1

NOTES ON NATURAL OBLIGATIONS

Article 1423 provides:

Obligations are civil or natural. Civil obligations give aright of action to compel their performance. Natural
obligations, not being based on positive 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.

Natural obligation is based on equity or natural law while civil obligation is based in positive law. The latter
gives right of action to compel their performance (juridical necessity) while natural obligation do not grant such right of
action to enforce their performance.

Article 1424: When the 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.

The following actions must be brought within 10 years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment (Art. 1144)

The following actions must be commenced within 6 years:

(1) Upon oral contract
(2) Upon a quasi-contract (Art. 1145)

The following actions must be instituted within 4 years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi delict (Art. 1146)

Article 1425: If the third person pays the prescribed debt of the debtor without his knowledge or against his will, the
latter is not legally bound to pay hi, But the debtor cannot recover what he has paid in case he voluntarily reimburses
the third person.

Article 1428: Where a debtor who has failed to pay his obligation, is sued by the creditor and instead of losing the case,
he has won it. If, notwithstanding this fact, the debtor voluntarily performs his obligation, he cannot demand the return
what he has delivered or the payment of the value of the service he has rendered. He must be deemed to have
considered it his moral duty to fulfill his obligation.

Article 1429: When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the value of his
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cannot be rescinded by the payer.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 be 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.

SUMMARY ON THE LAW ON DAMAGES

(Articles 2195-2235)

General Provisions on Damages

Latin Term is DAMNUM or DEMO which means to take away.

Meaning of Damages: It is the sum of money which the law awards or imposes as pecuniary compensation or
satisfaction for an injury done or wrong sustained as a consequence of the breach of some duty or the violation of some
right. ( 15 Am. Jur. 387)

It is compensation in money imposed by a court for loss or injury caused by the fault o another. (Hemphill’s
Dictionary of Practical Law).

BASIS OR RATIONALE:

The fundamental principal of the law on damages is that one injured by a breach of contract or by a wrongful
or negligent act or omission shall have a fair and just compensation commensurate with the loss sustained as a
consequence of the defendant’s act. Hence actual pecuniary compensation is the general rule, whether the action is
based on contract or in tort, except where the circumstances warrant the allowance of other kinds of damages. In
general the damages awarded should be equal to, and precisely commensurate with the injury sustained. However,
rules of law respecting the recovery of damages are framed and reference to just rights of BOTH PARTIES, not merely
what may be right for an injured person to receive, but also what is just to compel the other party, to accord just
compensation for the injury.

1
 2
Distinction between DAMAGES and INJURY

緣UUserUser 0 Injury denotes the illegal act, while damages mean the total amount recoverable for the injury
committed.
緣UUserUser 1 Damages are measure of recovery while Injury is the legal wrong to be redressed.
緣UUserUser 2 There may be damages without an injury, and an injury without damages.

Note: There can be damage without injury (Damnum absque injuria)

Article 2195

This provision provides that the Chapter on Damages shall be applicable to all obligations mentioned in Article
1157. Obligations arise from the following sources in accordance with said provision:

a. Law
b. Contracts
c. Quasi-contracts
d. Acts or omission punishable by law; and
e. Quasi-delicts

Article 1296: It is to be observed that in case of conflict between the Civil Code and the Special Laws, it is the Civil Code
that prevails insofar as damages are concerned. Exception in the case of compensation for workmen and other
employees.

Article 2197: Damages are the following:

a. Actual or compensatory;
b. Moral
c. Nominal
d. Temperate or moderate
e. Liquidated; or
f. Exemplary or corrective

Article 1298 The principle of the general law on damages are hereby adopted insofar as they are not inconsistent with
the Civil Code.

ACTUAL OR COMPENSATORY DAMAGES (Articles 2199-2215)

They are those recoverable because of pecuniary loss (in business, trade, property, profession, job or
occupation. They include:

a. The value of the loss suffered (Daño Emergente)

b. Profits which were not obtained or realized (Lucro Cesante)

The above are also identified as the kinds of actual or compensatory damages. (Article 2200)

Examples of Daño Emergente

a. Destruction of things
b. Fines or penalties that had to be paid
c. Medical and hospitalization expenses

Examples of Lucro Cesante

a. Profits that could have been earned had there been interruption in the plaintiff’s business evidenced by the
reduced receipts of the enterprise.
b. Interest on rentals that were not paid.

