Which of the following contracts is not rescissible
|
Contracts from Geraldine Marasigan Show Meaning of rescissible contracts. Rescissible contracts are those validly agreed upon because all the essential elements exist and, therefore, legally effective, but in the cases established by law, the remedy of rescission is granted in the interest of equity. Binding force of rescissible contracts. They are valid and enforceable although subject to rescission by the court when there is damage or prejudice to one of the parties or to a third person. In a rescissible contract, there is no defect at all but by reason of some external facts, its enforcement would cause injustice. Meaning of rescission. Rescission is an equitable remedy granted by law to the contracting parties and sometimes even to third persons in order to secure reparation of damages caused them by a valid contract, by means of the restoration of things to their condition prior to the celebration of said contract. This remedy should be distinguished from rescission under Article 119 in case of breach of obligation (infra.), or rescission of a contract by mutual consent of the parties (infra.) which shall be governed by their agreement or other legal provisions but not by Chapter 6. Requisites of rescission. The following are the requisites in order that the remedy of rescission under this Chapter may be availed of: (1) The contract must be validly agreed upon; (2) There must be lesion or pecuniary prejudice or damage to one of the parties or to a third person (Art. 1381.); (3) The rescission must be based upon a case especially provided by law (Arts. 1380, 1381, 1382.); (4) There must be no other legal remedy to obtain reparation for the damage (Art. 1383.); (5) The party asking for rescission must be able to return what he is obliged to restore by reason of the contract (Art. 1385, par. 1.); (6) The object of the contract must not legally be in the possession of third persons who did not act in bad faith (Ibid., par. 2.); and (7) The period for filing the action for rescission must not have prescribed. (Art. 1389.) Example: Kara sues Mia for the recovery of a parcel of land. In this case, the land is a “thing under litigation.” If, during the pendency of the case, Mia sells the land to a third party without the approval of Kara or of the court, the sale is rescissible at the instance of Kara in case she wins in her suit for the recovery of said land unless the third party is in legal possession of the land in good faith. Article 1381. The following contracts are rescissible: (2) Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the preceding number; (3) Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them; (4) Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority; (5) All other contracts specially declared by law to be subject By: Kristia Capio Artikulo 1381. Ang sumusunod na mga kontrata ay maaring ikansila: (1) Yaong mga ipinasok ng mga tagapangalaga kapag ang kanilang inaalagaan na kanilang kinakatawan ay walang kakayahan mahigit sa ika apat ng halaga ng mga bagay na siyang kadahilanan; (2) Yaong mga napagkasunduan na patungkol sa wala, kung ang huli ay mayroon kwalang kakayahan na nakasaad sa naunang bilang; (3) Yaong mga pagsasaayos na maypanlinlang sa mga nagpapautang ang nahuli ay hindi na sa anu man paraan makaka singil pa; (4) Yaong mga nauukol sa mga bagay na napapailalim ng hukuman kung iyon ay pinasok ng nasasakdal na walang kaalaman at pagsang-ayon ng mga nasasakdal o ng hukuman may karampatan kapangyarihan; (5) Lahat nang ibang mga kontrata na lalong itinakda ng batas na maaring ipawalang bisa/ ikansila. CASES OF RESCISSBLE CONTRACTS (1) Contracts entered into in behalf of wards. — A ward is a person under guardianship by reason of some incapacity. As a rule, the powers of the guardian with respect to the property of the ward are limited to mere acts of administration. EXAMPLE: Gina is the guardian of Wendell (ward). Gina sells the property of Wendell worth 20M for only 14M. The contract of sale can be rescinded because the lesion is more than one-fourth. Wendell can rescind the sale by proper action in court upon reaching the age of majority. (2) Contracts agreed upon in representation of absentees. — An absentee is a person who disappears from his domicile, his whereabouts being unknown, and without leaving an agent to administer his property. Likewise, the absentee must suffer lesion by more than one-fourth of the value of the property object of the contract to entitle him to the remedy of rescission. It must be noted that paragraphs 1 and 2 refer only to transactions by guardians and absentees’ representatives. Rescission cannot take place if the contracts have been approved by the court. As a general rule, lesion does not invalidate a contract except only in special cases specified by law. EXAMPLE: Wendell, the owner of a resort in Laguna, left his property without notice and without leaving a representative to take care of his property. Bea, a family friend, volunteered in taking over Wendell’s business. Due to a storm, Wendell’s business is greatly affected due to destruction of some of the buildings of the resort and needs additional funds to recover from such distress. Bes decided to sell one property of Wendell worth 15M and sold it for only 10M. When Wendell returned, Wendell can rescind the contract of sale made by Bea because the lesion is more than one-fourth. (3) Contracts undertaken