Article 1390

The following contracts are voidable or annullable, even though there may have been no damage to the contracting parties:


(1) Those where one of the parties is incapable of giving consent to a contract;


(2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.


These contracts are binding, unless they are annulled by a proper authority action in court. They are susceptible of ratification. (n)


Ang kasunduan ay walang bisa kung ang mga ito ay:

1) walang kapahintulutan ang batas sa kanila;

2) ito ay isang pagkakamali, kaguluhan, at pinilit ang isang partido.

Ang kasundun may bisa kung hindi tumutugon sa mga nabanggit. 


Discussion:

Voidable contracts are governed by Arts. 1390 to 1402. Consent is one of the three essential elements of contracts. If the consent of one of the parties is defective or vitiated, the contract is voidable. Defect or vitiation of consent is caused by either internal or external factors.


Consent, as an element of contracts, must be intelligent and free. If either attribute is impeded or impaired, then consent is said to be vitiated, and the contract voidable.


The factors that impair intelligence are:

1) minority (Art. 1327, par.) The age of emancipation, previously 21 under both the Civil Code and the Family Code, has been reduced by RA 6089 to 18;

2) insanity, deaf-mutism coupled with illiteracy, intoxication, and hypnotic spell (Arts. 1327, par. 2 and 1328)

The mistake must be caused by facts of which the party demanding annulment did not know. As held in Alcasid v. CA (237 SCRA 419 [1994]): insanity, deaf-mutism coupled with illiteracy, intoxication, and hypnotic spell (Arts. 1327, par. 2 and 1328)
.

To vitiate consent, the mistake or error must relate to:


1. the substance of the thing;


2. the principal conditions of the contract;

3. the identity or qualifications of one of the parties when such constituted the principal cause of the contract; or

4. the legal effect of the agreement, if the error is mutual and results in the frustration of the parties’ purpose.

Article 1391

The action for annulment shall be brought within four years.

This period shall begin: In cases of intimidation, violence or undue influence, from the time the defect of the consent ceases.

In case of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or others incapacitated persons, from the time the guardianship ceases. (1301a)

Ang hakbang para sa pagpapawalang bisa ay dapat gawin sa loob ng apat na taon.

Ito ay magsisimula, sa kaso ng intimidasyon, dahas o hindi tamang pag impluwensya, mula sa oras ng depekto ng pagpayag ay natapos.

Sa kaso ng pagkakamali o panloloko, magsimul ng oras ng pagka diskubre ng pagkakamali o panloloko

At kapag ang hakbang ay patukoy sa kontratang pinasok ng mga menor de edad o mga taong may kapansanan, mag simula sa oras na ang guardianship ay natapos.

Discussion:

This article only applies to the parties in the contract. It does not apply to a third person when the law allows them to question the validity of a contract

Failure to pursue an action within the period prescribed by law will have the effect of extinguishing the action.

With regard to fraudulent conveyances with the Registry of Property, the prescriptive period is counted not from the actual knowledge of the fraud by the plaintiff but from the registration of the public document with the said registry.  The act of registration is a notice to the whole world.  It is the operative acts thatt binds registered land s under the Torrens System.

Case Illustration: Felix Ullman vs. Vicente Hernaez

 

Article 1392

Ratification extinguishes the action to annul a voidable contract.

Ang pagpapatibay ay mawawala ang aksyon upang mapawalang bisa ang isang kontrata.

1. Confirmation, Ratification, Acknowledgment Distinguished

Technically and properly, the following terms must be used:

1. Confirmation – to cure a defect in a voidable contract.
2. Ratification- to cure the defect of lack of authority in an authorized contract (entered into by another).
3. Acknowledgment- to remedy a deficiency of proof (thus, an oral loan may be put in writing, or when a private instrument is made a public instrument).