1 | R e e n F a b i a , S a n B e d a C o l l e g e o f L a w

NATURAL OBLIGATIONS

Art. 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.

NATURAL OBLIGATIONS

- Basis: equity and natural law

There exists a universal immutable law, which is the source of all positive law, and which is no

other than natural reason in so far as it governs all men.

- Obligations without a sanction, susceptible of voluntary performance, but not through compulsion by

legal means

- Midway between civil and purely moral obligations

Conditions of a natural obligation:

1. A juridical tie between two persons

The binding tie of these obligations is in the conscience of man, for under the law, they do not

have the necessary efficacy to give rise to an action.

2. Such tie is not given effect by law

- Reasons for regulation:

o The law encourages people to fulfil their moral obligations.

o Because they rest upon morality and because they are recognized in some leading civil codes,

natural obligations should again become part and parcel of the Philippine law.

Difference of natural, civil and moral obligations

Natural Obligations Civil Obligations Moral Obligations

- Based on equity and natural law

- Based on positive law - Completely outside the field of law

- Not enforceable in a court of action

- Enforceable in a court of action

- There is a juridical tie between parties

- No juridical tie between parties

- Voluntary fulfilment produces legal effects

- Voluntary fulfilment does not produce any legal effects

Art. 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.

E.g. A borrowed Php1,000.00 from B. After the debt has prescribed, A pays the total amount to B. An

action to demand the return of the amount on the ground of wrong payment for having paid after the

debt has prescribed will not prosper.

2 | R e e n F a b i a , S a n B e d a C o l l e g e o f L a w

Art. 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.

Art. 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 the he has not been benefited thereby, there is no right to demand the

thing or price thus returned.**

Art. 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.**

N.B.

Note that under the law, a person eighteen years of age is no longer a minor, but of majority age; hence

his contract is not annullable on the ground of incapacity. Articles 1426 and 1427 are no longer applicable.

Art. 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.

Art. 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.

Art. 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.

3 | R e e n F a b i a , S a n B e d a C o l l e g e o f L a w

ESTOPPEL

Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and

cannot be denied or disproved as against the person relying thereon.

ESTOPPEL

- Origin: equity

- Basis: moral and natural justice

- Bar which precludes a person from denying or asserting anything to the contrary of which has, in

contemplation of law, been established as the truth, either by acts of judicial or legislative officers or by

his own deed or representation, either expressed or implied.

- Exception: If the act, conduct or representation of the party sought to be estopped is due to

ignorance founded on innocent mistake, estoppel will not arise.

- Cannot be predicated on an illegal act

- Reason for inclusion in the Civil Code: Estoppel will afford solution to many questions which are not

foreseen in our legislation.

Estoppel Waiver Ratification

- May be done impliedly and without intention

- Voluntary and intentional abandonment or relinquishment of a known right

- Binding has full intention

- May only involve the conduct of one party

- Involves the conduct of both parties

Art. 1432. The principles of estoppel are hereby adopted insofar as they are not in conflict with the provisions of this

Code, the Code of Commerce, the Rules of Court and special laws.

Art. 1433. Estoppel may be in pais or by deed.

Kinds of estoppel

Estoppel in pais/by conduct

- “Equitable estoppel” - That which arises when one by

his own acts, representations, or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence, induce another to believe certain facts to exist

Essential elements as to the party being estopped: 1. Conduct amounting to false

representation or concealment of material facts

2. Intent or at least expectation that this conduct shall be acted upon by

3. Knowledge, actual or constructive, of the real facts

Essential elements as to the party claiming the estoppel: 1. Lack of knowledge or means of

knowledge of the truth as to the facts in question

2. Reliance, in good faith upon the conduct or statements, action or inaction based thereon

Estoppel by silence

- A type of estoppel in pais - Arises when a party who has a

right and opportunity to speak or act as well as duty to do so under the circumstances,

- That contemplated in Article 1437 of the Civil Code.

4 | R e e n F a b i a , S a n B e d a C o l l e g e o f L a w

induces another to believe certain facts to ecist and such other relies on acts of such belief

Estoppel by acceptance of benefits

- A type of estoppel in pais - Accepting benefits derived from

a certain act or transaction, induces another that certain facts exist

- That contemplated in Article 1438 of the Civil Code.

Estoppel by deed/record

- A kind of technical estoppel

Estoppel by deed - By virtue of which a party to a

deed and his privies are precluded from asserting against the other party and his privies any right or title in derogation of the deed, or from denying any material fact asserted therein

Estoppel by record - By virtue of which a pary and

his privies are precluded from denying the truth of matters set forth in a record whether judicial or legislative

Estoppel by judgement

- A type of estoppel by record - The preclusion of a party to a

case from denying the facts adjudicated by a court of competent jurisdiction.