Article 2201 provides fir the liability of debtor in contracts and quasi-contracts:

Liability of debtor if there is good faith but damages are sustained by the injured party: It is essential that the
damages be the NATURAL and PROBABLE CONSEQUENCES of the act or omission complained of.

- The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the
damages resulting from the act or omission in question. (Art.2202).

Article 2206 - The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos
(now P 50,000*), even though there may have been mitigating circumstances. In addition :

a. The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be
paid to the heirs of the latter such indemnity shall in every case be assessed and awarded by court, unless the deceases
on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his
death;

2
 3
b. If the deceases was obliged to give support in according to the provisions of Article 291, the recipient who is
not an heir called to the decedent’s inheritance by the law of testate or intestate succession, may demand support from
the person causing the death, for ap reiod not exceeding five years, the exact duration to be fixed by the court.

c. The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the deceased.

* PP vs. Ortis, 361 SCRA 274, July 17, 2001, PP vs. Maxion, 361 SCRA 414, July 19, 2001. These are jurisprudences of
the Supreme Court stating that in case of death, the indemnity for actual damages is P 50,000.

OTHER DAMAGES

No proof of pecuniary loss is necessary in order that MORAL, NOMINAL, TEMPERATE, LIQUIDATED OR
EXEMPLARY DAMAGES may be adjudicated. The assessment of such damages, except liquidated ones, is left to the
discretion of the court, according to the circumstances of each case. (Art. 2216)

Note: Proof of pecuniary loss is only necessary in actual or compensatory damages but not so in other
damages above mentioned. Such damages then can be recovered based on the sound discretion of the court after
evaluating the circumstances of such cases.

A. MORAL DAMAGES.- (Articles 2217-2220)

Article 2216 : Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation and similar injury. Though incapable of pecuniary
computation, moral damages may be recovered if they are the proximate result of the defendant’s wrongful act or
omission.

Moral damages may be awarded to compensate one for manifold injuries such as physical suffering, mental
anguish, serious anxiety, besmirched reputation, wounded feelings and social humiliation. These damages must be
understood to be in the concept of grants, not punitive or corrective in nature, calculated to compensate the claimants
for the injury suffered. Although incapable of exactness and no proof of pecuniary loss is necessary in order that moral
damages may be awarded, the amount of indemnity being left to the discretion of the court, it is imperative
nevertheless, that (1) injury must have been suffered by the claimant and (2) such injury must have been sprung from
any cases expressed in Articles 2219 and 2220 of the Civil Code. A causal relation must exist between the actor
omission referred in the Code which underlines or gives rise to, the case or proceeding, on the one hand, and the
resulting injury, on the other; i.e. the first must be the proximate cause and latter the direct consequence thereof. (Del
Mundo v. Court of Appeals, G.R. No. 104576, January 20, 1995).

In the adjudication of moral damages, the sentimental value of the property, real or personal, may be
considered. (Art. 2218)
Moral damages may be recovered on the following and analogous cases:
1. A criminal offense resulting to physical injuries;
2. Quasi-delicts causing physical injuries;
3. Seduction, abduction, rape and other lascivious acts;
4. Adultery or concubinage;
5. Illegal or arbitrary detention or arrest;
6. Illegal search;
7. libel, slander, or any other form of defamation;
8. Malicious prosecution;
9. Acts mentioned in Article 309;
10. Acts and action referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35.
The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in no. 9 of this
article, in the order named. (Art. 2218)

Willful injury to the property may be a legal ground for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith.

References: The below stated articles indicate instances where moral damages may be claimed in addition to the
indemnity which the court may grant:

Article 309 : Any person who shows disrespect to the dead, or wrongfully interferes with a funeral shall be
liable to the family of the deceased for damages, material and moral.
Article 21: Any person who willfully causes loss or injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter the damage.

Article 26: Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and
other persons. The following and similar acts, though they may not constitute criminal offense, shall produce a cause of
action for damages, prevention and other relief:

1. Prying into the privacy of another’s residence;

2. Meddling with or disturbing the private life or family relations of another;
3. Intriguing to cause another to be alienated from his friends;
4. Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth,
physical defect or other personal condition..

3
 4
Article 27: Any person suffering material or moral loss because a public servant or employee refuses or
neglects without just cause, to perform his official duty may file an action for damages and other relief against the latter,
without prejudice to any disciplinary administrative action that may be taken.

Article 28: Unfair competition on agricultural and commercial or industrial enterprises or in labor through the
use of force, intimidation, deceit, machinations or any other unjust, oppressive or highhanded method shall give rise to a
right of action by the person who thereby suffers damage.

