(6) Object of the contract must not legally be in the possession
RESCISSIBLE CONTRACTS of third persons who did not act in bad faith (Ibid., par. 2);
(Art.1380-Art.1389)
Art.1380 Contracts validly agreed upon may
be rescinded in the cases established by law.
A. Definition
Rescissible Contracts - are valid and enforceable because all
the essential requisites of a contract exist but by reason of
injury or damage to one of the parties or to third persons, such
as creditors, the contract may be rescinded.
Rescission - is a remedy granted by law to the contracting
parties and sometimes even to third persons in order to secure
reparation of damages caused them by a valid contract, by
means of the restoration of things to their condition in which
they were prior to the celebration of said contract.
B. Requisites of Rescission:
(1) Valid contract (Art.1380);
(2) Lesion or pecuniary prejudice to one of the parties or to a
third person (Art.1381);
(3) The rescission must be based upon a case especially
provided by law (Arts. 1380, 1381, 1382.);
(4) No other legal remedy to obtain reparation for the
damage (Art.1383);
(5) Party seeking for rescission must be able to return what he
is obliged to restore (Art.1385 par.1);
and
(7) Period for filing the action must not have lapsed or
prescribed (Art.1389)
Example:
Kara sues Mia for the recovery of a parcel of land. In this case,
the land is a “thing under litigation.” If, during the pendency of
the case, Mia sells the land to a third party without the approval
of Kara or of the court, the sale is rescissible at the instance of
Kara in case she wins in her suit for the recovery of said land
unless the third party is in legal possession of the land in good
faith.
Mutual Dissent:
Question: Suppose the parties to a contract mutually agreed
to cancel the contract, is this “rescission” properly so -called?
ANS: No. Of course, in a loose sense “rescission” may be used
here. But strictly speaking, this is “mutual backing out,” and not
the rescission referred to in Art. 1380 of the new Civil Code. In
mutual withdrawal, it is the will of the parties that constitutes
the basis, whereas in rescission (properly called), it is the law
that constitutes the basis.
C. Nature of Rescission
Rescission is not a principal remedy. It is only subsidiary,
meaning that it can be availed of only if the injured party
proves that he has no other legal means aside from rescinding
the contract to obtain redress for the damage caused.
Question: Is the remedy of rescission subsidiary in nature?
ANS: Yes, for it cannot be instituted except when the party
suffering damage has no other legal means to obtain
reparation for the same.
Extent of Rescission
The entire contract need not be set aside by rescission if the
damage can be repaired or covered by partial rescission. The
rescission shall only be to the extent of the creditor's
unsatisfied credit. The policy of the law is to preserve or respect
the contract, not to extinguish it.
Example:
(1) Gino, the guardian of Mia, a minor was authorized by the
court to sell two parcels of land valued at P200,000.00 each.
Gino sold the two properties to Bitoy for only P200,000.00.
In this case, the entire contract need not be rescinded.
Rescission may properly be applied only to one parcel to cover
the damage caused by Gino. But if Gino or Bitoy is willing to
pay the difference of P200,000.00, rescission is precluded.
(2)Gardo is the guardian of Myrna, a minor. Gardo sells the
₱20,000-worth property of Myrna only ₱15,000. Here, the
contract of sale CANNOT be rescinded because the lesion is NOT
more than 1/4, UNLESS the contract of sale is approved by the
court.
HOWEVER, if the property is sold for less than ₱15,000, Myrna
can rescind the sale by proper action in court upon reaching the
age of majority.
CASES OF RESCISSBLE CONTRACTS
(1) Contracts entered into in behalf of wards. — A ward
is a person under guardianship by reason of some incapacity.
As a rule, the powers of the guardian with respect to the
property of the ward are limited to mere acts of administration.
EXAMPLE:
Gina is the guardian of Wendell (ward). Gina sells the property
of Wendell worth 20M for only 14M. The contract of sale can be
rescinded because the lesion is more than one-fourth. Wendell
can rescind the sale by proper action in court upon reaching the
age of majority.
(2) Contracts agreed upon in representation of
absentees. — An absentee is a person who disappears from
his domicile, his whereabouts being unknown, and without
leaving an agent to administer his property. Likewise, the
absentee must suffer lesion by more than one-fourth of the
value of the property object of the contract to entitle him to the
remedy of rescission.
