I. Introduction

In Philippine law, the contract of sale is one of the most common and economically important contracts. For a sale to be valid, the Civil Code requires the presence of the essential elements of a contract: consent, object, and cause (price).

Capacity to give consent is not just a personal attribute; in many situations, it is shaped and limited by public policy, family relations, or fiduciary obligations. This is where the concept of relative incapacity to consent becomes crucial.

Relative incapacity does not mean that a person is generally incapable of entering into contracts. Instead, it means that a person who is otherwise fully capable is disqualified from entering into certain contracts of sale with certain persons or involving certain properties. The limitation is “relative” — confined to particular relationships or situations — and it is especially developed in sales law.

II. Consent and Capacity in Philippine Contract Law

Under the Civil Code, a contract is perfected by the meeting of the minds on the object and the price. Consent must be:

Intelligent – given with sufficient awareness of the nature and consequences of the contract.
Free – not vitiated by violence, intimidation, undue influence, or fraud.
Spontaneous – not conditional in a way that negates true agreement.
Given by a person with capacity to act – someone who is legally allowed to enter into the transaction.

The Code distinguishes between:

Juridical capacity – the fitness to be the subject of legal relations (all persons have this).
Capacity to act – the power to do acts with legal effect, which may be limited or modified by law.

In the context of sales, capacity to act is what matters. Even if parties are mentally competent and of legal age, the law may still disqualify them from entering into a specific sale because of relative incapacity.

III. Absolute vs. Relative Incapacity

The law distinguishes two broad types of incapacity:

1. Absolute incapacity (general)

This refers to persons who cannot generally give consent to any contract, e.g.:

Unemancipated minors
Insane or demented persons
Deaf-mutes who do not know how to write

Contracts entered into by such persons (except for those relating to necessaries or other special exceptions) are typically voidable — valid until annulled, and capable of ratification once the cause of incapacity ceases or a guardian ratifies them.

2. Relative incapacity (special, situational)

Relative incapacity applies to persons who are generally capacitated, but are disqualified from buying certain properties, or from selling to or buying from certain persons, due to:

Public policy
Fiduciary duties
Conflict-of-interest concerns
Protection of family property or third parties

In sales law, relative incapacity is mainly embodied in provisions that prohibit certain persons from being buyers in specific sales. The classic examples are:

Sales between spouses
Sales involving guardians, agents, executors/administrators, public officers, and lawyers with respect to properties under their authority or in litigation

It is not that they lack mental capacity; rather, the law imposes ethical and policy-based limits on their freedom to contract.

IV. Statutory Basis of Relative Incapacity in Sales

Relative incapacity in the context of sales is principally found in the Civil Code provisions on sales, particularly:

The prohibition on sales between spouses (e.g., husband and wife).
The prohibition on certain persons acquiring property by purchase, even at public or judicial auction, such as:
- Guardians
- Agents, with respect to property under their administration or sale
- Executors and administrators
- Public officers and other officers connected with administration of justice
- Those otherwise specially disqualified by law

These provisions create specific disqualifications on the buyer side, which affect the existence and validity of consent.

V. Relative Incapacity Between Spouses

1. Basic rule

As a general rule, spouses are prohibited from selling property to each other. The rationale is:

To prevent fraud on creditors (e.g., one spouse shielding property from claims by transferring to the other).
To preserve family property regimes against simulated transfers.
To avoid abuses within a marriage where one spouse might be unduly pressured to convey property to the other.

This incapacity is relative because:

Each spouse is fully capacitated to buy and sell with third persons.
They are disqualified only in relation to each other, and only as to sales (and closely analogous contracts).

2. Exceptions

The Civil Code allows certain exceptions where sales between spouses are valid, particularly where:

There is an agreed separation of property in the marriage settlements, or
There has been a judicial separation of property.

In these cases, the policy concern (commingled property and risk of fraud upon creditors or family) is substantially reduced or structurally addressed, so the law relaxes the prohibition.

3. Interaction with marital property regimes and the Family Code

In the Philippine system, spouses may be under:

Absolute community of property
Conjugal partnership of gains
Complete separation of property (by marriage settlements or court decree)

The prohibition on sales between spouses is understood in relation to these regimes:

Where property is community or conjugal, a sale by one spouse to the other is often meaningless or fraudulent, as both already have interests in the property.
The Family Code also imposes rules on administration and disposition of community or conjugal property, typically requiring the consent of both spouses for acts of disposition (like sale). A sale involving common property that violates these rules can be void or voidable, independent of the prohibition on sales between spouses.

In practice, sales between spouses are frequently attacked as:

Void for being expressly prohibited by law, or
Simulated or fraudulent, to evade creditors or compulsory heirs.

