Article 1403

The following contracts are unenforceable, unless they are ratified:

• Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;
• These that do not comply with the Statute of Frauds as set forth in this number. In the following cases, an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents.

1. An agreement that by its terms is not to be performed within a year from the making thereof;
2. A special promise to answer for the debt, default, or miscarriage of another;
3. An agreement made in consideration of marriage, other than mutual promise to marry;
4. An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidence, or some of them of such things in action, or pay at the time some part of the purchase money; but when the sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum;
5. An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein;
6. A presentation as to the credit of a third person.
7. Those where both parties are incapable of giving consent to a contract.

Ang mga sumusunod na kontrata ay hindi naipapatupad, maliban na lang kung ito ay napagtibay:

1. Ung mga naipasok sa pangalan ng ibang tao sa pamamagitan ng isang tao na walang karapatan o legal representation, o yung gumaganap na lampas sa kanyang kapangyarihan;
2. Ung mga hindi sumusunod sa statute of frauds. Sa mga sumusunod na kaso, na ang kasunduan na ginawa ay hindi dapat ipatupad sa pamamagitan ng pag gawa, maliban kung magkatulad, o mayroong note o memorandum, na nakasulat, at naka subscribed sa partido, o sa kanyang agent; ang ebidensya, samakatuwid, na napagkasunduan ay hindi dapat matanggap ng walang nakasulat/nakasaad, o ng ikalawang ebidensya ng nilalaman nito.
3. Ang kasunduan na ayon sa termino ay hindi dapat gawin sa loob ng taon simula sa paggawa nito;
4. Ang special na pangako na sagot sa pagkakatutang, pagkukulang, o maling pagdadala ng iba;
5. Ang kasunduan na ginawa sa konsiderasyon ng kasal, na iba sa parehong pangako ng pagpapakasal
6. Ang kasunduan sa pagbebenta ng kalakal, at ng mga bagay, sa presyong hindi bababa ng limang daang piso, maliban kung ang bumibili ay nakatanggap at tinanggap ang bahagi ng kalakal at mga bagay, o ang ebidensya, o anu man sa kanila tulad ng bagay sa aksyon, o nagbayad sa oras ng ibang bahagi ng bayad; ngunit kapag ang pagbebenta ay ginawa sa pagbebenta sa mataas na halaga at ginawa ng auctioneer sa kanyang binebentang libro, sa oras ng pagbebenta, ng halaga at uri ng ari-arian na binenta, termino ng pagbebenta, presyo, pangalan ng bumili at ng tao kung saan nabilang ang pagbebenta, iyon ay sapat na bilang isang memorandum;
7. Ang kasunduan sa pagpapaupa sa mahabang panahon higit pa sa isang taon, o sa pagbebenta ng real property o ng interest na nakapaloob ditto;
8. Ang pagprepresent ukol sa utang ng third person.
9. Ung parehong partido na walang kakayahan na magbigay ng pahintulot sa kontrata.

Statute of Frauds – is descriptive of those laws, statutes, or provisions which require certain agreements to be in writing before they can be proved and enforced in a judicial action.

The basic purpose of the statute is to prevent fraud and not to encourage its commission.

 Case Illustration: Bumanlag vs. Alzate

Article 1404

Unauthorized contracts are governed by Article 1317 and the principles of agency in Title X of this Book.

Ang hindi pinapahintulutang kontrata ay pinapamahalaan ng artikulo 1317at mga simulain ng ahensiya sa ikasampung titulo ng aklat na ito.

Discussion:

Other provisions of law that governs unauthorized contracts are the following:

1. Article 1317 which provides –

“No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party. (1259a)”

1. Articles 1868 – 1932 in the law of agency under title 10 of the code.

Note: Unauthorized contracts are susceptible to ratification.

Article 1405

Contracts infringing the Statute of Frauds, referred to in No. 2 of article 1403, are ratified by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefit under them.

          Ang mga kontratang lumalabag sa batas ng Statute of Frauds na tinutukoy sa No. 2 ng artikulo 1403, ay pinagtibay ng kabiguan ng pagtutol sa presentasyon ng pananalitang ebidensiya upang patunayan ang pandaraya, o dahil sa pagtanggap ng mga kapakinabangan sa ilalim nito.

Discussion

Uneforceable contracts (paragraph 2, Article 1403: Statute of Frauds) may be ratified in two ways:

1. Failure to object to the presentation of oral evidence. This is tantamount to a waiver. Contracts that are infringed in the Statute of Frauds are ratified by the failure to object to the presentation of parol evidence and are enforceable
2. Acceptance of Benefits under these contacts is equivalent to waiver or estoppel; only applies to executor contracts. If the oral contract was reduced into writing by the party charged, this exercise is called recognition. It is the express ratification of the contract.

*** If the party in whose favor the statute may be invoked, cross examined the witness who is testifying on the oral contract, the former is deemed to have waived the right to object to the admission of the testimonial evidence.

The party should promptly object to the presentation of the witness once it becomes apparent that no evidence in writing could be presented to prove the contract. The objection must be invoked during the “offer of the testimony” of the witness. OR a motion to dismiss may be filed before answer to the complaint is filed.

Case Illustration: Abrenica vs. Gonda