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 (Support).
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. Persons who are merely
relatively 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 implication for the
reason that such construction would be in conflict with the very
nature of Article 1489.
NECESSARIES DEFINED
Those things which are needed for sustenance, dwelling,
clothing, medical attendance, education and transportation
according to the financial capacity of the family of the
incapacitated person. Whether the nature of the contract is
such that it can under any circumstances, be regarded as a
contract for necessaries, is a question which depends upon
the facts of the particular case.
PURCHASE BY MINORS
Generally, the contracts entered into by a minor and other
incapacitated persons (e.g., insane or demented persons,
deafmutes 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. 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 court cannot be permitted afterwards to excuse

themselves from compliance that 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, and they 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.
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 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.
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.
(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 property decreed
between them by the court, the sales between husband and wife are allowed. They
have, therefore, in the two cases mentioned, capacity to buy from or to sell to each
other
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.
Persons permitted to question sale
(1)Although certain transfers between husband and wife are prohibited
under Article 1490, such prohibition can be taken advantage 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.
(2) The government is always an interested party in all matters
involving taxable transactions. It is competent to question their validity
or legitimacy whenever necessary to block tax evasion. It can impugn
sales between husband and wife
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, 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) executors and administrators;
(4) public officers and employees;
(5) judicial officers, employees and lawyers; and
(6) others especially disqualified by law.
The persons disqualified to buy referred to in Articles 1490 and 1491 are also
disqualified to become lessees of the things mentioned thereon.
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 or
indirectly, in view of the fiduciary relationship involved or the peculiar
control exercised by these individuals over the properties or rights
covered. 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 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 buyer
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 transaction 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 guardian’s functions are to any extent still
unperformed, while the property is still under his control
and until the accounts have been finally settled.
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 person. Like the guardian, the agent
stands in a fiduciary relation with his principal. A sale made by an agent to
himself, directly or indirectly, without the permission of the principal is
ineffectual.) The consent of the principal removes the transaction out of the
prohibition contained in Article 1491.
(1) The incapacity of the agent is only against buying the property he is
required to sell during the existence of the relationship. Therefore, an agent
can buy for himself the property after the termination of the agency or
other properties different from those he has been commissioned to sell.

(2) Of course, the agent may buy property placed in his hands for sale or
administration if the principal gives his consent thereto.
Prohibition with respect to executors and
administrators
The prohibition refers only to properties under the
administration of the executor or administrator at the time
of the acquisition 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 executor 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 pertaining to the estate.
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 administration 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.
Prohibition with respect to judges, etc., and lawyers

The prohibition in Article 1491 applies only to the sale or

assignment of property which is the subject of litigation to
the persons disqualified therein. For the prohibition to
operate, the sale or assignment must take place during the
pendency of the litigation involving the property. The
prohibition applies when, for example, a lawyer has not
paid for the property and it was merely assigned to him in
consideration of legal services rendered at a time when the
property is still subject of a pending case. The prohibition
on purchase is all embracing to include not only sales to
private individuals but also public or judicial sales.
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.
Cases not covered
The prohibition does not include sale of; nor does it apply to an
assignment of the amount of a judgment made by a person to his
attorney in payment of professional services in other cases; nor to the
sale of a parcel of land, acquired by a client to satisfy a judgment in
his favour, to his attorney as long as the property was not the subject
of the litigation. 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
litigation, because the payment of said fee is not made during the
pendency of the litigation but only after judgment has been rendered
in the case handled by the lawyer.
Other persons especially disqualified
Examples of persons especially disqualified by law are: (1) aliens who are
disqualified to purchase private agricultural lands (Art. XII, Secs. 3, 7,
Constitution
(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 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.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 cannot 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 person.
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. The
defect can be cured by ratification of the seller.
(2) With respect to Nos. 4 to 6, the sale shall be null and void,
public interests being involved therein. In a case, the Supreme
Court affirmed the decision of a lower court declaring invalid the
sale made by the client in favour of his attorney