NATURAL OBLIGATIONS

Article 1423: The Foundation

This is the core article. It defines two types of obligations:

● Civil Obligations: These are enforceable by law. If someone breaks a promise under a civil
obligation, you can take them to court.
● Natural Obligations: These are based on morality and fairness, not on positive law. You can't sue
someone for not fulfilling a natural obligation, but if they do fulfill it, they can't later change their
mind and ask for their money or property back.

Articles 1424-1430: Specific Scenarios

These articles provide examples of natural obligations:

● Article 1424: Prescribed Debt Voluntarily Paid

○ If you owe someone money, but the legal deadline to collect has passed, and you still pay
them, you can't later demand that money back.
● Article 1425: Debt Paid by a Third Party
○ If someone else pays your debt without your knowledge, and you later reimburse them, you
can't get that reimbursement back.
● Article 1426: Minor's Contract Annulled
○ If a young person (18-21 years old) makes a contract without parental consent, and it's later
cancelled, they can voluntarily return what they received, but can't demand it back.
● Article 1427: Minor's Voluntary Payment
○ If a young person (18-21 years old) makes a payment on a contract without parental
consent, they can't get that money back if the other party spent it in good faith.
● Article 1428: Voluntary Performance After Losing a Lawsuit
○ If you lose a lawsuit, but still fulfill the obligation, you can't ask for compensation.
● Article 1429: Heir Paying Decedent's Debt
○ If an heir voluntarily pays off more of the deceased's debts than they inherited, they can't
undo that payment.
● Article 1430: Payment Under a Void Will
○ Even if a will is invalid, if an heir follows its instructions and pays a legacy, that payment is
final.

Key Points to Remember

● Equity and Natural Law: Natural obligations are rooted in ideas of fairness and morality, not just
legal rules.
● No Legal Enforcement: You can't take someone to court to force them to fulfill a natural
obligation.
● Irrevocability: Once a natural obligation is voluntarily fulfilled, it can't be undone.

ESTOPPEL
Article 1431: The Core Principle

● In Essence: Estoppel prevents someone from contradicting a previous statement or action if

another person has relied on it to their detriment.
● Example: If Ana tells Ben she owns a car and Ben buys it from her, Ana can't later claim she didn't
own the car to get it back.

Article 1432: Compatibility with Other Laws

● In Essence: The concept of estoppel is generally accepted in Philippine law, as long as it doesn't
clash with other specific laws or codes.
● Example: Estoppel can't be used to override a clear provision in a contract or a specific law related
to property rights.

Article 1433: Types of Estoppel

 ● In Essence: Estoppel can be created by actions (estoppel in pais) or by a formal document
(estoppel by deed).
● Example:
○ In pais: A landlord who consistently accepts late rent payments may be estopped from
suddenly enforcing a strict on-time payment policy.
○ By deed: A signed contract stating a property is free of liens can create estoppel if the seller
later tries to claim otherwise.

Article 1434: After-Acquired Title

● In Essence: If someone sells something they don't actually own, but later acquire ownership, the
title automatically transfers to the buyer.
● Example: Carlos sells land to Dave, even though the land belongs to Elsa. If Carlos later inherits
the land from Elsa, the ownership automatically passes to Dave.

Article 1435: Acting as an Agent

● In Essence: If you sell something on behalf of someone else, you can't later claim it was actually
yours to invalidate the sale.
● Example: Fatima sells a house as Gerry's agent. She can't later say, "Actually, the house was
mine," to get it back from the buyer.

Article 1436: Lessees and Bailees

● In Essence: People who rent (lessees) or temporarily hold property (bailees) can't claim ownership
against the actual owner.
● Example: A tenant can't claim to own the apartment they're renting just because they've lived
there for a long time.

Article 1437: Misrepresentation in Immovable Property

● In Essence: This outlines a specific type of estoppel where someone is tricked into a real estate
deal due to fraudulent information about ownership.
● Example: Hector lies to Irene about owning a farm, leading her to buy it. Hector is estopped from
later claiming he was the true owner.

Article 1438: Allowing Apparent Ownership

● In Essence: If you let someone else act like they own your property, and they use it as collateral,
you can't reclaim it if the loan defaults.
● Example: Javier lets Karl pretend to own Javier's jewelry so Karl can get a loan. If Karl defaults,
Javier can't take the jewelry back from the lender.

Article 1439: Limited Effect

● In Essence: Estoppel only affects the specific people involved in the situation or their legal
successors (like heirs).
● Example: If Leo is estopped from claiming ownership of a boat he sold to Maria, Leo's son can't
later claim ownership either.

