Sales-C2-S3
Capacity to Buy and Sell
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 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. (1457a)
Incapacity to Buy may be Absolute or Relative
a. Absolute incapacity
– when party cannot bind himself in any case.
b. Relative incapacity
– when certain person, under certain circumstances, cannot buy certain
property. (Wolfson v. Estate of Martinez)
Note: Among people relatively incapacitated are those mentioned in
Arts. 1490 and 491, Civil Code.)
Purchase by Minors
 When minors buy, the contract is generally voidable, but in the case of
necessaries, “where necessaries are sold and delivered to a minor or other
person without capacity to act, he must pay a reasonable price therefor.
Necessaries
– include everything that is indispensable for sustenance, dwelling,
clothing, and medical attendance, according to the social position of the
family.
Support
– also includes education of the person entitled to be supported until he
completes his education or training for some profession, trade, or
vocation, even beyond the age of majority.” (Art. 290, Civil Code)
Husbands
Under this Code, the husband may sell, alienate, or encumber, even without
the consent of his wife, his exclusive property acquired before the effectivity
of the Civil Code. The wife cannot even ask for the annulment of the sale on
the ground that it is in fraud of her rights when the purpose of the transaction
is to benefit the family, that is, to raise money for a business venture. (See
Arts. 166 and 173 of the Code)
 If the deed of sale of the land lists as purchasers both the husband and the
wife, the presumption is that it is paraphernal property. (Castillo v.
Castillo)
 If a Filipino sells a parcel of land to a Chinese who later sells the same to
another Filipino, the second sale is VALID because the purpose of the
Constitution of preserving the land in favor of Filipinos has not been
frustrated.
ARTICLE 1490:
The husband and the wife cannot sell property to each
other, except:
(1) When a separation of property was agreed upon in the
marriage settlements; or
(2) When there has been a judicial separation or property
under Article 191. (1458a)
NOTE: Under these two exceptions, the sale is generally valid, but of
course, should there be vitiated consent (as in the case of undue
influence) the sale is voidable.
 Just as a married couple cannot generally sell to each other, they also
generally cannot donate to each other. This prohibition also applies to
common-law husband and wife on the theory that here there can be an
even greater degree of undue influence.
Reason why Generally a Husband and Wife cannot Sell to Each Other
1. To avoid prejudice to third persons;
2. To prevent one spouse from unduly influencing the other;
3. To avoid by indirection the violation of the prohibition against donations.
Effect of Sale
 Generally, a sale by one spouse to another is void. However, not
everybody can assail the validity of the transaction.
(Thus creditors who became such after the transaction cannot assail its
validity for the reason that they cannot be said to have been prejudiced. But
prior creditors (creditors at the time of transfer) as well as the heirs of either
spouse may invoke the nullity of the sale.
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 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 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)
This article refers to relative incapacity.
Reason for the Law
 Public policy prohibits the transactions in view of the fiduciary
relationship involved.
Purchase Thru Another
“Thru the mediation of another”
- this must be proved, that is, that there was really an agreement between
the intermediary and the person disqualified; otherwise, the sale cannot
be set aside. (Rodriguez v. Mactual)
Purchase by Agent for Himself
- An agent is not allowed, without his principal’s permission, to sell to
himself what he has been ordered to buy; or to buy for himself what he has
been ordered to sell. (Moreno v. Villones)
- The fiduciary relations between them estop the agent from asserting a
title adverse to that of the principal. And therefore such a sale to himself
would be ineffectual and void, because it is expressly prohibited by law.
The agent may, of course, buy after the termination of the agency.
NOTE: Under Art. 1459 of the old Civil code, an agent or administrator was
disqualified from purchasing property in his hands for sale or management.
However, under Art. 1491 of the new Civil Code, this prohibition was
modified in that the agent may now buy the property placed in his hand for
sale or administration, provided the principal gives his consent thereto.
Purchase by Attorney
A lawyer is not allowed to purchase the property of his client which is in
litigation. To do otherwise would be a breach of professional conduct, and
would constitute malpractice.
But assigning the amount of judgment by the client to his attorney, who did
NOT take any part in the case where said judgment was rendered, is valid.

When a thing is said to be in litigation
A thing is said to be in litigation not only if there is some contest or litigation
over it in court, but also from the moment that it became subject to the judicial
action of the judge.
 Art. 1491 does not prohibit a lawyer from acquiring a certain percentage
of the value of the properties in litigation that may be awarded to his
client. A contingent fee based on such value is allowed.
If however the attorney participates in the sale, not as buyer but as agent for
the buyer, there is no violation of the law.
Meaning of “Any others specially disqualified by law”
This refers to prohibited by reason of the fiduciary relationship involved.
 Aliens though not allowed to buy land under the Constitution, they do
not fall under the above phrase. Thus, while those disqualified under Art.
1490 and 491 may not become lessees (Art. 1646), still aliens may
become lessees even if they cannot buy lands.
Status of the Sale
Generally, sales entered into in disregard of the prohibition under this article
are not void. They are merely voidable. (Wolfson v. Estate of Martinez)
ARTICLE 1492:
The prohibitions in the two preceding articles are
applicable to sales in legal redemption, compromises and
renunciations.
Applicability of Relative Incapacity to Legal Redemption,
Compromises, and Renunciation
Example:
If a ward’s property is sold, the guardian, even if he be an adjacent owner, and
even if all the other requisites for legal redemption are present, cannot
exercise the right of legal redemption.
Cross Reference
Legal Redemption
– the right to be subrogated upon the same terms and conditions stipulated
in the contract. (Art. 1619, Civil Code)
Compromises
– Contract whereby the parties, by making reciprocal concessions, avoid a
litigation or to put an end to one already commenced. (Art. 2028, Civil
Code)
Renunciation
– rights may be waived, unless the waiver is contrary to law, public order,
public policy, morals or good customs or prejudicial to a third person
with right recognized by law. (Art. 6, Civil Code)
Renunciation
- condonation or remission is essentially gratuitous and requires the
acceptance by the obligor. May be made expressly or impliedly. (Art.
1270, Civil Code)
Sales-C2-S3
Capacity to Buy and Sell
CHAPTER 3
EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS
BEEN LOST
ARTICLE 1493:
If at the time the contract of sale is perfected, the thing
which is the object of the contract has been entirely lost, the
contract shall be without any effect.
But if the thing should have been lost in part only, the
vendee may choose between withdrawing from the contract
and demanding the remaining part, paying its price in
proportion to the total sum agreed upon. (1460a)
Lost of the object before sale
- This refers to a case of loss of the object even before the perfection of the
contract. It is evident that there would be no cause or consideration;
hence, the contract is void. Observe that it is the seller here who naturally
will have to bear the loss.
Complete Loss Distinguished from Partial Loss
When the object has been Partly or Partially Lost
REMEDIES:
1. Withdrawal or rescission.
2. Specific performance as to remainder by payment of proportional price.
ARTICLE 1494:
Where the parties purport a sale of specific goods, and the
goods without the knowledge of the seller have perished in
part or have wholly or in a material part so deteriorated in
quality as to be substantially changed in character, the
buyer may at his option treat the sale:
(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof
as have not deteriorated, and as binding the buyer to pay the
agreed price for the goods in which the ownership will pass,
if the sale was divisible.
Loss of Specific Goods
This article practically reiterates the principle involved in the preceding
article.s
REMEDIES:
1. Cancellation (avoidance);
2. Specific performance as to the remaining existing goods. (if the sale was
divisible).