BUSI
NESS
TEMP
LATE
CAPACITY TO BUY & SELL
BUSI
NESS
TEMP
LATE
ARTICLE 1489.
All persons who are authorized in this Code to obligate themselves, may enter into
a contract of sale, saving the modifications contained in the following
[Link] necessaries are those sold and delivered to a minor or other person
without capacity to act, he must pay a reasonable price [Link] are
those referred to in article 290. (1457a)
Persons Who May Enter Into a Contract of
Sale
As a general rule, all persons, whether natural or
juridical, who can bind themselves, have the legal
capacity to buy and sell.
Kinds of Incapacity
• Absolute Incapacity
• Relative Incapacity
1. Absolute Incapacity – pertains to persons who cannot bind themselves
(a) Minor
(b) Insane or demented persons
(c) Deaf-mutes who do not know how to read and write
Contracts entered into by a minor and other incapacitated persons are
voidable.
However, where the ***necessaries are sold and delivered to him without the
intervention of the parent or guardian, he must pay a reasonable price
therefor. The contract is therefore valid, but the minor has the right to
recover any excess above a reasonable value paid by him.
*** Necessaries—those things which are needed for sustenance, dwelling,
clothing and medical attendance, in keeping with the financial capacity of
the family of the incapacitated person.
• Sale of real property by minors who have already passed the ages of
puberty and adolescence and are now in the adult age, when they
pretended to have already reached their majority, while in fact they
have not, is valid, and they cannot be permitted afterwards to excuse
themselves from compliance with the obligations assumed by them or
to seek their annulment. This is in accord with the doctrine of estoppels.
2. Relative Incapacity – where it exists only with reference to
certain persons or class ofproperty (Art. 1490-1491). The
prohibition extends to sales by virtue of legal
redemption,compromises, and renunciations.
ARTICLE 1490. The husband and the wife cannot sell property toeach other, except:
(1) When a separation of property was agreed upon in the marriage settlements; or
(2) When there has been a judicial separation of property under article 191.
(1458a)
The Court decided that sale between common law spouses is null and void
because Art.1490 prohibits sales between spouses to prevent the exercise of
undue influence by one spouse over the other, as well as to protect the institution
of marriage. The prohibition applies to a couple living as husband and wife without
the benefit of marriage, otherwise, the condition of those incurred guilt would turn
out to be better than those in legal union.
REASON FOR THE RULE
To prevent commission of fraud or prejudice to third persons
To prevent one from unduly influencing the other
To avoid indirect donations
ARTICLE 1491. The following persons cannot acquire by purchase,
even at a public or judicial auction, either in person or through the
mediation of another:
(1) The guardian, the property of the person or persons who may be under
his guardianship;
(2) Agents, the property whose administration or sale may have been
intrusted to them, unless the consent of the principal has been given;
(3) Executors and administrators, the property of the estate under
administration;
(4) Public officers and employees, the property of the State or of any
subdivision thereof, or of any government-owned or controlled
corporation, or institution, the administration of which has been
intrusted to them; this provision shall apply to judges and government
experts who, in any manner whatsoever, take part in the sale;
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the
administration of justice, the property and rights in litigation or levied
upon an execution before the court within whose jurisdiction or territory
they exercise their respective functions; this prohibition includes the act
of acquiring by assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in which
they may take part by virtue of their profession;
(6) Any others specially disqualified by law. (1459a)
(a) Guardian – as to the property of his ward
(b) Agents – as to the property whose administration or sale has been entrusted to them,
unless consent of the principal is given
(c) Executors or administrators – as to the state under their administration
(d) Public officers and employees – as to the property of the State or any subdivision
thereof,or of the government-owned or controlled corporations, the administration of which
is entrusted to them
Judges and government experts who take part in the sale of the property and rights under
litigation
• The prohibition is based on the fiduciary relationship (based on trust), to prevent
fraud and undue and improper influence.
• With respect to (b) to (d), the sale shall only be voidable because in such cases only
private interests are affected. The defect can be cured by ratification by the seller.
With respect to (e) and (f), the sale shall be null and void, public interests being
involved therein.
(e) Aliens who are disqualified to purchase private agricultural lands under Art.
XII, Secs.
3 and 7 of the Constitution
(f) Unpaid seller having a right of lien or having stopped the goods in transit
(g) Officer holding the execution or his deputy
ARTICLE 1492. The prohibitions in the two preceding articles are
applicable to sales in legal redemption, compromises and renunciations. (n)
