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145

Chapter 2

CAPACITY TO BUY OR SELL

ART. 1489. All persons who are authorized in this

Code to obligate themselves, may enter into a con-
tract 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. (1457)

Person who may enter into a contract

of sale.
As a general rule, all persons, whether natural or juridical, who
can bind themselves have also legal capacity to buy and sell. There
are exceptions to this rule in those cases when the law determines
that a party suffers from either absolute or relative incapacity.

Kinds of incapacity.
Such incapacity is absolute in the case of persons who cannot
bind themselves; and relative where it exists only with reference
to certain persons or a certain class of property. (Wolfson vs. Es-
tate of Martinez, 20 Phil. 340 [1911].) Persons who are merely rela-
tively incapacitated are mentioned in Articles 1490-1491.
There are no incapacities except those provided by law and
such incapacities cannot be extended to other cases by implica-
tion for the reason that such construction would be in conflict with
the very nature of Article 1489. (Ibid.)

145
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146 SALES Art. 1490

Liability for necessaries of minor or other

person without capacity to act.
Necessaries are those things which are needed for sustenance,
dwelling, clothing, medical attendance, education and transpor-
tation according to the financial capacity of the family of the in-
capacitated person. (see Art. 194, Family Code.) Whether the na-
ture of the contract is such that it can under any circumstances,
be regarded as a contract for necessaries, is a question which de-
pends upon the facts of the particular case.
Generally, the contracts entered into by a minor and other
incapacitated persons (e.g., insane or demented persons, deaf-
mutes who do not know how to write), are voidable. (Arts. 1327,
1390.) However, where necessaries are sold and delivered to him
(without the intervention of the parent or guardian), he must pay
a reasonable price therefor. (Art. 1489, par. 2.) The contract is, there-
fore, 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 pre-
tended to have already reached their majority, while in fact they
have not, is valid, and they cannot be permitted afterwards to
excuse themselves from compliance with the obligations assumed
by them or to seek their annulment. (see Mercado and Mercado
vs. Espiritu, 37 Phil. 265 [1917].)
The doctrine is entirely in accord with the provisions of the
Rules of Court (see Rule 131, Sec. 1.) and the Civil Code (see Art.
1431.) which determine cases of estoppel.

ART. 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
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Art. 1490 CAPACITY TO BUY OR SELL 147

(2) When there has been a judicial separation of

property under article 191.* (1458a)

Relative incapacity of husband

and wife.
(1) The husband and the 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. (Art.
1409[7]; Uy Siu Pin vs. Chua Hue vs. Cantollas, 70 Phil. 55
[1940]; Camia de Reyes vs. Reyes de Ilano, 63 Phil. 629 [1936];
Medina vs. Collector of Internal Revenue, 1 SCRA 302 [1961].)
(2) They are also prohibited from making donations to each
other during the marriage except moderate gifts on the occasion
of any family rejoicing. (Art. 87, Family Code.) However, if there
has been a separation of property agreed upon in the marriage
settlements, or when there has been a judicial separation of prop-
erty decreed between them by the court, the sales between hus-
band and wife are allowed. They have, therefore, in the two cases
mentioned, capacity to buy from or to sell to each other.
Incidentally, a marriage settlement (also called “ante-nuptial
contract”) is an agreement entered into by persons who are about
to be united in marriage, and in consideration thereof, for the
purpose of fixing the property relations that would be followed by
them for the duration of the marriage. (see Arts. 74-80, Ibid.)

Reason for prohibition under Article 1490.

The reason for the law is not based so much on the union of
the personality of the husband and wife nor on the weakness of
the sex and on the possibility that the husband will induce his wife
to engage in ruinous operations, but primarily, for the protection
of third persons1 who, relying upon supposed property of either

*Now, Art. 135, Family Code.

1
The husband cannot alienate or encumber any real property of the conjugal part-
nership without the wife’s consent. (Art. 166.) An action to annul the questioned trans-
action may be instituted by the wife during the marriage and within 10 years from the
transaction. (Art. 173.) The lack of consent makes the transaction merely voidable. The
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148 SALES Art. 1491

spouse, enters into a contract with either of them only to find out
that the property relied upon was transferred to the other spouse.
(see 10 Manresa 95-96.)

