VOID CONTRACTS

There are 7 void or inexistent contracts, you read Article 1409. Now, in number 7, an example of
which is Article 1491 of the Civil Code, that is the prohibition on the part of judges, lawyers and
even the courts from participating in the auction of properties in custodia legis. This was applied by
the Supreme Court in the case of Buria v. Suplico and also Ek Liong.

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What are the characteristics of a void contract? Can third persons attack the validity of the
contract? Yes as long as their interest is directly affected. Is there a need of a court declaration of a
void contract? It depends on whether there is already performance because if there is nonperformance, what does it serve, the declaration of the nullity? For declaration lang but if there is
performance, there must be court declaration to declare the contract void. What is the reason?
Parties to the contract are not permitted to judge for themselves the nullity of the contract.
Some more characteristics:
It is inexistent and does not have any effect whatsoever;
No effect can flow from a void contract;
Cannot be ratified; and
The action for defense is merely defeated by laches
ARTICLE 1411. Remember the case of Ramirez v. Ramirez. It only applies when the act constitutes
a criminal offense and if there are effects, it shall be forfeited in favor of the State.
CASES:
Ramirez v. Ramirez: Was there forfeiture in the case of Ramirez? Of course not, there
were only made liable of the violation of the tax law. The criminal act there is the
avoidance of the payment of the estate taxes and not expenses for publication. It is not
mandatory requirement. Although it is a requirement, it is not one that when there is
noncompliance thereof would constitute s criminal offense. It is the act of avoidance of the
payment of estate taxes. If you evade, you will be liable criminally.
If borth are guilty, they cannot recover from each other what ome had delivered because the court
will leave them as they are because no action can be maintained in an illicit transaction ex pacto
ilicito non elitor accio.

ARTICLE 1412 refers to acts which do not constitute a criminal pffense but the reason that it is
void is the illegality of the cause. This will not apply to inexistent or absolutely fictitious contracts,
as held by the court in the case of Modina v. CA, and Ong v. Guan.
CASES:
Domingo v. CA - as general rule, old age does not incapacitate the person from entering
contracts validly for as long as it is shown that the party who is already of advanced age is
able to rightly, properly, intelligently protect her property rights. Which is not true in the
case of Domingo v. CA, which was true in Mendezona v. Ozamis. Moreover, the purchase
price in the case of Domingo is shocking to the conscience. There was gross inadequacy of
the price which consisted of several parcels of land and some of the properties were
improved.
Bautista v. Baustista - why void? This is different from rescissible contract. In rescissible
contract, that involved the heir whose share in the legitime is less than of supposed that
he will receive. In void, there was complete omission. He was ommitted from the partition
because the father, perhaps, does not like him so he excluded Teofilo. So thats the
difference between the last number in 1381 and on void contracts.
Hulst v. PR Builders - the application of Article 1414 because the purpose had not been
achieved, this is now the exception. Before there had been damage or injury caused to a
third person. In such case, the courts may, as public interest will thus be subserved, allow
the party repudiating the contract, allow the money recovered or property. Because it was

merely a contract to sell, not contract of sale and thus, there was no transfer yet of
ownership from the comtractor to the buyer who are foreigners who are not allowed to own
lands pursuant to constitutional prohibition pertaining to public or private lands.
ARTICLE 1422 is applied in the case of Gonzalo v. Tarnate.

NATURAL OBLIGATIONS
The provisions found on your code is actually examples of natural obligations. In order to defeat
the recovery by the party who had performed the contract, it must be shown that the delivery is
voluntary because if there is voluntariness, then the party who delivered could not longer be
allowed to recover. But if he only alot partial performance, does that mean that he had already
acknowledged the obligation? No. He cannot be compelled to deliver the balance, it merely a
natural obligation, which is purely based on conscience.
What I would like you to remember is Article 1430, as well as Article 1429, in relation to that. But in
all natural obligations, there must be voluntariness on the part of the person who had performed
the obligation.
What happens if the case is dismissed and the obligor performs the obligation, that is an example
of natural obligation. If the debtor performs, that is only the amount that he is willing to give,
unless when the debtor acknowledges the existence of the previous prescribed obligation, it
becomes the sufficient cause, the prescribed debt.

ESTOPPEL
What you should remember in Estoppel is Articles 1434, 1435, 1437. It might be asked in the
problems so to arrive at the complete answer, you should memorize Article 1437. Now, Article 1438
refers to personal property because 1437 refers to immovable property. The rules to be observed in
order that estoppel to apply to the party claiming a right over the immovable. The newer one is
promissory estoppel but it was also asked last year.
CASES:
Lim v. Queensland - involved foreign currency trading that he later reneged on his
obligation to bayaran yung advances kase they do not trade on dollars so it was converted
to persos. He said now that that agreement was void because they were trading in dollars
which was not allowed. Estoppel applies.
Accessories specialists - wag na kayo magbother dyan. Natanong na yan lasy year.
Republic v. CA - gasgas na ito.
Hermosilla v. Remoquillo - ano issue dito?
Asilo, Jr. v. People and Spouses Bombasi - for how long was the agreement? 20 years.
Bakit hindi sya naano sa pagkasunog?
Hojas v. Philippine Amanah Bank - this involved a loan which was secured by
mortgage. Bakit estoppel? There is estoppel on the part of the bank.

Final reminders:

All essay questions;

One of the questions is a reproduction of one of the cases;
Follow instructions.