EXAMPLE:
Wendell, the owner of a resort in Laguna, left his property
without notice and without leaving a representative to take care
of his property.
Bea, a family friend, volunteered in taking over Wendell’s
business. Due to a storm, Wendell’s business is greatly affected
due to destruction of some of the buildings of the resort
and needs additional funds to recover from such distress. Bes
decided to sell one property of Wendell worth 15M and sold it
for only 10M. When Wendell returned, Wendell can rescind the
contract of sale made by Bea because the lesion is more than
one-fourth.
(3) Contracts undertaken in fraud of creditors. — The
action to rescind in fraud of creditors is known as accion
pauliana. Here, the remedy of rescission may be availed of by a
third person. Such contracts are usually made without the
knowledge of the creditors.
EXAMPLE:
Gina made a donation of a parcel of land to Wendell. Before the
date of the donation, Gina had contracted several debts. With
the donation to Wendell, the remaining property of Gina is not
sufficient to pay all her debts. The donation can be rescinded
because the alienation is presumed in fraud of creditors.
(4) Contracts which refer to things under litigation. —
In No. (3), the purpose of the remedy is to secure the payment
of an existing credit of a third person against a party to a
contract sought to be rescinded. Here, the purpose is to make
effective the claim of a party litigant over a thing under
litigation which was the object of a contract entered into by the
other party with another person.
EXAMPLE:
Sandy sues Ben for the recovery of a parcel of land. In this
case, the land is a “thing under litigation.”
If, during the pendency of the case, Ben sells the land to Cathy
without the approval of Sandy or of the court, the sale is
rescissible at the instance of Sandy in case she wins in her suit
for the recovery of said land unless Cathy is in legal possession
of the land in good faith. Sandy, however, may protect his right
by filing a notice of lis pendens.
D. When remedy of rescission is NOT allowed:
(1) If the party who demands rescission cannot return what he
is obliged to restore under the contract (Art.1385 par.1)
(2) If the property is legally in the possession of a third person
who acted in good faith (Ibid. par.2)*
*The remedy in such a case would be to demand indemnity
for damages from the person who caused the loss. (Ibid. par.
3)
E. Badges of Fraud:
Art.1387 All contracts by virtue of which the debtor
alienate property by gratuitous title are presumed to
have been entered into in fraud of creditors, when the
donor did not reserve sufficient property to pay all debts
contracted before the donation.
Alienation by onerous title are also presumed
fraudulently when made by person against whom some
judgment has been rendered in any instance or some
writ of attachment has been rendered in any instance or
some writ of attachment has been issued. The decision
or attachment need not refer to the property alienated,
and need not have been obtained by the party seeking
the rescission.
In addition to these presumptions, the design to defraud
creditors may be proved in any other manner recognized
by the law of evidence.
EXAMPLES:
(1) Alienation by gratuitous title. — Princess Sarah made a
donation of a parcel of land to Becky. Before the date of the
donation, Princess Sarah had contracted several debts. With the
donation to Becky, the remaining property of Princess Sarah is
not sufficient to pay all her debts.
Under the first paragraph, the donation is presumed to be
fraudulent unless proved otherwise.
(3) Alienation by onerous title. — (a) Suppose in the
preceding example, the contract is a sale. Under the second
paragraph, the sale to Becky is not presumed fraudulent. The
creditors of Princess Sarah must show that the conveyance will
prejudice their rights.
However, the presumption of fraud will arise in case the sale
was made by Princess after some judgment has been rendered
against him or some writ of attachment has been issued against
him.
(a) Suppose again that Cedie, a creditor of Princess Sarah,
has obtained a judgment or writ of attachment in his favor.
Then Princess sold to Heidi another parcel of land which has not
been levied upon or attached. The sale to Heidi is also
presumed fraudulent because the law says “the decision or
attachment need not refer to the property alienated.”
(c) Becky is another creditor of Princess Sarah. Does she have
the right to rescind the sale to Heidi? Yes, because the law says
that “the decision or attachment . . . need not have been
obtained by the party seeking the rescission.”
F. Period for Filing Action for Rescission:
General Rule: The action to claim for rescission must be
commenced within 4 years from the date the contract was
entered into.
Exception:
i. For persons under guardianship, the period shall begin from
the termination of incapacity; and
ii. For absentees, from the time the domicile is known.