Persons permitted to question sale.

(1) Although certain transfers between husband and wife are
prohibited under Article 1490, such prohibition can be taken ad-
vantage of only by persons who bear such relation to the parties
making the transfer or to the property itself that such transfer
interferes with their rights or interests. Unless such a relationship
appears, the transfer cannot be attacked. Thus, the heirs of either
spouse, as well as creditors at the time of the transfer, can attack
the validity of the sale but not creditors who became such only
after the transaction. (Cook vs. McMicking, 27 Phil. 10 [1914].)
(2) The government is always an interested party in all mat-
ters involving taxable transactions. It is competent to question
their validity or legitimacy whenever necessary to block tax eva-
sion. It can impugn sales between husband and wife. (Medina vs.
Collector of Internal Revenue, supra.)

ART. 1491. The following persons cannot acquire

by purchase, even at a public or judicial auction, ei-
ther 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 gov-

legal prohibition against the disposition of conjugal property by one spouse without the
consent of the other has been established for the benefit, not of third persons, but only of
the other spouse for whom the law desires to save the conjugal partnership from dam-
ages that might be caused. (Villaranda vs. Villaranda, 423 SCRA 571 [2004]; Papa vs.
Montenegro, 54 Phil. 331 [1930].)
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Art. 1491 CAPACITY TO BUY OR SELL 149

ernment owned or controlled corporation, or institu-

tion, the administration of which has been entrusted
to them; this provision shall apply to judges and gov-
ernment 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 jus-
tice, the property and rights in litigation or levied upon
an execution before the court within whose jurisdic-
tion or territory they exercise their respective func-
tions; 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)

Incapacity by reason of relation

to property.
The above article enumerates the persons who, by reason of
the relation of trust with the persons under their charge or their
peculiar control over the property, 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) execu-
tors and administrators; (4) public officers and employees; (5)
judicial officers, employees and lawyers; and (6) others especially
disqualified by law. (Rubias vs. Batiller, 51 SCRA 120 [1973].)
The persons disqualified to buy referred to in Articles 1490
and 1491 are also disqualified to become lessees of the things
mentioned thereon. (Art. 1646.)

Reason for prohibitions under

Article 1491.
The disqualifications imposed by Article 1491 on the person
enumerated is grounded on public policy considerations which
disallow the transactions entered into by them, whether directly
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150 SALES Art. 1491

or indirectly, in view of the fiduciary relationship involved or the

peculiar control exercised by these individuals over the proper-
ties or rights covered. (Mananquil vs. Villegas, 189 SCRA 335
[1990].)
The prohibitions seek to prevent frauds on the part of such
persons 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 un-
derlying 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 buyer. (23 Scaevola 403; Gregorio
Araneta, Inc. vs. Tuazon de Paterno, 91 Phil. 786 [1952].)

Prohibition with respect to guardians.

The relation between guardian and ward is so intimate, the
dependence so complete and the influence so great that any trans-
action between the two parties entered while the relationship
exists are, in the highest sense, suspicious and presumptively
fraudulent. This influence is presumed to last while the guardi-
an’s functions are to any extent still unperformed, while the prop-
erty is still under his control and until the accounts have been fi-
nally settled. (39 Am. Jur. 2d 160.)

Prohibition with respect to agents.

The agent’s incapacity to buy his principal’s property rests on
the fact that the agent and the principal form one juridical per-
son. Like the guardian, the agent stands in a fiduciary relation with
his principal. A sale made by an agent to himself, directly or indi-
rectly, without the permission of the principal is ineffectual. (see
Gregorio Araneta, Inc. vs. Tuazon de Paterno, supra; Barton vs.
Leyte Asphalt and Mineral Co., 46 Phil. 938 [1924].) The consent
of the principal removes the transaction out of the prohibition
contained in Article 1491(2). (Distajo vs. Court of Appeals, 132
SCAD 577, 339 SCRA 52 [2000].)
(1) The incapacity of the agent is only against buying the prop-
erty he is required to sell during the existence of the relationship.
Therefore, an agent can buy for himself the property after the ter-
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Art. 1491 CAPACITY TO BUY OR SELL 151

