Under the Philippine Civil Code, obligations and contracts are governed by specific principles and classifications, particularly regarding the nature of obligations and the conditions attached to them. When it comes to "conditional obligations," the focus is on obligations with attached conditions that affect their enforceability, effects, and termination.

Conditional Obligations

A conditional obligation is an obligation that depends on a future or uncertain event or a past event unknown to the parties. The existence or fulfillment of the obligation is contingent upon the occurrence (or non-occurrence) of that event. Article 1181 of the Civil Code specifies: “In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition.”

Kinds of Conditions in Conditional Obligations

1. Suspensive Condition (Condition Precedent)

Definition: A suspensive condition is one that must occur before the obligation takes effect. The fulfillment of this condition gives rise to the obligation.
Effect: When the condition occurs, the obligation arises, and the parties are bound to perform their respective duties under the contract.
Examples: A contract to sell a piece of land "if the buyer secures a loan" has a suspensive condition. If the buyer fails to secure a loan, the sale does not proceed.

2. Resolutory Condition (Condition Subsequent)

Definition: A resolutory condition extinguishes an obligation upon its fulfillment. In contrast to a suspensive condition, the obligation exists immediately but is terminated upon the occurrence of the specified condition.
Effect: Once the condition happens, the obligation is extinguished, and the parties are released from further performance.
Example: A lease contract with a clause stating that the lease will terminate if the lessee moves out of the city. If the lessee relocates, the lease ends.

Classification Based on Certainty and Timing

1. Possible vs. Impossible Conditions

Possible Conditions: Conditions that can happen based on the nature of events or actions.
Impossible Conditions: Conditions that cannot happen. Under Article 1183, an obligation based on an impossible condition is generally void. However, if the condition is purely accidental or non-essential to the main contract, the obligation may still be valid.

2. Positive vs. Negative Conditions

Positive Condition: Requires the happening of an event. For example, "if it rains tomorrow," the positive occurrence of rain would fulfill the condition.
Negative Condition: Requires the non-happening of an event, such as “if the buyer does not obtain a loan by the end of the month.”

3. Divisible and Indivisible Conditions

Divisible Condition: If the condition can be partially fulfilled (e.g., payment in installments), the effects are proportionate to each fulfillment.
Indivisible Condition: Cannot be partially fulfilled (e.g., building a house on a lot). The entire obligation depends on the full fulfillment of the condition.

4. Casual, Potestative, and Mixed Conditions

Casual Condition: The fulfillment of this condition depends on chance or the will of a third party. It is neither within the control of the obligor nor the obligee (e.g., “if the government approves the zoning permit”).
Potestative Condition: The fulfillment of this condition depends solely on the will of one of the contracting parties.
- Example: An obligation that depends on the obligor’s decision to do something. If the potestative condition is purely dependent on the will of the obligor, as per Article 1182, it renders the obligation void, except in bilateral contracts where mutual agreement is involved.
Mixed Condition: Depends partly on the will of one of the contracting parties and partly on chance or the will of a third party (e.g., "if I secure a promotion, and the client renews the contract").

Effect of Conditions on the Parties' Rights

Suspensive Condition Fulfillment: Once the suspensive condition is met, the obligation arises with all its effects. This may grant rights to the obligee that are enforceable by law.
Failure of Suspensive Condition: If a suspensive condition does not materialize, the obligation does not take effect, and parties have no duties under the agreement.
Resolutory Condition Fulfillment: Fulfilling a resolutory condition ends the obligation and may revert the parties to their previous positions, often with restitution if performance was partially or fully completed.
Retroactive Effect: In certain cases, the Civil Code provides that fulfillment of a suspensive condition may have retroactive effects, particularly with obligations involving obligations to deliver (specific obligations of dare). However, this does not apply to personal obligations (obligations of facere or non facere).

Effects of Loss, Deterioration, or Improvement (Articles 1189–1190)

Loss Before Fulfillment of Condition:
- If the object of the obligation is lost or destroyed due to a fortuitous event, the obligation is extinguished if the loss occurs before the fulfillment of the suspensive condition.
Deterioration of the Object:
- If the object deteriorates without fault of the obligor, the deterioration is borne by the obligee upon fulfillment of the condition. If the obligor is at fault, the obligee may choose to either cancel the obligation or accept the performance with indemnity for damages.
Improvement of the Object:
- If the object improves while under conditional obligation, such improvements benefit the obligee without additional cost unless improvements were due to the obligor's expenditure.

Reciprocal Obligations and Conditional Obligations

In reciprocal obligations (such as in a contract of sale where both buyer and seller have obligations), fulfillment of a condition by one party may trigger or release obligations by the other. Article 1191, dealing with the resolution of reciprocal obligations, allows an injured party to seek rescission of the obligation if the other party fails to comply.

Rights of the Parties Pending Fulfillment of the Condition

Conditional Creditor’s Rights:
- Under a suspensive condition, the creditor has a mere expectancy or "inchoate right" over the obligation. They cannot demand performance but have certain protections if the condition is fulfilled.
Conditional Debtor’s Rights:
- The debtor is not obliged to perform the obligation until the condition is fulfilled and generally cannot be compelled to do so.
Effects of Anticipated Fulfillment of Condition:
- If the parties agree to fulfill the condition ahead of schedule, the obligation may take effect immediately. However, premature fulfillment must comply with mutual consent or legal requirements.

Remedies and Enforcement Under Conditional Obligations

Performance and Enforcement: When a condition is fulfilled, the obligation becomes enforceable by law.
Rescission or Cancellation: If the condition fails or a resolutory condition is fulfilled, parties may seek to rescind the contract, potentially with damages or restitution.
Claim for Damages: If the obligor’s action or negligence prevents the fulfillment of a suspensive condition, the obligee may claim damages for the lost obligation.

The intricacies of conditional obligations in the Philippines Civil Code underscore the importance of specifying the nature, terms, and potential outcomes associated with conditions, protecting parties’ rights within the broader framework of contract and obligation law.