(Art.1389)
Question: Six years after a rescissible contract was made,
action was brought for its rescission. The person who asked for
the rescission was neither a ward nor an absentee at the time
of the transaction of the rescissible contract. Will rescission
still be allowed?
ANS: No, the rescission will no longer be allowed because the
action has already prescribed. “The action to claim rescission
must be commenced within four years.”
Question: When Pedro was 13 years old, he was under a
guardian who sold, in his behalf but without judicial authority,
the harvest in the farm that Pedro owns, and in so doing the
ward suffered a lesion of more than one-fourth of the property.
How many years will be given Pedro to rescind the contract?
ANS: Pedro will be given four years after reaching the age of
majority (the time the guardianship ceases); hence, before
reaching 22 years of age, the former ward should already have
sued for the rescission of the contract.
G. Who Can Bring the Action?
(a) The injured party (or the defrauded creditor).
(b) His heir or successor-in-interest.
(c) Creditors of (a) and (b) by virtue of Art. 1177 of the
Civil Code.
VOIDABLE CONTRACTS
(Art.1390-Art.1402)
A. DEFINITION
Voidable Contracts - are valid until annulled unless there has
been ratification. In a voidable contract, the defect is caused by
vice of consent.
Voidable Contract Not Void Ab Initio
A contract where consent is vitiated, such as by violence or
intimidation, is not void ab initio but only voidable, and is
binding upon the parties unless annulled by proper action in
court.
Annulment - is a remedy 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.
B. Grounds for Annulment (Declaration of Nullity)
(a) incapacity to give consent
(b) vitiated consent
Example:
If a house is built with conjugal funds on the husband's lot, the
house and the lot will be both considered conjugal, with the
husband becoming the creditor of the conjugal partnership to
the extent of the value of the lot. Should the husband sell the
house and lot without his wife's consent, the sale would be
voidable.
C. Period for Filing action for Annulment:
Art.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.
The 4 year period for bringing an action for annulment of a
voidable contract is reckoned:
(1) In case of intimidation, violence, or undue influence,
from the time the intimidation, etc., ceases.
(2) In case of mistake or fraud, from the time it is
discovered since before the time of discovery, the innocent
party is unaware of the reason which renders the contract
voidable and can't be exempted to bring the action in court.
(3) In the case of contracts entered into by minors or
incapacitated persons, from the time the guardianship ceases.
An incapacitated person has no capacity to sue.
Article 1392. Ratification extinguishes the action to
annul a voidable contract.
Ratification means that one voluntarily adopts some defective
or unauthorized act or contract which, without his subsequent
approval or consent, would not be binding on him.
It cleanses the contract from all its defects from the moment it
was constituted. Hence, the action to annul is extinguished.
Examples:
i. A minor bought a parcel of land, but sold the same, after
reaching 21 years of age, to a 3rd person.
ii. Use of the proceeds by a person who had been previously
intimidated into selling his property.
iii. If Marimar, an insane person, entered into a contract with a
carpenter to repair the roof of her house, this contract can
be annulled as it has been entered into by a person who is
incapacitated. However, Marimar is Senyora Santibanez’s
ward, Senyora Santibanez can make an express or tacit
ratification of the repair, especially if it will redound to the
benefit of her incapacitated ward.
D. Effects of Annulment:
Duty of mutual restitution upon Annulment:
(Art.1398)
(1) If the contract is annulled, the parties, as a general
rule, must restore to each other (a) the subject matter of the
contract with its fruits and (b) the price thereof with legal
interest.
(2) In personal obligations (Art.1156) where the service
had already been rendered, the value thereof with the
corresponding interest, is the basis for damages (par.2) UNENFORCEABLE CONTRACTS
recoverable from the party benefited by the service.
(Art.1403-Art.1408)
Examples:
Art. 1403. The following contracts are unenforceable,
unless they are ratified:
i. If a sale of land is annulled, the seller must return the
purchase price with legal interest and the buyer must
(1) Those entered into in the name of another person by
return the land with its fruits.
one who has been given no authority or legal
ii. Sugar sold her plow carabao to Ben. On the petition of
representation, or who has acted beyond his powers;
Sugar, the contract was annulled by the court. BUT the
carabao died in the possession of Ben through his fault.
