CHAPTER 2: CAPACITY TO BUY OR SELL
Art. 1489. All persons who are authorized in territory they exercise their respective
this Code to obligate themselves, may enter functions
into a contract of sale, saving the
modifications contained in the following LIABILITY FOR NECESSARIES OF
articles. MINOR OR OTHER PERSON WITHOUT
Where necessaries are those sold and CAPACITY TO ACT
delivered to a minor or other person without Necessaries
capacity to act, he must pay a reasonable things needed for sustenance,
price therefor. Necessaries are those referred dwelling, clothing, medical
to in Article 290. attendance, education and transporta-
tion (Art. 194, Family Code)
GR: All persons, GR: The contracts
whether KINDS OF INCAPACITY
natural or entered into by a Sale by Minors
juridical, who can bind (1) Absolute minor and other courts
themselves, have legal Incapacity incapacitated persons have ruled
capacity to enter into a the are voidable. (Arts. that
contract of sale. persons 1327,1390) minors
XPN: Persons who are who XPN: Where who
incapacitated. cannot necessaries are sold pretended
enter or and delivered to him to reach
bind themselves into a contract of sale without the majority in
in all circumstances intervention of the real estate
the contract of sale is defective, either parent or guardian, he sales are
voidable or unenforceable must pay a reasonable valid
price therefor. (Art. cannot
Examples: Minors, insane, demented 1489, par. 2) excuse
persons, and deaf-mutes who do not know
how to write NOTE: The contract is,
therefore, valid but the
(2) Relative Incapacity minor has the right to
under certain circumstances, cannot recover any excess
buy certain property above a reasonable va-
exists only with reference to certain lue paid by him.
persons or a certain class of property themselves from obligations or seek
annulment after reaching adult age
Examples:
(a) Husband and wife Art. 1490. The husband and the wife cannot
(b) Guardian - property of the person or sell property to each other, except:
persons who may be under his (1) When a separation of property was
guardianship agreed upon in the marriage
(c) Agents - property whose settlements; or
administration or sale may have been (2) When there has been a judicial
entrusted to them, unless the con-sent separation of property under Article
of the principal has been given 191.
(d) Executors and administrators -
property of the estate under
NOTE: The
administration
RELATIVE
proscription INCAPACITY
against OF HUSBAND
(e) Public officers and employees -
sale of property AND
among WIFE
property of the State or of any
spouses applies even (1) Article 1490
subdivision thereof, or of any go-
to common law prohibits
vernment-owned or controlled
relationships. husband and
corporation, or ins-titution, the
wife from
administration of which has been in-
selling property, making any sale
trusted to them
between them void and in-existent as it is
(f) Justices, judges, prosecuting
expressly prohibited by law.
attorneys, clerks of superior and
(2) The Family Code prohibits husband and
inferior courts and other officers
wife from ma-king donations during
and employees connected with
marriage, except for moderate gifts
the adminis-tration of justice -
during family rejoicing (Art. 87, Family
property and rights in litigation or
Code).
levied upon an execution before the
(3) Marriage settlements or court decrees
court within whose jurisdiction or
allowing pro-perty separation between
CHAPTER 2: CAPACITY TO BUY OR SELL
husband and wife, or judicial separation, apply to lawyers, with respect to the
allow sales between the couple. property and rights which may be the
object of any litigation in which they
REASON FOR PROHIBITION UNDER may take part by virtue of their
ARTICLE 1490 profession.
The law is not based on the husband and (6) Any others specially disqualified by
wife's perso-nalities or sex weakness, but on law.
