1390:

Ang mga sumusunod na kontrata ay walang bisa , kahit na walang danyos sa

mga nagkasundong panig:
1) Kung isa sa mga panig ay walang kakayahang  magbigay ng pahintulot sa
kontrata.
2) Kung saan ang pahintulot ay may kamalian, karahasan, pananakot at hindi
karapat-dapat na impluwensiya o pandaraya.
Ang mga kontratang ito ay mabisa, maliban kung pinapawalang-bisa ng akmang
pagsampa sa korte. Madaling ikiling ang mga pagbabago nito.

1391
Ang hakbang para sa pagpapawalang bisa ay dapat gawin sa loob ng apat na taon.

Ito ay magsisimula, sa kaso ng intimidasyon, dahas o hindi tamang pag

impluwensya, mula sa oras ng depekto ng pagpayag ay natapos.

Sa kaso ng pagkakamali o panloloko, magsimul ng oras ng pagka diskubre ng

pagkakamali o panloloko.

At kapag ang hakbang ay patukoy sa kontratang pinasok ng mga menor de edad o

mga taong may kapansanan, mag simula sa oras na ang guardianship ay natapos.

Discussion:

This article only applies to the parties in the contract. It does not apply to a third
person when the law allows them to question the validity of a contract.

Failure to pursue an action within the period prescribed by law will have the effect of
extinguishing the action.

With regard to fraudulent conveyances with the Registry of Property, the prescriptive

period is counted not from the actual knowledge of the fraud by the plaintiff but from
the registration of the public document with the said registry.  The act of registration
is a notice to the whole world.  It is the operative acts that binds registered lands under
the

Facts: Petitioner M was forced, “through threats and intimidation,’’ to sell at a grossly
low price his three parcels of land located near Malacañang during the height of
Martial Law to Development Bank of the Philippines (DBP) which, in turn, sold it to
the Government, through the Office of the President. After the late President Marcos
left the country on February 14,1986 after the EDSA Revolution M made repeated
extrajudicial demands upon respondents for the return and reconveyance of subject
properties to them, the last being the demand letters dated October 24, 1989. On
March 23, 1990, M filed a complaint for annulment of sale, reconveyance and
damages against respondents.

Issue: Has the action for annulment of the contract of sale prescribed?

Held: Yes. (1) Alleged threat and intimidation ceased when Marcos left on February
24, 1986. — “Since an action for the annulment of contracts must be filed within four
years from the time the cause of vitiation ceases, the suit before the trial court should
have been filed anytime on or before February 24, 1990. In this case, petitioner did so
only on March 23, 1990. Clearly, his action had prescribed by then.’’

1392
Ang pagpapatibay ay mawawala ang aksyon upang mapawalang bisa ang isang
kontrata.

1. Confirmation – to cure a defect in a voidable contract.

2. Ratification– to cure the defect of lack of authority in an authorized
contract (entered into by another).
3. Acknowledgment– to remedy a deficiency of proof (thus, an oral loan
may be put in writing, or when a private instrument is made a public
instrument).

Requisites of Ratification to be effective:

1. There must be a voidable or annulable contract.

2. Ratification is made with the knowledge of the cause of nullity.
3. At the time of ratification, the cause of nullity has already ceased.
4. The ratifying party is the injured party, or the prejudiced party.
5. The ratification is accomplished expressly or impliedly by a waiver of
action to annul.

The right to ratify is transferrable to the heirs of the party who has the right to ratify.

ARTICLE. 1390.

The following contracts are voidable or annullable, even though there may have been no damage to the
contracting parties:

(1) Those where one of the parties is incapable of giving consent to a contract;

(2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of
ratification. (n)

Meaning of voidable contracts. Voidable or annullable contracts are those which possess all the
essential requisites of a valid contract but one of the parties is legally incapable of giving consent, or
consent is vitiated by mistake, violence, intimidation, undue influence, or fraud.
1 Thus, there are only two (2) types of voidable contracts. Binding force of voidable contracts. They are
existent, valid and obligatory unless annulled or set aside by a proper action in court, i.e., an action
instituted for that purpose. Once ratified, they become absolutely valid and can no longer be annulled.
(see comments under Arts. 1327, 1328, 1330.)