(2) Those that do not comply with the Statute of Frauds
Ben must pay the value of the carabao at the time of its
as set forth in this number. In the following cases an
death, with interest from the same date. If the carabao
agreement hereafter made shall be unenforceable by
had given birth, the young must also be delivered as the
action, unless the same, or some note or memorandum,
fruit of the said animal.
thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the
E. Effect of Loss Through Fortuitous Event
agreement cannot be received without the writing, or a
secondary evidence of its contents:
Question: Suppose the innocent party cannot restore because
of a loss through a fortuitous event, may he still compel the
(a) An agreement that by its terms is not to be
other to return what he had given?
performed within a year from the making thereof;
ANS: It would seem that the answer is NO, because before
(b) A special promise to answer for the debt, default, or
annulment, the contract is valid, and the innocent party, being
miscarriage of another;
the owner of the thing lost by fortuitous event, must bear the
loss. There is however an exception, and it occurs when he
(c) An agreement made in consideration of marriage,
offers to give the value of the thing. He must be allowed this
other than a mutual promise to marry;
remedy; otherwise, he would be in a worse position than one
who had destroyed the thing through his fault. Once he
(d) An agreement for the sale of goods, chattels or
exercises this remedy, he can recover from the other what has
things in action, at a price not less than five hundred
been previously given.
pesos, unless the buyer accept and receive part of such
goods and chattels, or the evidences, or some of them, of
such things in action or pay at the time some part of the
purchase money; but when a sale is made by auction and
entry is made by the auctioneer in his sales book, at the
time of the sale, of the amount and kind of property sold,
terms of sale, price, names of the purchasers and person
on whose account the sale is made, it is a sufficient
memorandum;
(e) An agreement of the leasing for a longer period than
one year, or for the sale of real property or of an interest
therein;
(f) A representation as to the credit of a third person.
(3) Those where BOTH parties are incapable of giving
consent to a contract.
A. DEFINITION
Unenforceable Contracts - cannot be sued upon or enforced
unless they are ratified. An unenforceable contract occupies an
intermediate ground between a voidable and void contract.
Binding Force of Unenforceable Contracts - While
rescissible and voidable contracts are valid and enforceable
unless they are rescinded or annulled, unenforceable contracts,
although valid are unenforceable unless they are ratified.
B. Kind of Unenforceable Contracts:
Under Art. 1403, the following contracts are unenforceable:
(1) Those entered into in the name of another by one
without, or acting in excess of, authority (unauthorized
contracts);
(2) Those that do not comply with the Statute of Frauds;
and
(3) Those were both parties are incapable of giving.
Unauthorized Contracts - those entered into in the name of
another person by one who has been given no authority or
legal representation or who has acted beyond his powers.
Example:
Without Pedro's authority, his brother, Juan, sold his car, in
Pedro's name, to Maria. The contract is unauthorized and
cannot and cannot affect Pedro unless Pedro ratifies it expressly
or implicitly, as by accepting the proceeds of the sale.
Example:
A compromise agreement signed in behalf of the client by his
lawyer who did so without authorization of said client is merely
unenforceable (not void) and may, therefore, be ratified
by said party expressly or implicitly.
C. Modes of Ratification under the Statute
(1) By failure to object to the presentation of oral
evidence to prove the contract. The failure to so object
amounts to a waiver and makes the contract as binding as if
it has been reduced to writing.
 (2) By acceptance of benefits under the contract. In this
case, the contract is no longer executory and, therefore, the
Statute does not apply.
Unless otherwise provided by law, a contract is obligatory in
whatever form it is entered into, provided all the essential
requisites are present. When a verbal contract has already been
completed, executed or partially consummated, its
enforceability will not be barred by the Statute of Frauds, which
applies only to an executory agreement.
D. Contracts where BOTH parties are incapacitated
Art.1406 In a contract where both parties are incapable
of giving consent, express or implied ratification by the
parent, or guardian, as the case may be, of one of the
contracting parties shall give the contract the same
effect as if only one of them were incapacitated.
If ratification is made by the parents or guardians, as the
case may be, of both contracting parties, the contract
shall be validated from the inception.
When unenforceable contract becomes voidable or valid
● Where both parties to a contract are incapable of giving
consent,
i. The contract is unenforceable.
ii. HOWEVER, if the parent OR guardian of either party, OR
if one party after attaining/regaining capacity, ratifies the
contract, it becomes VOIDABLE.
