CAPACITY TO BUY OR SELL

Art. 1489. All persons who are authorized in this Code to obligate themselves, may enter into a contract of sale, saving the modification contained in the

following articles.

Where necessaries are sold and delivered to a minor or other person without capacity to act, he must pay 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 of juridical, who can bind them selves by contract have also legal capacity. -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: Persons who cannot bind themselves-Relative: Only exists with reference to certain persons or a certain class of property.-There are no incapacities except provided by the law.

Liability for necessaries of minor or other person without capacity to act-Necessaries: Needed for sustenance, dwelling, clothing and medical attendance, in keeping with the financial capacity of the family of the incapacitated person. -Contracts entered into by a minor and other incapacitated persons (insane, demented, deaf-mutes, who cannot read/write) are voidable (Arts. 1327, 1390)-Where necessaries are delivered to him without the intervention of parents/guardians, he must pay reasonable price. (1489, part 2). It is valid, but the minor has the right to recover any excess above a reasonable value paid by him.

Sale by minors-Valid: Sale of real estate by minors who have passed puberty & adolescence and are now in the adult stage, when they have pretended to reach their majority, while in fact they have not.-Cannot be permitted afterwards to excuse themselves from compliance with the obligations assumed by them or to seek annulment.

Art. 1490 The husband and wife cannot sell property to each other except;(1) When a separation of property was agreed upon in the marriage

settlements(2) When there has been a judicial separation of property under article

191

Relative incapacity of husband and wife-Sale of property is void-Prohibited from making donations to each other-Judicial Separation of Property allows sale between husband and wifeReason For Prohibition under Art 1490-Primarily for the protection of third persons

Persons permitted to question sale

-Only heirs of the spouse or the creditors at the time of transfer may question the validity of the sale.-The government can also question the validity of sales subject to tax to avoid tax evasion

Art 1491 – The following persons cannot acquire by purchase even at a public or judicial auction, either in person or through mediation of another.

(1) Guardian(2) Agents; unless consent of the principal has been given(3) Executors and administrators; property of estate under administration(4) Public officers and employees, judges, government experts(5) Justices, judges, prosecuting attorneys, clerks of superior & inferior

courts(6) Any others especially those disqualified by the law

Incapacity by reason in relation to property-Persons listed above are prohibited from acquiring said property directly or indirectly, whether in public or private sale, because of their relation with the person under their charge or property under their control. They are the (1) Guardians (2) agents (3) executors (4) public officers (5) judicial officers and employees and lawyers (6) others especially prohibited by the law

Reason for prohibition under 1491-To prevent frauds, minimize temptations to the exertion of undue and improper influence.-Does not trust human nature to resist temptations likely to arise out of antagonism between the interest of the seller and buyer.-The fear that the greed might get the better sentiments of loyalty and disinterestedness is the reason, underlying Article 1491.