Paolo Gabriel D.

Jamer

Part I.
1. Article 1403 of the Civil Code provides that, “the following contracts are unenforceable, unless
they are ratified:

(1) 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;

(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the
following cases an agreement hereafter made shall be unenforceable by action, unless the
same, or some note or memorandum, thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement cannot be received without
the writing, or a secondary evidence of its contents:

(a) An agreement that by its terms is not to be performed within a year from the making
thereof;

(b) A special promise to answer for the debt, default, or miscarriage of another;

(c) An agreement made in consideration of marriage, other than a mutual promise to marry;

(d) An agreement for the sale of goods, chattels or things in action, at a price not less than five
hundred 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.”

2. Article 1409 of the Civil Code provides that, “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.”

Part II.

1. Article 1423 of the Civil Code gives the distinctions between civil obligations and natural
obligations, viz.:
(1) Civil obligations arise from law, contracts, quasi-contracts, delicts, quasi-
delicts, while natural obligations are based not on positive law but on equity
and natural law; and
(2) Civil obligations give a right of action in courts of justice to compel their
fulfillment or performance, while natural obligations do not grant such right of
action to enforce their performance.

Paolo Gabriel D. Jamer

2. (a) Estoppel is a bar which precludes a person from denying or asserting anything to the
contrary of that which has , in contemplation of law, been established as the truth, either
by the acts of judicial or legislative officers, or by his acts, representations, or admissions,
either express or implied.

(b) Estoppel by deed is a bar which precludes one party to a deed and his privies from
asserting as against the other party and his privies any right or title in derogation of the
deed, or from denying the truth of any material facts asserted in it.

(c) An equitable estoppel may arise, however, even where there is no intention on the part
of the person estopped to relinquish any existing right and frequently carries the
implication of fraud. It involves the conduct of both parties.

(d) The principle of estoppel in pais  applies wherein one, by his acts, representations or
admissions, or by his own silence when he ought to speak out, intentionally or through
culpable negligence, induces another to believe certain facts to exist and such other
rightfully relies and acts on such belief, so that he will be prejudiced if the former is
permitted to deny the existence of such facts.

3. Express trusts are those which are created by the direct and positive acts of the parties, by
some writing or deed or will, or by words either expressly or impliedly, evincing an
intention to create a trust. On the other hand, implied trusts are those which, without
being expressed, are deducible from the nature of the transaction as matters of intent, or
which are superinduced on the transaction by operation of law as matters of equity,
independently of the particular intention of the parties.