mination of the agency (Valera vs. Velasco, 51 Phil. 695 [1928].) or

other properties different from those he has been commissioned
to sell. (Moreno vs. Villonea, [C.A.] 40 O.G. 2322.)
(2) Of course, the agent may buy property placed in his hands
for sale or administration if the principal gives his consent thereto.
(Cui vs. Cui, 100 Phil. 913 [1957].)
(3) The prohibition does not apply where the sale of the prop-
erty in dispute was made under a special power inserted in or
attached to the real estate mortgage pursuant to Section 5 of Act
No. 3135, as amended, a special law which governs extra-judicial
foreclosure of real estate mortgage. The power to foreclose is not an
ordinary agency that contemplates exclusively the representation
of the principal by the agent but is primarily an authority con-
ferred upon the mortgagee for the latter’s own protection. By vir-
tue of the exception, the title of the mortgagee-creditor over the
property cannot be impeached or defeated on the ground that the
mortgagee cannot be a purchaser at his own sale. (Fiestan vs.
Court of Appeals, 185 SCRA 751 [1990].)

Prohibition with respect to executors

and administrators.
The prohibition refers only to properties under the adminis-
tration of the executor or administrator at the time of the acquisi-
tion and does not extend, therefore, to property not falling within
this class.
Executors do not administer the hereditary rights of any heir.
Such rights do not form part of the property delivered to the ex-
ecutor for administration. Consequently, the prohibition in No.
(3) of Article 1491 does not apply to a purchase by an executor of
such hereditary rights (e.g., 1/10 interest in the estate), even in
those cases in which the executor administers the property per-
taining to the estate. (Naval vs. Enriquez, 3 Phil. 669 [1904]; see
Garcia vs. Rivera, 95 Phil. 831 [1954].)

ILLUSTRATIVE CASE:
Administrator sold certain properties of the estate to his son for a
grossly low price.
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152 SALES Art. 1491

Facts: S, administrator of the estate of his deceased mother,

was authorized by the court to sell certain described properties
of the estate to settle its outstanding obligations at the best price
obtainable. The sale was made to B, S’s son, for P75,000. On the
same date, B executed a deed of sale of the same property for
P80,000 in favor of C. Z, etc., heirs of X, filed an action for the
annulment/revocation of the two sales. C claimed that the ac-
tual consideration was P225,000 and being a purchaser in good
faith and for value, his title to the property is indefeasible pur-
suant to law. It appears that S entered into a “mutual agree-
ment of promise to sell’’ to spouses H and W the property al-
ready sold to C for P220,000 for which they paid P70,000 as
earnest money.
H and W alleged that both sales to B and C were simulated
and fictitious, made to defraud the estate and other heirs, and
that C supplied the consideration of the sale to B who was not
gainfully employed. After several hearings, the court allowed all
the interested parties to bid for the property. C offered to buy for
P280,000. H and W counter-offered at P282,000, spot cash,
which was increased to P300,000. Later all the parties, except
H and W and B, submitted an amicable settlement seek- ing
approval of the two sales and accepting the offer of C. H and
W questioned the court’s approval of the amicable settle- ment
and the non-acceptance of their offer.
Issue: Did the assent of practically all the heirs to the com-
promise agreement justify its approval by the court?
Held: No. (1) Sale is illegal, irregular and fictitious. — As ad-
ministrator, S occupies a position of the highest trust and confi-
dence. In the discharge of his functions, an administrator should
act with utmost circumspection to preserve the estate and guard
against its dissipation so as not to prejudice its creditors and
the heirs of the decedent who are entitled to the net residue
thereof. In the case at bar, the sale was made necessary “in or-
der to settle other existing obligations of the estate, but it was
made, of all people, to his son B, and for a grossly low price of
only P75,000. B had no income whatsoever, was, in fact, still a
dependent of his father, and not a single centavo of the consid-
eration was ever accounted for nor reported by B to the pro-
bate court. It was only after the sales were questioned in court
by H and W that B was compelled to admit that the actual con-
sideration of the sale to C was P200,000.
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Art. 1491 CAPACITY TO BUY OR SELL 153