in fraud of creditors. — The action to rescind in fraud of creditors is known as accion pauliana. Here, as in No. (4), the remedy of rescission may be availed of by a third person. Such contracts are usually made without the knowledge of the creditors. In order that fraud of creditors may be a valid ground for rescission, the following requisites must also be present: (a) There must be an existing credit prior to the contract to be rescinded, although it is not yet due or demandable later; EXAMPLE: Gina made a donation of a parcel of land to Wendell. Before the date of the donation, Gina had contracted several debts. With the donation to Wendell, the remaining property of Gina is not sufficient to pay all her debts. The donation can be rescinded because the alienation is presumed in fraud of creditors. (4) Contracts which refer to things under litigation. — In No. (3), the purpose of the remedy is to secure the payment of an existing credit of a third person against a party to a contract sought to be rescinded. Here, the purpose is to make effective the claim of a party litigant over a thing under litigation which was the object of a contract entered into by the other party with another person. The right to file the action for rescission arises in favor of the plaintiff when the defendant enters into a contract over the thing in litigation without the knowledge or approval of the plaintiff or the court. EXAMPLE: Sandy sues Ben for the recovery of a parcel of land. In this case, the land is a “thing under litigation.” If, during the pendency of the case, Ben sells the land to Cathy without the approval of Sandy or of the court, the sale is rescissible at the instance of Sandy in case she wins in her suit for the recovery of said land unless Cathy is in legal possession of the land in good faith. Sandy, however, may protect his right by filing a notice of lis pendens.
Article 1382. Payments made in a state of insolvency for obligations to whose fulfillment the debtor could not be compelled at the time they were effected, are also rescissible. by: Bryan Glenn Fabiaña Kabayaran na ginawa noong siya ay walang pambayad sa obligasyon na kung saan ang pagsasakatuparan, ang nangungutang ay hindi marring pilitin sa panahon ang mga ito ay epektibo at maari ring ipawalang bisa. Comment: This article deals with rescission of payments. There are two conditions that must concur for the article to be applicable. 1st – the debtor must be in a state of insolvency and insolvency need not be judicially declared; 2nd- the payment exacted from him is for a debt not yet due and demandable. Rescissible contracts are those validly agreed upon because all the essential elements exist and therefore legally effective but in the cases establish by law, the remedy of rescission is granted in the interest of equity. A debtor is insolvent if he does not have sufficient properties to meet his obligations. Illustration: ABC an insolvent corporation owed Jose one hundred thousand pesos. although the debt is not yet enforceable, the corporation delivered a deed of sale covering one of its properties to Jose as payment for the debt. However the value of the property is much greater that the amount rescissible because it was made by the debtor who is in a state of insolvency in payment of an obligation which is not yet due. Article 1383. The action for rescission is subsidiary; it cannot be instituted except when the party suffering damage has no other legal means to obtain reparation for the same. By Janine Gumangol Ang pagpapawalang-bisa ay nakakatulong; hindi ito magagamit maliban kung ang panig na nagtitiis ng danyos ay walang ibang makabatas na pamamaraan na makakuha ng kabayaran o kapalit nito. COMMENT: Rescission is not a principal remedy; it is only subsidiary and may only be availed of by the injured party if has no other legal means of seeking redress or reparation for the damages caused. If, therefore, it is found out that the debtor has no other property than that which is the object of the resindable contract, rescision may merely be applied, provided that all the essential requisites for rescission are present. (Regalado v. Luchsinger and Co., 5 Phil 625) When a creditor seeks to set aside a contract as fraudulent, he must prove first that he really is a creditor, and secondly, that he cannot collect his debt in any other way. Article 1384. Rescission shall be only to the extent necessary to cover the damages caused. By: Algy Riguer Ang pagpapawalang bisa ay dapat lamang na kung kinakailangan na maisama ang pinsala na nagging sanhi. Extent of rescission. The entire contract need not be set aside by rescission if the damage can be repaired or covered by partial rescission. The rescission shall only be to the extent of the creditor’s unsatisfied credit. The policy of the law is to preserve or respect the contract, not to extinguish it. Gino, the guardian of Mia, a minor was authorized by the court to sell two parcels of land valued at P200,000.00 each. Gino sold the two properties to Bitoy for only P200,000.00. In this case, the entire contract need not be rescinded. Rescission may properly be applied only to one parcel to cover the damage caused by Gino. (see Art. 1381[1].) But if Gino or Bitoy is willing to pay the difference of P200,000.00, rescission is precluded. Article 1385. Rescission creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interest; consequently, it can be carried out only