The existence of damage is not essential for their annulment as in the case of rescissible contracts.
Meaning of annulment. Annulment is a remedy as well as a sanction provided by law, for reason of
public interest, for the declaration of the inefficacy of a contract based on a defect or vice in the consent
of one of the contracting parties in order to restore them to their original position in which they were
before the contract was executed.

Differences between action for annulment and action for rescission. They are the following:

(1) The first is based on vitiation of consent (Art. 1390.), while the second, on lesion to one of the
parties or to a third person (Art. 1381.)

(2) The first may be brought only by a party to the contract (Arts. 1390, 1397.), while the second, also by
a third person who suffered damage by reason of the contract (Art. 1381.);

(3) The first is a principal action (Art. 1390.), while the second is merely subsidiary (Art. 1383.);

(4) The first presupposes that the contract is legally defective (Art. 1390.), while the second, that the
contract was validly entered into (Art. 1380.);

(5) The first seeks the imposition of sanction by law on the guilty party for reason of public interest
(Ibid.), while the second, is a remedy allowed by law on ground of equity (see Art. 1383.)

(6) The first is allowed even if the plaintiff has been indemnified (see Art. 1390.), while the second is
barred by such indemnification (Arts. 1383, 1384.)

ARTICLE. 1391. The action for annulment shall be brought within four years. This period shall begin: In
cases of intimidation, violence or undue influence, from the time the defect of the consent ceases. In
case of mistake or fraud, from the time of the discovery of the same. And when the action refers to
contracts entered into by minors or other incapacitated persons, from the time the guardianship ceases.
(1301a)

Period for filing action for annulment. Direct court action is necessary to annul a voidable contract, and
until annulled or set aside by the court, a party cannot relieve himself from the obligations arising
therefrom. A voidable contract may be collaterally attacked by way of defense to an action under the
contract. The four-year period for bringing an action for annulment is reckoned:

(1) In case of intimidation, violence, or undue influence, from the time the intimidation, etc.
ceases. Before that time, the consent is still being vitiated and, therefore, the victim
cannot be expected to bring an action in court. The running of the prescriptive period
cannot be interrupted by an extrajudicial demand made by the party whose consent
was vitiated.

(2) In case of mistake or fraud, from the time it is discovered.

2 This must be so because before the time of discovery, the innocent party is unaware
of the reason which renders the contract voidable (Art. 1393.) and cannot also be
expected to bring an action in court.

Furthermore, the guilty party should not be rewarded for successfully hiding the
mistake or fraud. The time of the discovery of the alleged mistake or fraud must be clear
from the allegations of the complaint. In the case of contracts entered by minors or
 other incapacitated persons, from the time the guardianship ceases. In the case of a
minor, guardianship ceases upon reading the age of majority. An incapacitated person
has no capacity to sue.

A voidable contract, like unenforceable and void contracts (infra.), may be attacked
indirectly or collaterally by way of defense. Article 1391 presupposes, however, that no
acquisitive prescription has set in, for after the favorable effects of acquisitive
prescription have set in, rights of ownership over a property are rendered indisputable

ARTICLE. 1392

Ratification extinguishes the action to annul a voidable contract. (1309a) Meaning and effect of
ratification.

(1) Ratification means that one under no disability voluntarily adopts and gives sanction to some
defective or unauthorized contract, act, or proceeding which, without his subsequent sanction or
consent, would not be binding or him. It is this voluntary choice, knowingly made, which amounts
to a ratification of what was theretofore unauthorized and becomes the authorized act of the party
so making the ratification.

(2) Ratification cleanses the contract from all its defects from the moment it was constituted. (Art.
1396.) The contract thus becomes valid. (Art. 1390.) Hence, the action to annul is extinguished.