4. Common issues

Sales between spouses in factually broken marriages: If spouses are merely separated in fact but not legally, the prohibition generally still applies.
Sales involving exclusive property: Even if property is exclusive to one spouse, the prohibition on sale between spouses may still apply, unless an exception (such as separation of property) is present.
Disguised sales: Transactions structured as “donations,” “daciones en pago,” or other contracts may be recharacterized as sales (or at least as transfers for value) to determine if the prohibition applies.

VI. Relative Incapacity of Guardians, Agents, and Executors/Administrators

The Civil Code identifies specific fiduciaries who cannot purchase certain property because of the conflict between their personal interest and their duty of loyalty.

1. Guardians and the property of the ward

A guardian cannot purchase the property of his or her ward, even at a public or judicial auction.

Reason: The guardian must act exclusively for the ward’s benefit. If allowed to buy the ward’s property, the guardian’s personal interest in obtaining the lowest price clashes with the duty to obtain the best possible terms for the ward.
This prohibition applies whether directly or through an intermediary.

This is a quintessential case of relative incapacity: the guardian is free to buy other property, just not the ward’s.

2. Agents and property entrusted to them (with a key nuance)

An agent is disqualified from purchasing the property whose administration or sale is entrusted to him, unless the principal expressly consents.

Reason: As with guardians, the agent’s duty is to obtain the best possible terms for the principal, and personal acquisition at a bargain would create a conflict of interest.
However, here the law expressly provides an exception: if the principal gives informed consent (preferably prior authority, but at least ratification with full knowledge), the sale may be valid.

This reveals an important nuance:

For guardians, the prohibition is stricter and does not expressly recognize a consent-based exception.
For agents, the relative incapacity can be cured by the principal’s consent, indicating a more flexible policy approach.

3. Executors and administrators and estate property

An executor or administrator managing an estate cannot purchase property of the estate under administration.

Reason: The executor or administrator has the duty to settle the estate fairly, pay debts, and distribute the net assets to heirs or legatees. Buying estate property, especially at a low price, undermines that duty and invites abuse.
As with guardians, this prohibition exists even if the sale is conducted at public auction.

Again, the incapacity is relative: the executor or administrator can buy other property, just not the property of the estate under their charge.

VII. Relative Incapacity of Public Officers, Lawyers, and Others Connected with the Administration of Justice

The Civil Code further provides that certain persons connected with the administration of justice or public office cannot acquire property or rights that are:

In litigation, or
Levied upon execution, within the jurisdiction where they perform their functions.

This group includes, among others:

Public officers and employees
Judges and other judicial officers
Prosecutors
Court staff
Lawyers and notaries public, in relation to litigation in which they are involved

1. Property and rights “in litigation”

The prohibition typically covers:

Property or rights that are the subject of an active case before the court where they exercise their functions.
Property levied upon execution by order of that court.

The rationale is to prevent:

Trafficking in litigation
Abuse of official position
Insider advantages, like knowledge of confidential details or influence over the outcome.

In the case of lawyers:

They cannot acquire by purchase or assignment the property or rights that are the object of litigation in which they take part by virtue of their profession, so long as litigation is pending.
This aims to prevent lawyers from turning the subject matter of the dispute into their private speculation or reward.

Once the litigation has finally terminated and the lawyer is no longer involved in any professional capacity, the prohibition is generally deemed to have ceased, and relative incapacity disappears.

2. Form of acquisition and intermediaries

The prohibition applies:

Whether directly or through another person (a “dummy” or intermediary).
To acquisition by assignment as well as by sale.

Courts will typically look beyond the form to the substance: if an acquisition is effectively by a disqualified person, the relative incapacity rules apply.

VIII. “Those Specially Disqualified by Law”

The Civil Code includes a catch-all category: “any others specially disqualified by law.”

This refers to other statutes and regulations (outside the Civil Code) that disqualify certain persons from acquiring specific property. Examples include:

Constitutional or statutory restrictions on foreign ownership of certain land or natural resources.
Special laws prohibiting public officials or employees of certain agencies from purchasing property that their office deals with or disposes of.
Statutes that limit acquisition of certain assets (like foreclosed properties or government assets) by insiders.

Depending on the specific law:

The incapacity may be relative (only in a defined context: e.g., an officer cannot buy property handled by their own agency), or
Approaching absolute (e.g., aliens and ownership of certain types of land).

The common thread is that these disqualifications flow from public policy, fiduciary duties, or conflict-of-interest rules.

IX. Legal Effects of Relative Incapacity in Sales

A key doctrinal question is: What is the effect on the contract of sale when a person who is relatively incapacitated enters into a prohibited sale?