when he who demands rescission can return whatever he may be obliged to restore. Neither shall rescission take place when the things which are the object of the contract are legally in the possession of third persons who did not act in bad faith. In this case, indemnity for damages may be demanded from the person causing the loss. By: Rose Ann Villanueva Ang pagwawalang bisa sa kontrata ay gumagawa ng obligasyon na ibalik ang mga bagay na tinutukoy sa kontrata, kasama ng kanyang bunga, at ng halaga pati interes; dahil dito, magagawa lamang ito kung ang humingi ng pagwawalang bisa ay maibibigay ang anumang obligahin niyang ibalik. Hindi mapapawalang bisa ang kontrata kapag ang mga bagay na kailangang ibalik ay nasa legal na pagmamay-ari na ng ibang taong wala namang masamang intensyon. Rescission creates an obligation of mutual restitution. When the court declares a contract rescinded, the parties must return to each other (1) object of the contract with its fruits (2) the price thereof with legal interest. Purpose: Restore the parties to their original situation. The law presumes that the party who received the object of the contract has enjoyed the fruits thereof while the other has used the money which is the price of the object. With respect to the fruits, the rules on possession shall govern. Mutual restitution also applies to voidable contracts. Article 1386. Rescission referred to in Nos. 1 and 2 of Article 1381 shall not take place with respect to contracts approved by the courts. By: Jayson Calventas Ang pagbawi na tinutukoy sa Blg. 1 at 2 ng Artikulo 1381 ay hindi magaganap sa mga kasunduang inaprubahan ng hukuman. Article 1386 NCC | speaks of… Contracts approved by the courts
Article 1386 NCC | example:
Article 1387. All contracts by virtue of which the debtor alienates property by gratuitous title are presumed to have been entered into in fraud of creditors, when the donor did not reserve sufficient property to pay all debts contracted before the donation. Alienations by onerous title are also presumed fraudulent when made by persons against whom some judgment has been issued. The decision or attachment need not refer to the property alienated, and need not have been obtained by the party seeking the rescission. In addition to these presumptions, the design to defraud creditors may be proved in any other manner recognized by the law of evidence. By: Johannes Aquino Ang donasyon na kung saan ang nagbigay ay hindi nag-iwan ng sapat na ari-arian upang mabayaran ang kanyang pagkakautang ay hinihinalang ginawa upang makapanloko sa kayang mga pinagkakautangan, gayundin ang pagbebenta na kung saan ang may utang ay nahatulan na korte. Hindi kailangan na ang hatol ay para sa ari-ariang binenta, at hindi rin kailangan na ito ay ginawad sa panig na gustong magpawalang bisa ng kasunduan. When alienation presumed in fraud of creditors. The general rule is that fraud is not presumed. As fraud is criminal in nature, it must be proved by clear and preponderance of evidence. (1) Instances not exclusive. — Article 1387 establishes presumptions of fraud in the case of alienation by the debtor of his property. (pars. 1 and 2.) However, the instances mentioned are not exclusive of others that may be proved in any other manner recognized by the law of evidence. (par. 3; see Art. 1177.) The presumptions are disputable and may be rebutted by contrary evidence. (infra.) (2) Presumption not applicable in the absence of transfer. — The presumption in Article 1387 applies only when there has in fact been an alienation or transfer, whether gratuitously or by onerous title. The effect of the presumption is to shift the burden to the one who alienated to prove that the transfer was not fraudulently made. (3) Only actual creditors can ask for rescission. — Under the Civil Code (Arts. 1381[3], 1387.), only actual creditors can ask for the rescission of the conveyance made by their debtors in favor of strangers. The waiver and release made previously by the creditor of the credit he held against the debtor operate to deprive the rescissory action of any legal basis. (4) Vendor, an indispensable party in action for rescission of sale. — An action for rescission of sale under Article 1387 cannot be finally determined without the presence in court of the vendor. For any decision on the action or claim for damage would affect him. He is entitled to be heard. Test for determining whether a conveyance is fraudulent. “In determining whether or not a certain conveyance is fraudulent, the question in every case is whether the conveyance was a bona fide transaction or a trick and contrivance to defeat creditors, or whether it conserves to the debtor a special right. It is not sufficient that it is founded on good consideration, or is made with bona fide intent; it must have both elements. If defective in either of these particulars although good between the parties, it is rescindible as to creditors. The rule is universal both in law and in equity that whatever fraud creates, justice will destroy. The test as to whether or not a conveyance is fraudulent is: Does it prejudice the right of creditors?” EXAMPLES: (1) Alienation by gratuitous title. — Princess Sarah made a donation of a parcel of land to Becky. Before the date of the donation, Princess Sarah had contracted several debts. With the donation to Becky, the remaining property of Princess Sarah is not sufficient to pay all her debts. Under the first paragraph, the