protecting third parties who rely on property
from either spouse, preventing them from INCAPACITY BY REASON OF RELATION
engaging in ruinous activities. TO PROPERTY
The above article enumerates the persons
PERSONS PERMITTED TO QUESTION who, by reason of the relation of trust with
SALE the persons under their charge or their
(1) Article 1490 prohibits certain transfers peculiar control over the property, are
between hus-band and wife, but can only prohibited from acquiring said property
be exploited by those with a relationship either directly or indirectly and whether in
that interferes with their rights or inte- private or public sale. They are the:
rests. This means that heirs and creditors (1) Guardians
at the time of the transfer can attack the (2) Agents
sale's validity, but not creditors who (3) Executors and administrators
became such after the transaction. (4) Public officers and employees
(2) The government is always involved in (5) Judicial officers, employees and
taxable tran-sactions and can question lawyers
their validity to prevent tax evasion, as (6) Others especially disqualified by law
well as impugnance sales between hus-
band and wife. NOTE: The persons
REASON FOR
disqualified to PROHIBITIONS
buy UNDER
Art. 1491. The following persons cannot referred to inARTICLE
Articles 1491
acquire by purchase, even at a public or 1490 and 1491 are Article 1491
judicial auction, either in person or through also disqualified to disqualifies
the mediation of another: become lessees of the individuals based
(1) The guardian, the property of the things mentioned on public policy
person or persons who may be under thereon. (Art. 1646) considerations,
his guardianship; preventing
(2) Agents, the property whose transactions due to fidu-ciary relationships or
administration or sale may have been control over properties or rights, whe-ther
entrusted to them, unless the consent directly or indirectly, due to their unique
of the principal has been given; control over these rights.
(3) Executors and administrators, the
property of the estate under It also prohibits fraud and undue influence
administration; by indivi-duals, fearing that greed may
(4) Public officers and employees, the overshadow loyalty and disin-terest. The law
property of the State or of any doesn't trust human nature to resist temp-
subdivision thereof, or of any tations arising from antagonism between
government-owned or controlled seller and buyer interests, as greed may
corporation, or institution, the outweigh these feelings.
administration of which has been
entrusted to them; this provision shall
apply to judges and government EFFECT OF SALE IN VIOLATION OF
experts who, in any manner PROHIBITION
whatsoever, take part in the sale; (1) With respect to nos. 1 to 3, the sale shall
(5) Justices, judges, prosecuting only be voi-dable because in such cases
attorneys, clerks of superior and only private interests are affected. The
inferior courts, and other officers and defect can be cured by ratification of the
employees connected with the seller (Arts. 1392-1396)
administration of justice, the property (2) With respect to nos. 4 to 6, the sale shall
and rights in litigation or levied upon be null and void, public interests being
an execution before the court within involved therein (Art. 1409 [1])
whose jurisdiction or territory they
exercise their respective functions; NULLITY OF PROHIBITED CONTRACTS
this prohibition includes the act of DIFFERENTIATED
acquiring by assignment and shall
CHAPTER 2: CAPACITY TO BUY OR SELL
(1) Public Officers, etc., Justices, etc.,
and Lawyers
prohibited contracts have definite,
permanent nul-lity that cannot be
cured by ratification, as public interest
and policy remain paramount,
preventing compromise or ratification,
and their disqualifi-cation is based on
public policy
(2) Guardian, Agents, and
Administrators
the validity of contracts can be
"ratified" through a new contract,
which is determined by the circum-
stances at the time of execution,
according to the prevailing opinion
The validity of a new contract is
unaffected by ceased causes of
nullity, such as the object
becoming lawful in the second
contract, the impossible service
becoming possible, or parties
clarifying their intentions.
The ratification or second contract
can be va-lid from its execution,
but it does not retro-act to the date
of the first contract.
Art. 1492. The prohibitions in the two
preceding articles are applicable to sales in
legal redemption, compromises and
renunciations.
PROHIBITION EXTENDS TO SALES IN
LEGAL REDEMPTION, ETC.
(1) The relative incapacity provided in
Articles 1490 and 1491 applies also to
sales by virtue of legal redemption (Art.
1619), compromises, and renunciations.
(a) Compromise - a contract whereby
the parties, by reciprocal concessions,
avoid a litigation or put an end to one
already commenced (Art. 2028). It is
the amicable settlement of a
controversy.
(b) Renunciation - a creditor gratuitously
abandons his right against his creditor.
The other terms used by the law are
condonation and remission. (Art. 1270)
(2) The persons disqualified to buy referred
to in Articles 1490 and 1491 are also
disqualified to become les-sees of the
things mentioned therein. (Art. 1646)
NOTE: The prohibition
ordained in paragraph
5 of Article 1491 and
Article 1492 is founded
on public policy
because, by virtue of
his office, an attorney
may easily take
advantage of the
credulity and
ignorance of his client