● If the ratification is made by the parents or guardians of
both contracting parties, or by both contracting parties after
attaining/regaining capacity,
i. The contract is VALIDATED, and
ii. Its validity retroacts to the time it was entered into.
Example:
(1) Mary and John, both 16 years old, entered in a contract of
sale. The contract is unenforceable since both parties cannot
give consent. Now, suppose the guardian or parent of Mary
ratifies expressly or impliedly the said contract of sale, it
becomes voidable, that is valid until annulled by the guardian or
parent of John. However, if the guardian or parent of John also
ratifies it, the contract is validated right from the time it was
first entered into.
(2) Emilia is a minor child of Arturo and Teresita. Arturo died.
Teresita, as the natural guardian of Emilia, entered into a deed
of extrajudicial partition and sale, conveying the inheritance of
Emilia. Emilia was NOT a party to the contract, never ratified
the deed, and, in fact, questioned its validity. The contract is
unenforceable, NOT voidable.
Article 1408. Unenforceable contracts cannot be assailed
by third persons.
Right of third persons to assail an unenforceable
contract.
Strangers to a voidable contract cannot bring an action to annul
the same (see Art. 1397.); neither can they assail a contract
because of its unenforceability. The benefit of the Statute can
only be claimed or waived by one who is a party or privy to the
oral contract, not by a stranger. An action for rescission may be
brought by a third person.
EXAMPLE:
Manny Pakyawan owns a parcel of land, which is under the
possession of and being used by Sunny Angora as grazing land
for native ducks for his balot business.. Under a verbal contract,
Manny Pakyawan sold the land to real estate developer Mekeni
Villar. In an action for ejectment by Mekeni Villar against Sunny
Angora, the person in possession, the latter cannot set up the
defense of the Statute of Frauds because he is a third party to
the contract.
VOID OR INEXISTENT
CONTRACTS
(Art.1409-Art.1422)
Art.1409 The following contracts are inexistent and void
from the beginning:
1. Those whose cause, object or purpose is contrary to
law, morals, good customs, public order, or public
policy;
2. Those which are absolutely simulated or fictitious;
3. Those whose cause or object did not exist at the
time of the transaction;
4. Those whose object is outside the commerce of
men;
5. Those which contemplate an impossible service;
6. Those where the intention of the parties relative to
the principal object of the contract cannot be
ascertained;
7. Those expressly prohibited or declared void by law.
These contracts cannot be ratified. Neither can the right
to set up the defense of illegality be waived.
A. DEFINITION
Void or Inexsitent Contracts - are absolutely null and void.
Void contracts have no effect at all and cannot be ratified.
Characteristics of a void or inexistent contract:
(1) Generally, it produces no effect whatsoever;
(2) It cannot be ratified (Art.1409, par.2);
(3) The right to set up the defense of illegality cannot be
waived;
(4) The action or defense for the declaration of its
inexistence does not prescribe (Art.1410);
(5) The defense of illegality is not available to third
persons whose interests are not directly affected (Art.1421);
and
(6) It cannot give rise to a valid contract (Art. 1422).
VOID AND VOIDABLE CONTRACTS DISTINGUISHED

Examples:
(1) Those whose cause, object or purpose is contrary to
law, morals, good customs, public order or public policy;
● Contrary to Law
An agreement whereby Anna is to render service as a servant
to Ben without compensation as long as Anna has not paid his
debt is reprehensible and censurable.
● Contrary to Morals
A contract, whereby Anna promised to live as the common-law
wife of Ben without the benefit of marriage in consideration of
P50,000.00, is immoral and, therefore, void.
● Contrary to Good Customs
Anna entered into a contract whereby Anna binds herself to
slap his father. This contract is void because it is against the
good custom of showing respect to our parents.
● Contrary to Public Order
A stipulation in a contract of lease whereby the landlord can use
force to eject the tenant in case of failure of the latter to pay
the rent agreed upon is void as being against public order.
● Contrary to Public Policy
A condition in a contract of sale states: “In case of sale, the
buyer shall not sell to others the land sold but only to the seller,
or to his heirs or successors for the same price of P5,600.00
when the latter shall be able to pay it.’’
The condition is contrary to public policy, because it virtually
amounts to a perpetual restriction on the right of ownership,
specifically the owner’s right to freely dispose of his property.