donation is presumed to be fraudulent unless proved otherwise. (2) Alienation by onerous title. — (a) Suppose in the preceding example, the contract is a sale. Under the second paragraph, the sale to Becky is not presumed fraudulent. The creditors of Princess Sarah must show that the conveyance will prejudice their rights. However, the presumption of fraud will arise in case the sale was made by Princess after some judgment has been rendered against him or some writ of attachment has been issued against him. (b) Suppose again that Cedie, a creditor of Princess Sarah, has obtained a judgment or writ of attachment in his favor. Then Princess sold to Heidi another parcel of land which has not been levied upon or attached. The sale to Heidi is also presumed fraudulent because the law says “the decision or attachment need not refer to the property alienated.” (c) Becky is another creditor of Princess Sarah. Does she have the right to rescind the sale to Heidi? Yes, because the law says that “the decision or attachment . . . need not have been obtained by the party seeking the rescission.” Article 1388. Whoever acquires in bad faith the things alienated in fraud of creditors, shall indemnify the latter for damages suffered by them on account of the alienation, whenever, due to any cause, it should be impossible for him to return them. If there are two or more alienations, the first acquirer shall be liable first, and so on successively. By: Kristia Capio Artikulo 1388. Kung sino man ang nakakuha na maymasamang hangarin sa bagay na inalis na may panlilinlang sa mga nagpapautang, ay magbabayad duon sa huli ukol sa mga damyos na kanyang sinapit dahil sa pagaalis, kung, sa anu man kadahilanan, iyon ay imposible na naisauli niya sa kanila. Kapag mayroon dalawa o mahihgit pang pag aalis, ang naunang nakakuha ng pagaari ang siyang mananagot doon sa nauna at doon sa ibang magkakasunod. The purchaser in bad faith, who acquired the object of the contract alienated in fraud of creditors, must return the same if the sale is rescinded (see Art. 1383.) and should it be impossible for him to return it due to any cause, he must indemnify the former. Should there be two or more alienations, the first acquirer shall be liable first, and so on successively. EXAMPLES: (1) Sandy sold her car to Ben in order to avoid the payment of her debt to Cathy, her creditor. Ben knew of Sandy’s purpose. If the sale is rescinded, Ben must return the car. Should the car be destroyed with or without his fault, then Cathy is entitled to be indemnified for damages by Ben. (2) Suppose, Ben transferred the car to Dan who also acted in bad faith. Then Dan sold it to Emma who did not know of the purpose behind the previous conveyance. As the first acquirer. Ben is liable first. If he cannot pay, then Dan will be liable. If Ben acted in good faith, the good or bad faith of Dan is not important, except where Dan connived with Sandy to make Ben a mere innocent intermediary in which case Dan can be held liable. Article 1389. The action to claim rescission must be commenced within four years. For persons under guardianship and for absentees, the period of four years shall not begin until the termination of the former’s incapacity, or until the domicile of the latter is known. by: Bryan Glenn Fabiaña Ang pag sasagawa sa pag wawalang bisa ay dapat gawin sa loob ng apat na taon. Para sa mga taong nasa pangangalaga pa, ang panahon na apat na taon ay hindi nagsisimula hanngang sa terminasyon ng taong nabaggit sa kanyang kawalan ng kakayahan o hanggang ang kinaroroonan ng taon nawala sa matagal na panahon ay tukoy. Comment: As a general rule, the prescriptive period within which to file a rescissory action is four years. the reckoning time however may vary depending upon the circumstances: (a) If the complaining party is a third person who has no participation in the contract the prescriptive period is four years reckoned from the discovery of the fraudulent contract or from the registration thereof if real property is involved; (b) If the complaining party is a minor or people under guardianship the action to rescind must be done within four years after attaining the age of majority; (c) If the complaining party is an absentee he should file an action for rescission within four years from the time his domicile has been known. An absentee is one who has disappears from his domicile and his whereabouts are unknown without leaving an agent to administer his properties. Consequently, when she appears in his domicile he ceases to be an absentee as long as he informs the court of his presence. Which is not a Rescissible contract?Unenforceable contracts that lack authority, capacity, or both parties' consent. Contracts that are not compliant with the Statute of Frauds or entered into on behalf of another party without their authority.
What is Rescissible?: capable of being rescinded.
What contract can be rescinded?Rescinding a contract may be an option if there is proof that there was a material error in the contract. Evidence of fraud, mutual errors, lack of legal or mental capacity, duress and undue influence, or one party not fulfilling its obligation can also lead contracts to be voided.
Which of the following contracts Cannot be ratified?While both a void and voidable contract are null, a void contract cannot be ratified. In a legal sense, a void contract is treated as if it was never created and becomes unenforceable in court.
|