CHAPTER 1: GENERAL PROVISIONS

Article 1440: Definitions

● Trustor: The person who creates the trust and transfers property into it. Think of them as the
"originator" or "settlor" of the trust.
● Trustee: The person or entity who holds and manages the trust property for the benefit of the
beneficiary. They have a fiduciary duty, meaning they must act in the best interests of the
beneficiary.
● Beneficiary: The person who receives the benefits of the trust property. This could be financial
support, access to property, or other benefits as defined by the trustor.

Example: A grandparent (trustor) sets up a trust fund for their grandchild (beneficiary), naming a bank
(trustee) to manage the investments.

Article 1441: Types of Trusts

 ● Express Trusts: Created intentionally and explicitly by the trustor through a written or oral
declaration.
● Implied Trusts: Created by law, often to prevent unjust enrichment or correct a wrong. These can
arise even without an express declaration from the trustor.

Example: An express trust might be established through a written will, while an implied trust could arise if
someone mistakenly transfers property to the wrong person.

Article 1442: Application of Trust Law

Philippine trust law incorporates principles from the general law of trusts, as long as they don't conflict
with the Civil Code, Code of Commerce, Rules of Court, or special laws. This provides flexibility and
allows courts to draw upon established trust principles from other jurisdictions.

CHAPTER 2: EXPRESS TRUSTS

Article 1443: Formality Requirements

Express trusts concerning immovable property (land and buildings) or any interest in them must be in
writing to be enforceable. This is known as the Statute of Frauds requirement.

Article 1444: Creation of Express Trusts

No specific wording is required to create an express trust, as long as the intention to create a trust is clear.
This allows for flexibility in drafting trust instruments.

Article 1445: Acceptance by Trustee

If a designated trustee declines the role, the trust doesn't automatically fail. The trust instrument can
provide for an alternate trustee or a mechanism for appointing a new one.

Article 1446: Acceptance by Beneficiary

Acceptance by the beneficiary is generally required for a trust to be valid. However, if the trust imposes no
burdens on the beneficiary, acceptance is presumed unless there is evidence to the contrary.

Absolutely! Let's delve into Chapter 3 of the Philippine Civil Code on Implied Trusts for our law student:

CHAPTER 3: IMPLIED TRUSTS

Article 1447: Non-Exhaustive List

This article makes it clear that the Civil Code's enumeration of implied trusts isn't the end-all-be-all. Other
implied trusts can be recognized based on the general principles of trust law, as long as they don't
contradict existing Philippine laws (Article 1442). This flexibility allows the legal system to adapt to new
situations.

Art. 1448: Purchase Money Resulting Trust - When one person pays for property but puts it under
another's name, a trust is presumed for the one who paid, unless it's for a child (presumed gift).
Example: A parent buys land but registers it under their adult child's name. This is a trust unless
proven to be a gift.
Art. 1449: Donation with No Beneficial Interest - When someone receives a donation but is meant to
hold it for someone else's benefit, they are a trustee for that beneficiary.
Example: A charity receives a donation with instructions to use it for a specific project.
Art. 1450: Security Trust - When property is used as collateral for a loan, the lender becomes a trustee
holding the property for the borrower's benefit until the debt is paid.
Example: A mortgage on a house creates a security trust.
Art. 1451: Trust by Succession - If someone inherits property but has it titled under another's name, a
trust is created for the true owner (the heir).
Example: An heir inherits land but registers it under their sibling's name.
Art. 1452: Purchase by Common Agreement - When several people agree to buy property together but
put it under one person's name, that person becomes a trustee for the others' shares.
Example: Friends pool money for a vacation home, but only one is on the deed.
Art. 1453: Trust by Declaration - If someone receives property based on their promise to hold it for
another, they become a trustee for that person.
Example: A friend holds onto a valuable item while you're out of the country, promising to return it.
Art. 1454: Trust to Secure Obligation - When property is transferred to guarantee a debt, the creditor
becomes a trustee until the debt is paid.
Example: A guarantor pledges their assets to back up a loan.
Art. 1455: Trust by Misappropriation - If a fiduciary (trustee, guardian, etc.) uses trust funds to buy
property under their or another's name, they are a trustee for the rightful owner of the funds.
Example: A guardian uses a ward's money to buy a car.
Art. 1456: Constructive Trust - If someone acquires property through mistake or fraud, they are
considered a trustee for the person who should rightfully own it.
Example: Someone forges a deed to steal land; they become the constructive trustee.

Article 1457: Oral Evidence Allowed

Unlike express trusts over immovable property (which require writing), implied trusts can be proven by oral
evidence. However, strong and trustworthy evidence is needed as these cases can be easily fabricated.