Natural obligations vs. solutio indebiti

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. (Art. 1423 of the New Civil Code of the Philippines)

Natural obligations are midway between civil obligations and purely moral obligations. It is distinguished from moral in that it produces some juridical effects, but is distinguished from moral in that it does not give rise to an action to compel its performance. (Tolentino)

A natural obligation is an obligation that has no legal basis and hence does not give a right of action to enforce its performance. It is based on equity, morality, and natural law, and should be voluntary. philawgov.wikia.org/wiki/Natural_Obligation.

Payment by mistake by a debtor believing the obligation to be a civil one, may be recovered on the principle of solutio indebiti. (De Leon)

In one case (G.R. No. 126619), Uniwide cited the provisions on solutio indebiti under Arts. 2154 and 2156 of the Civil Code. However, according to the Supreme court, it is not enough to prove that the payments made by Uniwide to Titan were "not due" because there was no prior authorization or agreement with respect to additional works. There is a further requirement that the payment by the debtor was made either through mistake or under a cloud of doubt. In short, for the provisions on solutio indebiti to apply, there has to be evidence establishing the frame of mind of the payor at the time the payment was made.

"Art. 1960. If the borrower pays interest when there has been no stipulation therefor, the provisions of this Code concerning solutio indebiti, or natural obligations, shall be applied, as the case may be."

Under Article 1960 of the Civil Code, if the borrower of loan pays interest when there has been no stipulation therefor, the provisions of the Civil Code concerning solutio indebiti shall be applied. Article 2154 of the Civil Code explains the principle of solutio indebiti. Said provision provides that if something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises. In such a case, a creditor-debtor relationship is created under a quasi-contract whereby the payor becomes the creditor who then has the right to demand the return of payment made by mistake, and the person who has no right to receive such payment becomes obligated to return the same. The quasi-contract of solutio indebiti harks back to the ancient principle that no one shall enrich himself unjustly at the expense of another. The principle of solutio indebiti applies where (1) a payment is made when there exists no binding relation between the payor, who has no duty to pay, and the person who received the payment; and (2) the payment is made through mistake, and not through liberality or some other cause. The Supreme Court has held that the principle of solutio indebiti applies in case of erroneous payment of undue interest. (G.R. No. 173227)