Article 29: When the accused in a criminal prosecution is acquitted on the ground that his guilt has not been
proved beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted. Such action
requires only preponderance of evidence. Upon motion of the defendant, the court may require the plaintiff to file a
bond to answer for damages in case the complaint should be found malicious. If in the criminal case the judgment of
acquitted is based on reasonable doubt, the court shall declare so. In the absence of any declaration to that effect, it
may be inferred from the text of the decision whether or not the acquittal is due to that ground.

Article 30: When a separate civil action is brought to demand civil liability arising from the criminal offense, and
no criminal proceedings are instituted during the pendency of the civil case, a preponderance of evidence shall likewise
be sufficient to prove the act complained of.

Article 32: Any public officer or employee, or any private individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be
liable to the latter for damages:
逃 സ䭞- ̡̡58245സ䭞- ̡̡
Freedom of religion;
逃 സ䭞- ̡̡58246സ䭞- ̡̡
Freedom of speech;
逃 സ䭞- ̡̡58247സ䭞- ̡̡
Freedom to write for the press or to maintain a periodical publication;
逃 സ䭞- ̡̡58248സ䭞- ̡̡
Freedom from arbitrary or illegal detention;
逃 സ䭞- ̡̡58249സ䭞- ̡̡
Freedom to suffrage;
逃 സ䭞- ̡̡58250സ䭞- ̡̡
The right against deprivation of property without due process of law;
逃 സ䭞- ̡̡58251സ䭞- ̡̡
The right to a just compensation when the private property is taken for public use;
逃 സ䭞- ̡̡58252സ䭞- ̡̡
The right to equal protection of the laws;
逃 സ䭞- ̡̡58253സ䭞- ̡̡
The right to secure in one’s person, house, papers and effects against unreasonable searches and seizures;
逃 സ䭞- ̡̡58254സ䭞- ̡̡
The liberty of abode and changing the same;
逃 സ䭞- ̡̡58255സ䭞- ̡̡
The privacy of communication and correspondence;
逃 സ䭞- ̡̡58256സ䭞- ̡̡
The right to become a member of associations or societies for purpose not contrary to law;
逃 സ䭞- ̡̡58257സ䭞- ̡̡
The right to take part in a peaceful assembly to petition the government for redress of grievances;
逃 സ䭞- ̡̡58258സ䭞- ̡̡
The right to be free from involuntary servitude to any form;
逃 സ䭞- ̡̡58259സ䭞- ̡̡
The right of the accused against excessive bail;
逃 സ䭞- ̡̡58260സ䭞- ̡̡
The right of the accused to be heard by himself and counsel, to be informed of the nature and cause of the accusation
against him; to have a speedy and public trial; to meet the witnesses face to face and to have compulsory process to
secure the attendance of witness in his behalf;
逃 സ䭞- ̡̡58261സ䭞- ̡̡
Freedom from being compelled to be a witness against one’s self, or from being forced to confess guilt, or from being
induced by a promise of immunity or reward to make such confession, except when the person confessing becomes a
state witness;
逃 സ䭞- ̡̡58262സ䭞- ̡̡
Freedom from excessive fines or cruel and unusual punishment, unless the same is imposed or inflicted in accordance
with a statute which has not been judicially declared unconstitutional; and freedom of access to the courts.
In any of the cases referred to in this article, whether or not the defendant’s act or omission constitutes a
criminal offense, the aggrieved party has the right to commence an entirely separate and distinct civil action for
damages and other relief. Such civil action shall proceed independently of any criminal prosecution (if the latter be
instituted), and may be proved by a preponderance of evidence.

4
 5
The indemnity shall include moral damages. Exemplary damages may also be adjudicated. The
responsibility herein set forth is not demandable from a judge unless his act or omission constitutes a violation of the
Penal Code or other penal statute.

Article 34: When a member of a city or municipal police force refuses or fails to render aid or protection to any
person in case of danger to life or property, such peace officer shall be primarily liable for damages and the city or
municipality shall be subsidiarily responsible therefore. The civil action herein recognized shall be independent of the
criminal proceedings and a preponderance of evidence shall suffice to support such action.

