Jdpagaduan Law on Property Notes

Chapter 7 - VOIDABLE CONTRACTS

1. What contracts are voidable or annullable?
2. Is damage to the contracting parties required before a contract is

deemed voidable or annullable?

3. What is the status of a voidable contract before it is annulled by a
competent court?
4. May a voidable contract be attacked directly or collaterally?
5. May a voidable contract be ratified or confirmed?

Art. 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, intimi dation,
undue influence or fraud.
These contracts are binding, unless they are annulled by a proper action in court.
They are susceptible of ratification.
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6. What is the prescriptive period for filing an action for annulment of a

voidable contract?
7. When should the computation of the prescriptive period begin for actions
arising from vitiation of consent due to intimidation, or violence or undue
influence?
8. When should the computation of prescriptive period begin for an action
arising from vitiation of consent due to mistake or fraud?
9. How is the start of the computation of the prescriptive period different
from the rule provided in fraudulent conveyances of land registered with
the Registry of Deeds? (see Balbin v. Medalla, 108 SCRA 666)
10. When should the computation of prescriptive period begin for an action
arising from vitiation of consent due to minority or other forms of
incapacity?
11. What are the legal consequences for failure to pursue the action within
the period prescribed by law?

Art. 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 other
incapacitated persons, from the time the guardianship ceases.
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12. What is ratification and confirmation? Differentiate.
13. What are the requisites of ratification to be deemed effective.
14. How may ratification be effected?
15. When does tacit ratification take place?

see sample SC cases cited in pp. 552-553, Pineda, Obligations and Contracts
16. Can contracts entered into by incapacitated persons be ratified by their
17.
18.
19.
20.
21.
22.

guardians?
Does ratification require the conformity of the contracting party who
has no right to bring the action for annulment?
What is the legal effect of ratification or confirmation of a voidable
contract?
When does the cleansing of the defect of a ratified voidable contract
take effect?
Will the retroactive effect of ratification in curing the defect of a
voidable contract, prejudice the rights of innocent third persons?
Is the right to ratify a voidable contract a transmissible right?
What is the status of a voidable contract that is not ratified?

Art. 1392. Ratification extinguishes the action to annul a voidable contract.

Art. 1393. Ratification may be effected expressly or tacitly. It is understood that
there is a tacit ratification if, with knowledge of the reason which renders the
contract voidable and such reason having ceased, the person who has a right to
invoke it should execute an act which necessarily implies an intention to waive his
right.
Art. 1394. Ratification may be effected by the guardian of the incapacitated
person.
Art. 1395. Ratification does not require the conformity of the contracting party
who has no right to bring the action for annulment.

Art. 1396. Ratification cleanses the contract from all its defects from the moment
it was constituted.
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23. Who has the prerogative or the right to file an action for annulment of
24.
25.
26.

27.
28.

29.
30.

a voidable contract? (see relevant SC cases cited in p. 557- 558, Pineda)

What is the exception to the gen. rule that only those principally or
subsidiarily bound by the contract may file an action for annulment?
Does the party who caused the vice of consent in the contract, or
through a third person allowed to file annulment of the contract?
Can a minor who deliberately misrepresented his age in a contract later
invoke his minority to set aside or annul the contract? (see: Mercado v.
Espiritu, 37 Phil. 215, and compare with Braganza v. De Villa Abrille, 105 Phil. 456)
May a person sui juris annul a contract on the ground of incapacity of
the other party? Why?
If a voidable contract has been perfected and its prestations performed
by the parties, but later annulled by the court, what are the duties of
the contracting parties of the annulled contract?
What does the duty of mutual restitution consist of? (see Arts. 1398 & 2209)
Is the rule of mutual restitution absolute, or does it allow for an
exception? What is the exception, if any?
see p. 607 Tolentino; apply also legal principles of Arts. 19, 20, 21, Civil Code

31. Once a voidable contract is annulled, contracting parties must restore

things received with their fruits and the price with interest, EXCEPT IN
CASES PROVIDED BY LAW.
Please note the discussion of Tolentino on p. 608-609.
Also, note the rules on possession relative to Fruits such as Arts. 544, 549
32. When the defect of the contract is due to the incapacity of one of the

contracting parties, can the latter be obliged to make restitution?

33. Is there an exception to your answer in #32?
34. What is the doctrine of Parens Patriae?
35. If a contract is annulled due to incapacity of one party, is the
capacitated party obliged to return any thing he received from the minor
or incapacitated party? Is there an exception to this?

Art. 1397. The action for the annulment of contracts may be instituted by all who
are thereby obliged principally or subsidiarily. However, persons who are capable
cannot allege the incapacity of those with whom they contracted; nor can those
who exerted intimidation, violence, or undue influence, or employed fraud, or
caused mistake base their action upon these flaws of the contract.
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Art. 1398. An obligation having been annulled, the contracting parties shall
restore to each other the things which have been the subject matter of the
contract, with their fruits, and the price with its interest, except in cases provided
by law.
In obligations to render service, the value thereof shall be the basis for damages.
Art. 1399. When the defect of the contract consists in the incapacity of one of the
parties, the incapacitated person is not obliged to make any restitution except
insofar as he has been benefited by the thing or price received by him.
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36. What is the rule if the person who has a right to file an action to annul

the contract (plaintiff) can no longer return the thing object of the
contract because of its loss due to his own fault or fraud? (Tolentino, p. 612)
Will the same rule apply if plaintiff is a minor ?
37. Will the action for annulment still prosper if the object of the contract

has been lost by the plaintiff or the party who has the right to institute
the action but without his fault or due to fortuitous event? (Tolentino, p.
613)
Is the action for annulment by plaintiff now extinguished?
Can plaintiff still compel defendant to make restitution?
If the thing is lost by Plaintiff without his fault but due thru
fortuitous event, and as substitute for the thing lost, he offers to
pay its value at the time of loss. Can he now compel defendant to
also make restitution?
38. What is the rule if Defendant, the person obliged by the decree of

annulment to return the thing cannot do so because it has been lost

through his fault or fraud? (Tolentino, p. 612)
39. What about if the loss is due to fortuitous event, without fault by the
contracting party obliged to return the thing (Defendant), will the action
for the annulment of contract by plaintiff still prosper? (Tolentino, pp. 613614; read Dumasug v. Modelo, 34 Phil. 252)
Will the Defendant in this case be held liable or not?
40. What are the other causes for extinguishment of the action for

annulment of a voidable contract besides Art. 1401?

41. What is the rule if the party obliged to return the fruits and accessions
of the property object of the contract cannot do so due to his fault or
fraud?
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42. What are the legal consequences, if after the court ordered the parties

to do mutual restitution, one of them cannot restore what he is bound to

return?

Art. 1400. Whenever the person obliged by the decree of annulment to return the
thing cannot do so because it has been lost through his fault, he shall return the
fruits received and the value of the thing at the time of the loss, with interest from
the same date.
Art. 1401. The action for annulment of contracts shall be extinguished when the
thing which is the object thereof is lost through the fraud or fault of the person
who has a right to institute the proceedings.
If the right of action is based upon the incapacity of any one of the contracting
parties, the loss of the thing shall not be an obstacle to the success of the action,
unless said loss took place through the fraud or fault of the plaintiff.
Art. 1402. As long as one of the contracting parties does not restore what in virtue
of the decree of annulment he is bound to return, the other cannot be compelled
to comply with what is incumbent upon him.