The sale to B was not submitted to the probate court for

approval as mandated by the order authorizing S to sell. The
sale was indubitably illegal, irregular, and fictitious, and the
court’s approval of the assailed compromise agreement violated
Article 1409 and “cannot work to ratify a fictitious contract which
is non-existent and void from the very beginning.”
(2) Consent of heirs not a ground for court’s approval of sale. —
The assent of the parties-signatories “to such an illegal scheme
does not legalize the same nor does it impose an obligation upon
the court to approve the same to the prejudice not only of the
creditors of the estate, and of the government by the non-pay-
ment of the correct amount of taxes legally due from the estate.”
(3) Offer of H and W more advantageous. — The offer of H
and W “is decidedly more beneficial and advantageous not only
to the estate, the heirs of the decedent, but more importantly, to
its creditors for whose account and benefit the sale was made.
No satisfactory and convincing reason appeared given for the
rejection and non-acceptance of said offer, thus giving rise to a
well-grounded suspicion that a collusion of some sort exists
between the administrator and the heirs to defraud the credi-
tors and the government.” (Lao vs. Genato, 137 SCRA 77 [1985].)

Prohibition with respect to public officials

and employees.
The prohibition refers only to properties: (1) belonging to the
State, or of any subdivision thereof, or of any government-owned
or -controlled corporation or institution, (2) the administration of
which has been entrusted to the public officials or employees.
Thus, a provincial governor or treasurer entrusted with the ad-
ministration of property belonging to a province cannot buy said
property while the school superintendent who has no charge of
the same is not within the scope of the prohibition.
Note that the prohibition includes judges and government
experts who, in any manner, take part in the sale.

ILLUSTRATIVE CASE:
Land foreclosed by GSIS was sold by it at public auction to the
wife of a GSIS official.
Facts: For failure to comply with the conditions of sale, GSIS
cancelled the sale of a parcel of land to MPC and later sold the
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154 SALES Art. 1491

property at public auction to T (as the highest bidder), the wife

of the Chief, Retirement Division, GSIS. MPC questioned the
validity of the sale to T.
Issue: Does the sale fall under the prohibited transactions
under Article 1491?
Held: Yes. (1) GSIS official with influence or authority. — “Pub-
lic officers who hold positions of trust may not bid directly or
indirectly to acquire properties foreclosed by their offices and
sold at public auction. A division chief of the GSIS is not an
ordinary employee without influence or authority. The mere
fact that the husband of T exercises ample authority with re-
spect to a particular activity, i.e., retirement, shows that his in-
fluence cannot be lightly regarded. The point is that he is a
public officer and his wife acts for and in his name in any trans-
action with the GSIS.
(2) Sale is void. — If he is allowed to participate in the pub-
lic bidding of properties foreclosed or confiscated by the GSIS
there will always be the suspicion among other bidders and
the general public that the insider official has access to infor-
mation and connections with his fellow GSIS officials as to al-
low him to eventually acquire the property. It is precisely the
need to forestall such suspicions and to restore confidence in
the public service that the Civil Code declares such transac-
tions to be void from the beginning and not merely voidable.
(3) Reasons for prohibition. — The reasons are grounded on
public order and public policy.2 Assuming the transaction to be
fair and not tainted with irregularity, it is still looked upon with
disfavor because it places the officer in a position which might
become antagonistic to his public duty. (Maharlika Broadcasting
Corp. vs. Tagle, 142 SCRA 553 [1986].)
Note: Here, the GSIS official was not entrusted with the ad-
ministration of the property in question.

Prohibition with respect to judges, etc.,

and lawyers.
The prohibition in Article 1491(5) applies only to the sale or
assignment of property which is the subject of litigation to the