Such a prohibition indefinite and unlimited as to time, so much
so that it shall continue to be applicable even beyond the
lifetime of the original parties to the contract is a nullity.
(2) Those which are absolutely simulated or fictitious;
Anna is indebted to Ben. Upon learning that Ben is going to
enforce her credit, Anna pretended to sell her land to Felimon,
his father-in-law. Anna did not receive a single centavo for the
deed of sale she executed and she continued in possession of
the land as the contract was merely simulated or fictitious.
There is no contract of sale in this case as the parties do not
intend to be bound at all. The sale is but a sham.
(3) Those whose cause or object did not exist at the time
of the transaction;
Sandra sells to Ben a parcel of land. In the deed of sale,
P100,000.00 is stated as the price of the land. If this statement
is false, then there is no contract of sale.
(4) Those whose object is outside the commerce of men;
If the object is outside the commerce of man, such as sidewalks
or public plazas or public bridges, they cannot be the object of
contracts of alienation (but may be the object, for example, of a
contract for repair).
(5) Those which contemplate an impossible service;
If a blind man enters into a contract which requires the use of
his eyesight, the contract is void although in this particular
case, we have only a relative impossibility. This is because here,
the relative impossibility is not merely temporary.
(6) Those where the intention of the parties relative to
the principal object of the contract cannot be
ascertained;
Anna sold his land to Ben. Anna has many lands. It cannot be
determined which land was intended by the parties to be the
subject of the sale.
Therefore, the contract shall be null and void and it is as if the
parties have not entered into any contract at all.
(7) Those expressly prohibited or declared void by law.
Contracts upon future inheritance except in cases expressly
authorized by law.
B. Imprescriptibility of action or defense
If a contract is void, a party thereto can always bring a court
action to declare it void or inexistent; and a party against
whom a void contract is sought to be enforced, can always raise
the defense of nullity, despite the passage of time. (Art.1410)
C. Rules where contract is illegal and the act
constitutes a criminal offense:
The rule of In Pari Delicto-in equal fault; a universal doctrine
which holds that no action arises, in equity or at law, from an
illegal contract.
The rule that parties to an illegal contract will not be aided by
law. This rule adopts the principle of “One who seeks equity
and justice must come to court with clean hands”.
Example:
If the two parties complain to a judge of the non-performance
of a contract by the other, the judge could refuse to provide
remedy to either of them because of in pari delicto: a finding
that they were equally at fault in causing the contract’s breach.
This rule adopts the principle of “One who seeks equity and
justice must come to court with clean hands”.
D. Rules where contract is illegal and the act does NOT
constitute a criminal offense:
1. When the parties are both in pari delicto and the
cause of contract is unlawful or forbidden but no
criminal offense.
Example:
X agreed to live as the common law wife of Y in
consideration of the promise on the part of Y to donate a land
to X. In this case, the promise of Y has for its consideration an
immoral act which does not constitute a crime. Hence, there
can be no recovery by one against the other or they cannot ask
the fulfillment of others promise.
complied with her promise. However, X may recover whatever
property she may have given by virtue of the contract without
any obligation to comply with her promise.
Article 1421. The defense of illegality of contract is not
available to third persons whose interests are not
directly affected.
Third persons are NOT allowed to bring an action to annul OR
assail a voidable and unenforceable contracts.
HOWEVER, if the contract is illegal OR void, even a third person
may avail of the defense of illegality or set up its illegality as
long as his interest is directly affected by the contract.

2. When only one party is guilty: Example:

1. The guilty party loses what he
contract;
2. The guilty party cannot ask
other’s undertaking;
3. The innocent party cannot be
his promise.
4. The innocent party cannot be
his promise.
Harold sold his parcel of land to his wife, Margarita. Under the
has given by reason of the law, husband and wife CANNOT sell property to each other.
Such sale is illegal and void.
for the fulfillment of the
If Charlie, a third person, became a creditor of Harold before
compelled to comply with the transaction, he can question the sale for the reason that his
right OR interest is directly affected. HOWEVER, if he became a
compelled to comply with creditor after the transfer, the defense of illegality is NOT
available to him.

Example:
In the preceding example, X was only a minor(16years old) at
the time of the contract and Y was a married man of mature
years and experience, the principle of in pari delicto is not
applicable. Y cannot recover the land given by him nor demand
the performance of X’s undertaking if the latter has not yet