c. With a Period

Presumption of death of absentee under an ordinary presumption

Absentee is presumed to have died under an ordinary presumption after seven years of absence for all purposes except succession. For succession, the period is ten years, or five years if the absentee disappeared after the age of seventy-five. (Civil Code, Art. 390)

Period for acceptance

• Stated fixed period in the offer – The offeree may accept at any time until such period expires (Young v. Court of Appeals, G.R. No. 83271)
• No stated fixed period
• Offer is made to a person present – Acceptance must be made immediately (Malbarosa v. Court of Appeals, G.R No. 125761)
• Offer is made to a person absent – Acceptance may be made within such time that, under normal circumstances, an answer can be received from him.

NOTE: For a contract to arise, the acceptance must be made known to the offeror. Accordingly, the acceptance can be withdrawn or revoked before it is made known to the offeror. (Oesmer v. Paraiso Development Corporation, G.R. No. 157493)

NOTE: We follow the theory of cognition (CIVIL CODE, art. 1319) and not the theory of manifestation. Under our Civil Law, the offer and acceptance concur only when the offeror comes to know of it and not when the offeree merely manifests his acceptance.

When There is No Period Fixed for the Condition Imposed

If no period is fixed in the contract but its nature and circumstances show that the parties intended one, or if the period’s duration depends on the debtor’s will, the court may fix the period under Article 1197. However, in a case where 50 years had passed without the condition having been fulfilled the Court refused to fix a period and ruled that the donation can be revoked for failure to comply with that condition. (Central Philippine University v. CA, GR No. 112127, 1995)

“Day certain” refers to either:

• A day certain is a future event that must necessarily come, although it may not be known when it will come (Article 1193).
• A promise to pay when the debtor’s means permit is deemed an obligation with a period (Article 1180); the period is to be fixed by the court under Article 1197, taking into account the intention of the parties.

May also be further classified into:

• Suspensive - obligation is suspended until arrival of the period; or
• Resolutory - obligation is immediate but terminates upon arrival of the period.

Benefit of the period

Significance of Period:

• Obligor cannot be compelled to pay or perform before the arrival of the period
• Obligee cannot compel payment or performance

Both are subject to the right of each party to waive – even if the obligor is willing to pay interest for the remainder of the period.

PRESUMPTION: for the benefit of both parties

It can be given to either party:

• The period may benefit the debtor or obligor by law or by stipulation, as when payment is due on or before a stated date.
• The period benefits the creditor or obligee only by stipulation.

When the debtor loses the benefit of the period

The debtor may be required to pay immediately in these cases:

• After contracting the obligation, the debtor becomes insolvent, which may be shown by liabilities exceeding assets or inability to pay debts as they fall due, unless he gives a guaranty or security for the debt.
• The debtor fails to furnish the guaranty or security promised to the creditor.
• The debtor impairs an established guaranty or security by his own acts, or it disappears through a fortuitous event, unless he immediately provides a new one equally satisfactory.
• The debtor violates an undertaking in consideration of which the creditor agreed to the period.
• The debtor attempts to abscond; an actual departure is not required. (Civil Code, art. 1198)
• For an obligation payable in installments or under an amortization schedule, an acceleration clause may entitle the creditor, upon failure to pay an installment as stipulated, to demand the entire unpaid balance.

When a court may fix a period

• The obligation states no period, but its nature and circumstances show that the parties intended one. (Civil Code, art. 1197)
• The duration of the period depends on the debtor’s will. (Civil Code, art. 1197)
• In a reciprocal obligation, just cause authorizes the court to fix a period instead of decreeing the rescission sought. (Civil Code, art. 1191)
• The debtor undertakes to pay when his means permit; the obligation is treated as one with a period, subject to Article 1197. (Civil Code, art. 1180)
• For a lease with no fixed period, Article 1687 sets the applicable period according to how rent is paid and, in its specified cases, permits the court to fix a longer term after the lessee has occupied the premises for the required length of time. (Civil Code, art. 1687)

Note: Article 1197 applies when the parties have not fixed a period or when its duration depends on the debtor’s will. The court must not set the period arbitrarily; it must determine what the parties probably contemplated under the circumstances.

Two-step inquiry under Article 1197:

• Determine whether no period was fixed although the nature and circumstances show that one was intended, or whether the period depends on the debtor’s will.
• Determine the period the parties probably contemplated. (Gregorio Araneta, Inc. v. The Philippine Sugar Estates Dev. Co., G.R. No. L22558)

Alternative or Facultative Obligations

Tenure of Fiduciary

Primary Rule: Period indicated by the testator

Secondary Rule: If the testator did not indicate a period, then the fiduciary’s lifetime. (Balane, supra, citing Manresa)

Legacy of a Periodical Pension

If a periodical pension, or a certain annual, monthly, or weekly amount is bequeathed, the legatee may petition the court for the first installment upon the death of the testator, and for the following ones which shall be due at the beginning of each period; such payment shall not be returned, even though the legatee should die before the expiration of the period which has commenced. (Art. 945)