Article 1230: Nullity of the Penal Clause
The nullity of the principal obligation carries with it that of the penal clause. (1155)
It is not uncommon that penal clauses are attached to the principal obligation in order to coerce the debtor to completely and faithfully comply with the terms of the contract. In case when the penal clause is declared or becomes unlawful, the principal obligation shall stand unaffected. In case, however, when the principal obligation is the one that turns out to be null and void, the penal clause goes with it (i.e. the penal clause is also void).
There is a simple reason for this: The penal clause is a mere accessory to the principal obligation. It is a parasite, so to speak, to the principal obligation without which it cannot stand. It is heavily dependent on the principal obligation, so much so that the nullity of the latter also nullifies the former.
A is obliged to deliver 12 bags of kapeng barako to B the day after the following day. Agreed is the penalty to pay Php 100,000 in case of noncompliance. The next day, however, the Congress declared kapeng barako as a prohibited drug. What happens to the penal clause?
The penal clause follows the nullity of the principal obligation to deliver kapeng barako.