Chapter 2 Capacity To Buy or Sell

CHAPTER 2
CAPACITY TO BUY AND SELL
Art. 1489. All persons who are authorized in this Code to obligate themselves, may enter into
a contract of sale, saving the modifications obtained in the following articles.
Where necessaries are those sold and delivered to a minor or other person without
capacity to act, he must pay a reasonable price therefor. Necessaries are those referred to in
Article 290.
General rule:
All persons, whether natural or juridical, who can bind themselves, have legal capacity
to enter into a contract of sale.
Exception:
Persons who are incapacitated.
Kinds of Incapacity
1. Absolute Incapacity
These are the persons who cannot enter into a contract of sale in all circumstances;
otherwise the contract of sale is defective, either voidable or unenforceable.
Example:
Minors, insane, demented person, and deaf-mutes who do not know how to write.
2. Relative Incapacity
These are certain persons, under certain circumstances, cannot buy certain property.
Examples:
a. Husband and wife;
b. The guardian, the property of the person or persons who may be under this
guardianship;
c. Agents, the property whose administration or sale may have been entrusted to them,
unless the consent of the principal has been given;
d. Executors and administrators, the property of the estate under administration;
e. 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 instructed to them;
f. Justice, 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;
What are necessaries?

These covers everything indispensable for sustenance, dwelling clothing, medical
attendance, education and transportation.
Art. 1490. The husband and the wife cannot sell property to each other except;
1. When separation of property was agreed upon in the marriage settlements; or
2. When there has been a judicial separation of property under Article 191.
General rule:
The husband and the wife cannot sell property to each other.
Exception:
1. When separation of property was agreed upon in the marriage settlements; or
2. When there has been a judicial separation of property under Article 191.
Note: The proscription against sale of property between spouses applies even to common
law relationships.
Art. 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 entrusted 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 State or of any subdivision thereof, or of any
government-owned or controlled corporation, or institution, the administration of
which has been in trusted 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. (1459)
Note: In contract of agency, after the termination of the relationship, the agent is not
ptphobited to purchase a property belonging to the former principal.
Note: Article 1491 (5) of the Civil Code prohibits lawyers from acquiring by purchase or
assignment the property or rights involved which are the object of the litigation in which
they intervene by virtue of their profession. The prohibition applies only during the
pendency of the suit and generally does not cover contracts for contingent fees where the
transfer takes effect only after the finality of a favorable judgment.
A contingent fee contract is an agreement in writing where the fee, often a fixed
percentage of what may be recovered in the action, is made to depend upon the success of
litigation. The payment of the contingent fee is not made during the pendency of the
litigation involving the client’s property but only after the judgment has been rendered in
the case handled by the lawyer.
NOTE: The above disqualification imposed on public and judicial officers and lawyers is
grounded on public policy considerations which disallow the transactions entered into by
them, whether directly or indirectly, in view of the fiduciary relationship involved, or the
peculiar control exercised by these individuals over the properties or rights covered.
Art. 1492. The prohibitions in the two preceding articles are applicable to sales in legal
redemption, compromises and renunciations.
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 and unduly enrich himself at the expense of his client.
The case of In re: Ruste illustrates the significance of the aforementioned prohibition. In
that case, the attorney acquired his client’s property subject of a case where he was acting
as a counsel pursuant to a deed of sale executed by his clients because they had no money
to pay him or his services. The Court that the lawyer’s acquisition of the property of his
clients under the circumstances obtaining therein rendered him liable for malpractice. The
court held:
…Whether the deed of sale in question was executed at the instance of the spouses
driven by financial necessity, as contented by the respondent, or at the latter’s behest, as
contented by the complainant, is of no moment. In either case an attorney occupies a
vantage position to press upon or dictate his terms to a harassed client, in breach of the
“rule so amply protective of the confidential relations, which must necessarily exist
between attorney and client, and of the rights of both”?

Chapter 2 Capacity To Buy or Sell

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 2 Capacity To Buy or Sell

Uploaded by

Copyright:

Available Formats

CHAPTER 2

CAPACITY TO BUY AND SELL

What are necessaries?

You might also like