As opposed to res judicata - This type of estoppel only bars

the parties from raising any question that might have put in issue and decided in previous litigations

Estoppel by laches

Laches (a.k.a. “stale demands”) - Negligence or omission to

assert a right within a reasonable time, warranting a presumption that the party entitled to assert is has abandoned it.

Basis: Public policy requires peace of society, and the discouragement of stale claims

Elements: 1. Conduct on the part of the

defendant, or of one whom he claims, giving rise to the situation of which complaint is made and for which the complaint seeks a remedy

2. Delay in asserting the complainant’s rights

3. Lack of knowledge or notice on the part of the defendant that the complainant would assert the right

4. Injury or prejudice to the defendant in the event relief is accorded to the complainant

Difference of Laches and Prescription

Laches Prescription

- Concerned with the effect of delay - Concerned with the fact of delay

- A question of inequity of permitting a claim to be enforced

- A question of a matter of time

5 | R e e n F a b i a , S a n B e d a C o l l e g e o f L a w

Laches Prescription Inequity is founded on some changes

to the property or the relation of the parties

- Not statutory - Statutory

- Applies in equity - Applies at law

- Not based on fixed time - Based on fixed time

Recommended Case: Heirs of Lacamen vs. Heirs of Laruan (65 SCRA 605)

Art. 1434. When a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or

grantor acquires title thereto, such title passes by operation of law to the buyer or grantee.

- A person who sells property when he did not have title to it, cannot deny validity to the sale after he has

acquired the title.

- Prejudice is not essential.

- Applies to the sale of “after acquired property” which is allowed by the law on Sales under the Civil Code.

Art. 1435. If a person in representation of another sells or alienates a thing, the former cannot subsequently set up

his own title as against the buyer or grantee.

- Created in a representative capacity

- Prejudice is also not essential

Art. 1436. A lessee or a bailee is estopped from asserting title to the thing leased or received, as against the lessor

or bailor.

ESTOPPEL OF A TENANT

- A tenant will not be heard to dispute his landlord’s title.

- Exception: If the alleged tenant does not admit expressly or implicitly the existence of the lease

contract, the presumption does not apply.

Art. 1437. When in a contract between third persons concerning immovable property, one of them is misled by a

person with respect to the ownership or real right over the real estate, the latter is precluded from asserting his

legal title or interest therein, provided all these requisites are present:

(1) There must be fraudulent representation or wrongful concealment of facts known to the party

estopped;

(2) The party precluded must intend that the other should act upon the facts as misrepresented;

(3) The party misled must have been unaware of the true facts; and

(4) The party defrauded must have acted in accordance with the misrepresentation.

ESTOPPEL CONCERNING IMMOVABLE PROPERTY

- One should have been otherwise there is no estoppel.

- Knowledge of true facts by the stranger prevents deception, so estoppel cannot apply.

- On the party who is to be in misled estoppel, should have made a fraudulent representation or wrongful

concealment of facts known to him.

6 | R e e n F a b i a , S a n B e d a C o l l e g e o f L a w

- Acquiescence/consent of the true owner estops him from asserting any right over the property.

(Cementina, et. al. vs. Court of Appeals, 91 Phil 922)

Recommended Case: Fabie, et. al. vs. City of Manila (10 Phil 64)

Art. 1438. One who has allowed another to assume apparent ownership of personal property for the purpose of

making any transfer of it, cannot, if he received the sum for which a pledge has been constituted, set up his own

title to defeat the pledge of the property, made by the other to a pledgee who received the same in good faith and

for value.

ESTOPPEL FROM BENEFITS

- Occurs when the owner of personal property has allowed another to assume apparent ownership of the

thing for the purpose of making any transfer of it, and the latter pledges it to a third person who receives

the same in good faith and for value.

- The owner is precluded from setting up his own title to defeat the pledge of the property if he

received the sum from which the pledge was constituted.

- Basis: acceptance and retention by one having knowledge of the facts of the benefits from a transaction

which he might have rejected

Art. 1439. Estoppel is effective only as between the parties thereto or their successors in interest.

PERSONS BOUND BY ESTOPPEL

1. The parties of the contract

2. Successors-in-interest (heirs and grantees)

- Reason for the rule: Mutuality is an essential element of an estoppel; an estoppel must bind both parties

or neither is bound.

N.B.

The government is not estopped by mistake or error on the part of its officials or agents; the erroneous

application and enforcement of the law by public officers does not prevent a subsequent correct

application.