2
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; x x x.
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Art. 1491 CAPACITY TO BUY OR SELL 155

persons disqualified therein. For the prohibition to operate, the

sale or assignment must take place during the pendency of the
litigation involving the property. (Laig vs. Court of Appeals, 86
SCRA 641 [1978]; Valencia vs. Cabanteng, 196 SCRA 302 [1991].)
The prohibition applies when, for example, a lawyer has not paid
for the property and it was merely assigned to him in considera-
tion of legal services rendered at a time when the property is still
subject of a pending case. (Ordonio vs. Eduarte, 207 SCRA 229
[1992].) The prohibition on purchase is all embracing to include
not only sales to private individuals but also public or judicial
sales. (Ramos vs. Ngaseo, 445 SCRA 529 [2004].)
(1) When property considered “in litigation.” — For property to
be considered “in litigation,” it is not required that some contest
or litigation over the property should have been tried by the judge.
Such property is “in litigation” from the moment it became sub-
ject to the judicial action of the judge who afterwards purchased
it. Hence, a purchase made by judge at a public auction of a prop-
erty pursuant to an order of execution issued by said judge is
within the prohibition whether or not the property had been the
subject of litigation in his court. (Gontingco vs. Pobinguit, 35 Phil.
81 [1911].)
There is no violation of the prohibition (although it may be
improper under the Canons of Judicial Ethics) where the judge
purchased the property in question after the decision involving
the property had already become final because none of the par-
ties therein filed an appeal within the reglementary period; hence,
the same was no longer in litigation. (Macariola vs. Asuncion, 114
SCRA 77 [1982].)
(2) Where property acquired by lawyer in foreclosure sale after ter-
mination of case. — A lawyer cannot purchase, directly or indirectly,
the property or rights which are the subject of litigation in which
he takes part by virtue of his profession. (see Rubias vs. Satiller,
51 SCRA 120 [1973].) The fact that the property in question was
first mortgaged by the client to his lawyer and only subsequently
acquired by the latter in a foreclosure sale long after the termina-
tion of the case will not remove it from the scope of the prohibi-
tion for at the time the mortgage was executed the relationship of
lawyer and client still existed, the very relation of trust and confi-
dence sought to be protected by the prohibition, when a lawyer
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156 SALES Art. 1491

occupies a vantage position to press upon or dictate terms to a

harassed client. To rule otherwise would be to countenance indi-
rectly what cannot be done directly. (Fornilda vs. Regional Trial
Court, 166 SCRA 281 [1988].)
(3) Liability of lawyer for violation of prohibition. — A violation
of the prohibition constitutes a breach of professional ethics and
malpractice for which the lawyer may be reprimanded, suspended
or disbarred from the practice of the legal profession. Good faith
is not a defense. (In re Attorney Melchor E. Ruste, 70 Phil. 243
[1940]; Hernandez vs. Villanueva, 40 Phil. 775 [1920]; Mananquil
vs. Villegas, 189 SCRA 335 [1990].)
(4) Where lawyer member of law firm involved. — Contracts of
sale or lease where the vendee or lessee is a partnership, of which
a lawyer is a member, over a property involved in a litigation in
which he takes by virtue of his profession are covered by the pro-
hibition.
(5) Cases not covered. — The prohibition does not include sale
of the property of the client effected before it became involved in
the action (Gregorio Araneta, Inc. vs. Tuazon de Paterno, 91 Phil.
786 [1952].); nor does it apply to an assignment of the amount of
a judgment made by a person to his attorney in payment of pro-
fessional services in other cases (Municipal Council of Iloilo vs.
Evangelista, 55 Phil. 290 [1930].); nor to the sale of a parcel of
land, acquired by a client to satisfy a judgment in his favor, to his
attorney as long as the property was not the subject of the litiga-
tion. (Daroy vs. Abecia, 100 SCAD 376, 298 SCRA 239 [1998].) It
has also been held that the law does not prohibit a lawyer from
charging a contingent fee (to be given in a case the suit is won)
based on a certain percentage of the value of the property in liti-
gation (Recto vs. Harden, 100 Phil. 427 [1954].), because the pay-
ment of said fee is not made during the pendency of the litiga-
tion but only after judgment has been rendered in the case han-
dled by the lawyer. In fact, under the 1988 Code of Professional
Responsibility (Rule 16.03, Canon 10 thereof.), a lawyer may have
a lien over funds and property of his client and may apply so
much thereof as may be necessary to satisfy his lawful fees and
disbursements. (Fabillo vs. Intermediate Appellate Court, 195
SCRA 28 [1991].)
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Art. 1491 CAPACITY TO BUY OR SELL 157

Other persons especially disqualified.

