditor, the debtor had no right to make premature payments. C also maintains that if D
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CHAPTER 3, SEC. 2 Obligations with a Period (Articles 1193-1198)

insists on paying prematurely, he can only be allowed to do so after paying the interest
computed up to the period agreed upon by the parties, i.e. P200,000.00. Is Cs argument
legally tenable? Clue: Art. 1196.

4. D obliged himself to pay C P85,000.00 as soon as possible. Three months

thereafter, C demanded payment from D but the latter refused to pay. What is the remedy
of C? Can C outrightly file an action in court for specific performance to compel D to pay his
obligation? Clue: Art. 1197, par. 2.
5. On June 30, 2014, Malusog Medical Equipments, Inc. sold to Dr. Katakutan a
portable x-ray machine for P1.2M. MMEI agreed to accept payment for the machine in four
equal quarterly installments until June 30, 2015 but asked for a collateral. Dr. Katakutan
then mortgaged to MMEI a 2012 MB 100 which was being used by his infirmary as
ambulance. On September 15, 2014, the MB 100, while parked outside the NAIA Terminal
3 awaiting the arrival of a patient, was carnapped and was no longer recovered. After
notice of the incident, MMEI, on September 20, 2014, demanded for payment of the entire
P1.2M from Dr. Katakutan. Dr. Katakutan, however, refused to pay the total price for the
machine. Dr. Katakutan contends that he cannot be made liable for the whole obligation
because under the parties agreement, he was given until June 30, 2015 within which to pay
for the contract price in four equal quarterly installments. Besides, Dr. Katakutan states, the
collateral he furnished to MMEI was lost not through his own fault but by virtue of a
fortuitous event. Will Dr. Katakutans arguments prosper? Clue: Art. 1198, par. 3.

*** END ***

FOOD FOR THOUGHT

We are what we repeatedly do. Excellence then is not an act, but a habit.

Aristotle
There are no short cuts to any place worth going.

Beverly Sills
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CHAPTER 3, SEC. 2 Obligations with a Period (Articles 1193-1198)

Keep away from people who belittle your ambitions.

Small people always do that, but the really great make you feel that you, too, can become great.

Mark Twain

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