Part I
Sales Reasons for Prohibition Under Article 1490
Chapter 2
Capacity to Buy or 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 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.
Person Who May Enter into a Contract of Sale
➢ As a general rule, all persons, whether natural or juridical, who can
bind themselves by contract have also legal capacity to buy and
sell.
➢ There are exceptions to this rule in those cases when the law
determines that party suffers from either absolute or relative
incapacity.
Kinds of Incapacity
➢ Absolute Incapacity – incapacity in the case of persons who cannot
bind themselves
➢ Relative Incapacity – it exists only with reference to certain persons
or a certain class of property
➢ There are no incapacities except those provided by law and such
incapacities cannot be extended to other cases by implication for
the reason that such construction would be in conflict with the very
nature of Article 1489.
Liability for Necessaries of Minor or Other Person Without Capacity
to Act
➢ Necessaries – those things which are needed for sustenance,
dwelling, clothing, and medical attendance, in keeping with the
financial capacity of the family of the incapacitated person
➢ Generally, the contracts entered into by a minor and other
incapacitated persons are voidable. However, where necessaries
are sold and delivered to him (without the intervention of the parent
or guardian), he must pay a reasonable price thereof. The contract
is, therefore, valid but the minor has the right to recover any excess
above a reasonable value paid by him.
Sale by Minors
➢ The courts have laid down the rule that the sale of real estate
effected by minors who have already passed the ages of puberty
and adolescence and are now in the adult age, when they
pretended to have already reached their majority, while in fact they
have not, is valid.
➢ They cannot be permitted afterwards to excuse themselves from
compliance with the obligations assumed by them or to seek their
annulment.
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 of property
under article 191.
Relative Incapacity of Husband and Wife
➢ The husband and wife are prohibited by the above article from
selling property to each other.
➢ A sale between husband and wife in violation of Article 1490 is
inexistent and void from the beginning because such contract is
expressly prohibited by law.
➢ They are also prohibited from making donations to each other
during the marriage except moderate gifts on the occasion of any
family rejoicing.
➢ However, if there has been a separation of property agreed upon
in the marriage settlements, or when there has been a judicial
separation of property decreed between them by the court, the
sales between husband and wife are allowed. They have,
therefore, in the 2 cases mentioned, capacity to buy from or sell to
each other.
➢ The prohibition is primarily for the protection of third persons who,
relying upon supposed property of either spouse, enters into a
contract with either of them only to find out that the property relied
upon was transferred to the other spouse.
Persons Permitted to Question Sale
➢ The heirs of either spouse, as well as creditors at the time of the
transfer, can attack the validity of the sale but not the creditors who
became such only after the transaction.
➢ The government can question the validity or legitimacy of sales
subject to tax between husband and wife whenever necessary to
prevent tax evasion.
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 entrusted 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.
Incapacity by Reason of Relation to Property
➢ The above article enumerates the persons who, because of their
position and relation with the persons under their charge or
property under their control, are prohibited from acquiring said
property either directly or indirectly and whether in private or public
sale.
➢ They are the:
1. guardians
2. agents
3. executors and administrators
4. public officers and employees
5. judicial officers and employees and lawyers
6. others especially disqualified by law
Reason for Prohibition Under Article 1491
➢ The reason behind the article is to prevent frauds on the part of the
persons enumerated therein and minimize temptations to the
exertion of undue and improper influence.
➢ The fear that greed might get the better of the sentiments of loyalty
and disinterestedness is the reason underlying Article 1491.
➢ The law does not trust human nature to resist the temptations likely
to arise out of antagonism between the interest of the seller and the
buyer.
Other Persons Especially Disqualified
1. Aliens who are disqualified to purchase private agricultural lands
2. An unpaid seller, having a right of lien or having stopped the goods
in transitu, who is prohibited from buying the goods either directly
or indirectly in the resale of the same at a public or private sale
which he may make
3. The officer conducting an execution sale of property to enforce a
court judgment rendered against the owner thereof cannot become
a purchaser or be interested directly, or indirectly in any purchase
at such sale
Effect of Sale in Violation of Prohibition

➢ With respect to Nos. 1 to 3, the sale shall only be voidable because

in such cases only private interests are affected. The defect can be
cured by ratification of the seller.
➢ With respect, however, to Nos. 4 to 6, the sale shall be null and
void, public interests being involved therein.

ARTICLE 1492. The prohibitions in the two preceding

articles are applicable to sales in legal redemption, compromises
and renunciations.

Prohibition Extends to Sales in Legal Redemption, etc.

➢ The relative incapacity provided in Articles 1490 and 1491 applies

also to sales by virtue of legal redemption, compromises, and
renunciations.
❖ Compromise – a contract whereby the parties, by reciprocal
concessions, avoid a litigation or put an end to one already
commenced; amicable settlement of a controversy
❖ Renunciation – a creditor gratuitously abandons his right
against his creditor; other terms used by the law are
condonation and remission
➢ The persons disqualified to buy referred to in Articles 1490 and
1491 are also disqualified to become lessees of the things
mentioned therein.