Article 35: When the person claiming to be injured by a criminal offense, charges another with the same, for
which no independent civil action is granted in this Code or any special law, but the justice of peace finds no reasonable
grounds to believe that a crime has been committed, or the prosecuting attorney refuses or fails to institute criminal
proceedings, the complainant may bring a civil action for damages against the offender. Such civil action may be
supported by a preponderance of evident. Upon he defendant’s motion, the court may require the plaintiff to file a bond
to indemnify the defendant in case the complaint should be found to be malicious. If during the pendency of the civil
action, an information should be presented by the prosecuting attorney, the civil action shall be suspended until the
termination of the criminal proceedings.

B. NOMINAL DAMAGES (Articles 2221-2223)

Article 2221 - Nominal damages are adjudicate in order that a right of the plaintiff, which has been violated or invaded
by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him.

Article 2222 - The court may award nominal damages in every obligation arising from any source enumerated in Article
1157, or in every case where any property right has been invaded.

Article 2223 - The adjudication of nominal damages shall preclude further contest upon the right involved and all
accessory questions as between the parties to the suit or their respective heirs and assigns.

Nominal damages are granted as there are instances when the vindication or recognition of the plaintiff’s right
is of utmost importance to him as in the case of trespass upon real property.

If compensatory and exemplary damages have been awarded, this award is by itself a judicial declaration that
the plaintiff’s right has been violated. Therefore a further ward of nominal damages, is unnecessary and improper. It
should be remembered that nominal damages are merely for the VINDICATION of a right that has been violated, not for
the indemnification of the loss suffered.

The assessment of nominal damages is left to the discretion of the court, according to the circumstances of the
case. An award of nominal damages precludes the recovery of actual, moral, temperate or moderates damages, In fact,
nominal damages may be awarded although plaintiff is not entitled to actual, oral, temperate or exemplary damages.

C. TEMPERATE OR MODERATE DAMAGES (Articles 2224-2225)

Article 2224 - Temperate or moderate damages, which are more than nominal but less than compensatory damages,
may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the
nature of the case, be proved with certainty.

Explanation: There are cases where from the nature of the case, definite proof of pecuniary loss cannot be offered,
although the court is convinced that there has been such loss. For instance, injury to one’s commercial credit or goodwill
of a business firm is often hard to show with certainty in terms of money. Now the query is should damages be denied
on this reason? In this instance, the court should be empowered to calculate moderate damages in such cases, rather
than that the plaintiff should suffer, without redress, from the defendant’s wrongful act.

Article 225: Temperate damages must be reasonable under circumstances.

What is reasonable is a question of fact, depending to the relevant circumstances.

D. LIQUIDATED DAMAGES (Articles 2226-2228)

Article 2226 - Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach
thereof.

In effect, liquidated damages and penalty are the same. Neither requires proof of actual damages. After all,
they had been previously agreed upon.

Article 2227 - Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they
are iniquitous or unconscionable.

Article 2228 - When the breach of the contract committed by the defendant is not the one contemplated by the parties
in the agreeing upon the liquidated damages, the law shall determine the measure of damages, and not the stipulation.

E. EXEMPLARY OR CORRECTIVE DAMAGES (Articles 2229-2235)

5
 6
Article 2229- Exemplary or corrective damages are imposed, by way of example or correction, for the public good, in
addition to moral, temperate, liquidated or compensatory damages.

Exemplary damages are also called as “punitive” damages. They are required by public policy for wanton acts
must be suppressed.

In the absence of moral, temperate, liquidated or compensatory damages, no exemplary damages can be
granted, for exemplary damages are allowed only in addition to any of the four kinds of damages mentioned.

Exemplary damages are designed to provide example or correction for the public good.

Examples:

1. A corporation which persisted in oppressively invading another’s rights despite cease and desist orders from
the Public Service Commission. The imposition of exemplary damages would be a reminder that economic power will
never justify a reckless disregard of the rights of others.

2. . Exemplary damages may be awarded if the dismissal is effected in a wanton, oppressive or malevolent
manner. (Lopez vs. NLRC, 297 CCRA 508)

Exemplary damages may be imposed as part of the civil liability in criminal offenses$ ghen the cbime committed
is accompanied with one or more aggrabating circumstanaes. Ip is sepapate and distinct from t`e odher damages op
fine the offgndeb has to pay (Arp. 2230). It can alcg be franted in quasi-delicts in base dEfendant acted with gross
negligenae (Art. 2031)!ajd in aont`aatq ajd quasi codtractc, if the `efendant acted an a"wenton, fraudulent, rackless,
gppressive or malevolent manner (Art. 2232).

Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should
be adjudicate. (Art. 2233)