Examples of persons especially disqualified by law are:
(1) aliens who are disqualified to purchase private agricul-
tural lands (Art. XII, Secs. 3, 7, Constitution; see Krivenko vs.
Register of Deeds, 79 Phil. 461 [1947].);
(2) an unpaid seller having a right of lien or having estopped
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 (Art. 1533, par. 5; Art. 1476[4].);
and
(3) The officer conducting the execution sale or his deputies
cannot become a purchaser, or be interested directly or indirectly
in any purchase at an execution sale. (Sec. 19, Rule 39, Rules of
Court.)
In the case of aliens, the disqualification is founded on express
provision of the Constitution and not by reason of any fiduciary
relationship. It has been held, however, that where a land is sold
to an alien who later sold it to a Filipino, the sale to the latter can-
not be impugned. In such case, there would be no more public
policy to be served in allowing the Filipino seller or his heirs to
recover the land as the same is already owned by a qualified per-
son. (Herrera vs. Tuy Kim Guan, 1 SCRA 406 [1961]; Godinez vs.
Fong Pak Luen, 120 SCRA 223 [1983].)

Effect of sale in violation of prohibition.

If the sale is made, would the transaction be void or merely
voidable?
(1) With respect to Nos. 1 to 3, the sale shall only be voidable
because in such cases only private interests are affected. (see
Wolfson vs. Estate of Martinez, 20 Phil. 340 [1911].) The defect can
be cured by ratification of the seller. (see Arts. 1392-1396.)
(2) With respect to Nos. 4 to 6, the sale shall be null and void,
public interests being involved therein. (see Art. 1409[1]; Rubias
vs. Batiller, 51 SCRA 120 [1973].)
In a case, the Supreme Court affirmed the decision of a lower
court declaring invalid the sale made by the client in favor of his
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158 SALES Art. 1492

attorney. (Director of Lands vs. Abragat, 53 Phil. 147 [1929]; see

Fornilda vs. Regional Trial Court, 166 SCRA 281 [1988].)

Nullity of prohibited contracts

differentiated.
(1) Public officers, etc., justices, etc., and lawyers. — The nullity
of such prohibited contracts, i.e., by public officers and employ-
ees of government property entrusted to them and by justices,
judges, fiscals, and lawyers of property and rights in litigations
submitted to or handled by them, under paragraphs (4) and (5) is
definite and permanent and cannot be cured by ratification. The
public interest and public policy remain paramount and do not
permit of compromise or ratification. In this aspect, their disquali-
fication is grounded on public policy.
(2) Guardian, agents, and administrators. — The disqualification
of public officers differs from the first three cases of guardians,
agents, and administrators, as to whose transactions, it has been
opined that they may be “ratified” by means of and in the form of
a new contract, in which case its validity shall be determined only
by the circumstances at the time of execution of such new
contract.
(a) The causes of nullity which have ceased to exist can-
not impair the validity of the new contract. Thus, the object
which was illegal at the time of the first contract, may have
already become lawful at the time of the ratification or second
contract; or the service which was impossible may have be-
come possible; or the intention which could not be ascertained
may have been clarified by the parties.
(b) The ratification or second contract could then be valid
from its execution; however, it does not retroact to the date of
the first contract. (Director of Lands vs. Abragat, supra.)

ART. 1492. The prohibitions in the two preceding

articles are applicable to sales by virtue of legal re-
demption, compromises and renunciations. (n)
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Art. 1492 CAPACITY TO BUY OR SELL 159

Prohibition extends to sales in legal

redemption, etc.
(1) The relative incapacity provided in Articles 1490 and 1491
applies also to sales by virtue of legal redemption (see Art. 1619.),
compromises, and renunciations.
(a) Compromise is a contract whereby the parties, by recip-
rocal concessions, avoid a litigation or put an end to one al-
ready commenced. (Art. 2028.) It is the amicable settlement of
a controversy.
(b) By renunciation, a creditor gratuitously abandons his
right against his creditor. The other terms used by the law are
condonation and remission. (see Art. 1270.)
(2) The persons disqualified to buy referred to in Articles 1490
and 1491 are also disqualified to become lessees of the things
mentioned therein. (Art. 1646.)

— oOo —