4. Natural Obligations

A. Obligations

Civil and Natural Obligations – Civil Code, arts. 1423-1430

TITLE III

NATURAL OBLIGATIONS

Article 1423. Obligations are civil or natural. Civil obligations give a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof. Some natural obligations are set forth in the following articles.

Article 1424. When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot recover what he has delivered or the value of the service he has rendered.

Article 1425. When without the knowledge or against the will of the debtor, a third person pays a debt which the obligor is not legally bound to pay because the action thereon has prescribed, but the debtor later voluntarily reimburses the third person, the obligor cannot recover what he has paid.

Article 1426. When a minor between eighteen and twenty-one years of age who has entered into a contract without the consent of the parent or guardian, after the annulment of the contract voluntarily returns the whole thing or price received, notwithstanding the fact that he has not been benefited thereby, there is no right to demand the thing or price thus returned.

Article 1427. When a minor between eighteen and twenty-one years of age, who has entered into a contract without the consent of the parent or guardian, voluntarily pays a sum of money or delivers a fungible thing in fulfillment of the obligation, there shall be no right to recover the same from the obligee who has spent or consumed it in good faith. (1160A)

Article 1428. When, after an action to enforce a civil obligation has failed the defendant voluntarily performs the obligation, he cannot demand the return of what he has delivered or the payment of the value of the service he has rendered.

Article 1429. When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the value of the property which he received by will or by the law of intestacy from the estate of the deceased, the payment is valid and cannot be rescinded by the payer.

Article 1430. When a will is declared void because it has not been executed in accordance with the formalities required by law, but one of the intestate heirs, after the settlement of the debts of the deceased, pays a legacy in compliance with a clause in the defective will, the payment is effective and irrevocable.

Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof. (Art. 1423, NCC)

Rationale

• On the part of the payor – It gives rise to a moral, rather than a legal duty to pay or perform, but the person performing feels that in good conscience he should comply with his undertaking, which is based on moral grounds; and
• On the part of the payee – Voluntary fulfillment of a natural obligation authorizes the payee to retain what was delivered or rendered, although performance could not have been compelled under Civil Code, Art. 1423. (1947 Code Commission)

NOTE: The foundation of natural law are equity, morality and natural justice. (Sta. Maria, 2017)

Examples of Natural Obligations

• Paying despite extinctive prescription When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot recover what he has delivered or the value of the service he has rendered. (Art. 1424, NCC) e.g., The prescriptive period to file a case based on a written agreement is 10 years from the time the right of the action accrues. If the creditor does not collect the amount of the loan after 10 years from the time it should be paid, such creditor can no longer collect from the debtor. If the debtor, despite the lapse of the period and knowing that the debt has already prescribed, pays the creditor, such debtor can no longer recover the payment. (Sta. Maria, 2017)
• 3rd person paying against the will of the debtor When without the knowledge or against the will of the debtor, a 3rd person pays a debt which the obligor is not legally bound to pay because the action thereon has prescribed, but the debtor later voluntarily reimburses the 3rd person, such debtor can no longer recover such payment. (Art. 1425, NCC) e.g., A is indebted to Z but the collection of such debt has already prescribed and therefore can no longer be collected. If M pays the debt to Z and later on, A voluntarily reimburses M, such payment shall be considered valid and A cannot recover from M the amount A voluntarily paid to reimburse M. (Sta. Maria, 2017)
• Contract made by a minor An incapacitated person is not obliged to make any restitution except insofar as he has been benefited by the thing or price received by him. (Arts. 1426 & 1427, NCC) NOTE: A person who is between 18 and 21 years of age is NOT a minor. In present time, the age of majority is 18. (R.A. No. 6809) However, Articles 1426 and 1427 retain only the returns or payments described in their respective terms: Article 1426 requires annulment of the contract and voluntary return of the whole thing or price received; Article 1427 requires that the obligee spent or consumed the money or fungible thing in good faith. Their references to persons aged 18 to 21 must be read in light of the age of majority of 18. (Sta. Maria, 2017)
• Performance by winning party. When, after an action to enforce a civil obligation has failed the defendant voluntarily performs the obligation, he cannot demand return of what he has delivered or the payment of the value of the service he has rendered. (Art. 1428, NCC) e.g., If A is indebted to B for P1,000.00 and a civil suit is filed to collect the amount but such suit is dismissed, A need not to pay said amount but if he voluntarily makes payment, he can no longer recover such payment. (Sta Maria, 2017)
• Voluntary payment of an heir in excess of inherited property (Art. 1429, NCC) e.g., A is indebted to B for P10,000.00. A later dies, with C as his heir who is entitled only to P5,000.00 from the estate of A. If C voluntarily pays B P10,000.00, C can no longer recover such amount. (Sta. Maria, 2017)
• Payment of a void legacy. (Art. 1430, NCC) e.g., M provided in his holographic will that his car shall go to his driver X. Later, the holographic will turns out to be partly typewritten and therefore it is void as such will should be wholly handwritten by the testator. If, after settlement of M’s debts, Z as an intestate heir pays the legacy of the car to X in compliance with the defective will, the payment is effective and irrevocable. (Sta. Maria, 2017)

NOTE: Examples of natural obligations under Title III are NOT exclusive. (Sta. Maria, 2017)

General Provisions – Civil Code, arts. 1156-1162

TITLE I

Obligations

CHAPTER 1

General Provisions

Article 1156. An obligation is a juridical necessity to give, to do or not to do. (n)

Article 1157. Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts. (1089a)

Article 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. (1090)

Article 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. (1091a)

Article 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this Book. (n)

Article 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of article 2177, and of the pertinent provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title XVIII of this Book, regulating damages. (1092a)

Article 1162. Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of this Book, and by special laws. (1093a)

Moral Obligation as Cause

Where the moral obligation arises wholly from ethical considerations, unconnected with any civil obligations, it cannot constitute a sufficient cause or consideration to support an onerous contract. (Fisher v. Robb, G.R. No. 46274)

Where such moral obligation is based upon a previous civil obligation which has already been barred by the statute of limitations at the time when the contract is entered into, it constitutes a sufficient cause or consideration to support a contract. (Villarroel v. Estrada, G.R. No. L-47362)

Principles of Contracts – Civil Code, arts. 1159 and 1305-1317