In general:

Transactions violating express prohibitions (e.g., sales between spouses in prohibited cases; sales to guardians of ward’s property; sales to judges or lawyers of property in litigation) are usually treated as void or inexistent contracts, because:
- They are expressly prohibited by law, and
- The law contemplates that they are contrary to public policy and good customs.
Being void, such contracts:
- Produce no legal effects, except those related to restitution when possible.
- Cannot be ratified, because ratification presupposes a voidable, not void, contract.
- May be attacked directly or collaterally, and
- The action or defense of nullity does not prescribe.
In special cases like agents, where the law itself says the principal’s consent can validate the purchase:
- If the agent acquires the property without consent, the transaction is defective.
- But the law itself contemplates principal’s consent as a way to make it valid, suggesting that prior authority or subsequent ratification with full knowledge may cure the defect.
- There is a nuanced doctrinal discussion here: some view the unauthorized sale as voidable, others as initially inexistent until consent is given.

The classification is important because it determines:

Whether third persons in good faith can rely on the contract.
Whether prescription or ratification may cure defects.
Whether parties can be held liable for damages, even if the contract is void.

X. Interaction with Vices of Consent, Estoppel, and Third Parties

1. Distinction from vices of consent

Relative incapacity is different from vices of consent like mistake, violence, intimidation, undue influence, or fraud:

In vices of consent, the parties are legally capacitated, but something clouded the voluntariness or information basis of consent. The resulting contract is typically voidable.
In relative incapacity, the problem is structural and legal: the law itself prohibits the person from buying (or selling) in that specific context. Even if the parties fully understand and freely agree, the law blocks the contract for reasons of public policy or fiduciary protection.

2. Estoppel and relative incapacity

Because many of these disqualifications exist to protect public policy and third parties (e.g., wards, heirs, litigants, creditors), courts are generally reluctant to apply estoppel to validate prohibited transactions. For example:

A ward’s later conduct is seldom allowed to validate a guardian’s prohibited purchase of ward’s property.
A client’s silence cannot legitimate a lawyer’s purchase of litigated property in violation of the prohibition.

3. Third parties in good faith

When dealing with relative incapacity, a recurrent issue is: What if the property is later transferred to a third party in good faith?

If the original contract is void, then, under the principle nemo dat quod non habet (no one can give what they do not have), the buyer cannot pass valid title to another.
However, specific statutes (e.g., on land registration, negotiable instruments, or specific regulatory regimes) may introduce special rules protecting third parties.
In many cases, courts balance public policy against protecting the integrity of registered transactions.

XI. Administrative, Civil, and in Some Cases Criminal Consequences

Relative incapacity to consent in sales law does not only affect civil validity of contracts. It can also carry:

Administrative sanctions:
- Lawyers may face disciplinary action (suspension or disbarment) for purchasing property or rights subject of litigation they handle.
- Judges, court personnel, and public officials may be sanctioned under civil service or judicial codes of conduct.
Civil liability:
- Disqualified buyers may have to restore the property and pay damages if their acts caused loss to wards, estates, litigants, or creditors.
- Fiduciaries breaching their duty may be surcharged, removed, or otherwise held personally liable.
Criminal liability:
- In some scenarios, the same acts may constitute estafa, malversation, graft and corruption, or other offenses, depending on the specific law violated.

Thus, relative incapacity rules are part of a broader regime of ethical and legal controls on fiduciaries and public officers.

XII. Practical Implications and Study Pointers

For practical and academic purposes, understanding relative incapacity to consent in sales in the Philippine context means being able to:

Identify who is disqualified:
- Spouses (as to sales between each other, subject to exceptions)
- Guardians (as to ward’s property)
- Agents (as to property entrusted for administration or sale, absent principal’s consent)
- Executors and administrators (as to estate property)
- Public officers and those in the justice system (as to property under litigation or execution in their court or office)
- Persons otherwise disqualified by special laws
Specify the scope of the disqualification:
- What property?
- In what territorial or institutional jurisdiction?
- During what period (for instance, while litigation is pending or while the fiduciary relationship subsists)?
Determine the legal effect:
- Is the resulting sale void, voidable, or merely unenforceable?
- Can the defect be cured by consent or ratification (as with agents)?
- Is the action for nullity imprescriptible?
Connect with broader doctrines:
- Relationship with public policy and fiduciary duties
- Impact on third parties and registries (e.g., land registration)
- Parallel administrative and professional discipline rules

XIII. Conclusion

Relative incapacity to consent in sales law in the Philippines is a targeted set of legal disabilities designed not to undermine autonomy broadly, but to protect vulnerable interests, preserve public trust, and prevent conflicts of interest in sensitive relationships.

While parties may be fully competent in the ordinary sense — of age, sane, and informed — the law sometimes tells them: you may not buy this property, or buy from/sell to this person, under these circumstances. In that sense, relative incapacity is less about the parties’ personal capacities and more about structural safeguards for fairness and integrity in private and public transactions.

For students, judges, lawyers, and practitioners, mastering these rules is essential in evaluating the validity of sales, structuring transactions safely, and protecting clients from both legal nullity and ethical pitfalls.