Articles 38 and 39 of the Civil Code of the Philippines

Article 38. Minority, insanity or imbecility, the state of being a deaf-mute, prodigality and civil interdiction are mere restrictions on capacity to act, and do not exempt the incapacitated person from certain obligations, as when the latter arise from his acts or from property relations, such as easements.

Such conditions merely restrict their capacity to act. They have juridical capacity and are susceptible of rights and even of obligations, when the same arise from their acts or from property relations. These persons are not exempted from their obligations. Their parents or guardians may still be liable.

Article 39. The following circumstances, among others, modify or limit capacity to act: age, insanity, imbecility, the state of being a deaf-mute, penalty, prodigality, family relations, alienage, absence, insolvency and trusteeship. The consequences of these circumstances are governed in this Code, other codes, the Rules of Court, and in special laws. Capacity to act is not limited on account of religious belief or political opinion. 

A married woman, twenty-one years of age or over, is qualified for all acts of civil life, except in cases specified by law.

           As with Article 39, the law enumerates certain circumstances that limit or modify capacity to act of some persons. These incapacitated persons may incur liability when these obligations arise from their acts or property relations.

Age.

            The last paragraph of Article 39 of the Civil Code has been repealed by R.A. No. 6809 which lowered the age of majority from twenty-one (21) years to eighteen (18) years.

            As a rule, a minor may not give consent to a contract. The contract can, however, be cleansed of its defect if their parents or guardian would ratify the same. This is in accordance with Article 1407 of the New Civil Code.

            Article 1390 (NCC) states that if one of the of the parties to a contract is incapable of giving consent, the contract is voidable. But Article 1396 (NCC) provides that if the parents or guardian of said incompetent ratify the same, it is cleansed of its defect from the moment of signing or perfection of the contract of the minor.

Illustration:

Scenario 1	Scenario 2
A and B are both minors. A sold his car to B for Php. 400,000.00. A delivered it and B paid. The contract is unenforceable, but if the parents or guardians of A and B would ratify it, then it is cleansed of its defect from the moment of perfection of the contract; not from the ratification.	A minor sold his car to B, a person of age. B paid A and A delivered the car to B. This contract is voidable, but it can be ratified by the parents or guardians of A.
In both cases, there is restriction of capacity to act, yet the law recognizes effects of the said contracts.

Sickness.

            An insane or demented person or a deaf-mute who does not know how to read and write may not give consent to a contract (Article 1372, New Civil Code).

----please refer to the case digest---

            Capacity to act must be supposed to attach to a person who has not been previously declared incapable, and such capacity is presumed to continue so long as the contrary be not proved, that is, at the moment of his acting he was incapable, crazy, insane, or out of his mind.

Penalty.

            Civil interdiction deprives the offender during the time of his sentence of the rights of parental authority and guardianship, either as to person or property of any ward, of marital authority, of the right to manage his property and the right to dispose of such property by any act or conveyance inter vivos (Article 34, Revised Penal Code).

            A person under civil interdiction cannot therefore make a donation inter vivos, but he can make a will as the latter shall take effect after death.

            A person under civil interdiction is subject to guardianship (Rule 39, Sec. 2, Rules of Court); he may be disinherited if he is a child or descendant, legitimate or illegitimate (Art. 919 [8], NCC).

            Civil interdiction may also be a ground for separation of properties during the marriage (Art. 135, Family Code); it may cause the termination of agency (Art. 1919, Civil Code).

Alienage.

            Aliens cannot acquire land in the Philippines. Save in cases of hereditary succession, no private land shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain (Sec. 7, Art. XII, 1987 Constitution)

            Aliens cannot practice their profession in the Philippines. The 1987 Constitution says that practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases prescribed by law (Sec. 14, Art XII).

            Aliens cannot also operate public utilities (Sec. 11, Art. XII).

Absence.

            When a person disappears from his domicile, his whereabouts being unknown, he is considered as absent (Art. 381, Civil Code). The court can appoint an administrator at the instance of an interested person, a relative or a friend.

            A person’s continued absence can even result in the presumption of his death (Art. 390, NCC); hence, his successional rights may be opened.  It must be recalled that the presumption of death is not conclusive, for he may be alive and can still dispose of his properties. In fact, if someone can prove that he acquired title over his properties under administration, the administration would cease (Art. 389, Civil Code). 

Insolvency and Trusteeship.

            If one has been declared insolvent, he cannot just dispose of his properties existing at the time of the commencement of the proceedings for insolvency. No payments of property or credit can be made to him (Secs. 18 & 24, Act No. 1956)

Family Relations.

            Article 87 of the Family code states that a husband and wife cannot donate to one another. This prohibition also extends to common-law relationship. The reason is public policy; the possibility that one may exert undue influence over the other.

            Husband and wife cannot also sell to one another, except in cases where they are governed by the complete separation of property regime or when there is separation of properties during the marriage (Art. 1490, NCC). They cannot enter into a universal partnership of all properties (Art. 1782, NCC).

            Under Article 37 and 38 of the Family Code, Marriages among relatives in the direct line, whether legitimate or illegitimate, or those in the collateral line up to the fourth civil degree of consanguinity will be void by reason of public policy.

Deaf-Mute.

            A person who is blind or deaf or dumb cannot be a witness in a will (Art. 820, NCC).

            A deaf-mute may execute a will (Art. 807) or a blind person can execute a will (Art. 808).

Political or religious belief.

            These do not affect the capacity to act. Under the 1987 Constitution, no religious test shall be required for the exercise of civil or political rights (Sec. 5, Art. III)

Case Digest of Standard Oil Co. v. Codina Arenas, 19 Phil. 363

G.R. No. L-5921            July 25, 1911

THE STANDARD OIL COMPANY OF NEW YORK, plaintiff-appellee, 

vs.

JUAN CODINA ARENAS AND OTHERS, defendants;

VICENTE SIXTO VILLANUEVA, appellant.

PONENTE: C. J. Arellano

FACTS:

• On December 15, 1908, Juan Codina Arenas and Francisco Lara del Pino (as principals) w/ Alipio Locso, Vicente Sixto Villanueva and (the Chinaman) Siy Ho (as sureties) assumed obligation to pay – jointly and severally – to the plaintiff-appellee the sum of Php 3,305.76, three months from this date, with an interest at Php 1 per month.

• Standard Oil sued the five debtors for payment of sum on April 5, 1909, together w/ the interest thereon at rate of 1 per cent per month from date of assumed obligation (December 15, 1908) and the costs; Defendants were summoned, w/ record that showed summons was served on Vicente Sixto Villanueva on April 17.

• On August 28, Court of 1st Instance of the city of Manila sentenced all defendants to pay jointly and severally to the plaintiff company the aforementioned sum, w/ interest thereon at 1 per cent a month from December 15, 1908 until complete payment of principal plus costs.

• While judgment was in course of execution, Elisa Torres de Villanueva, Vicente’s wife appeared and alleged the ff:

        a. That on July 24, 1909, her husband, Vicente, was declared to be insane by CFI city of Manila;

        b. She was appointed his guardian by same court;

       c. In October 11, she was authorized by the court as his guardian to institute the proper legal proceedings in the present cause;

       d. She as guardian was not aware of the proceedings had against Vicente and was only by chance informed of it, and;

       e.  When Vicente gave the bond, he was already permanently insane and was in such state when summoned and still continued to do so.

ISSUE:

       Whether or not suffering from monomania of great wealth warrants the conclusion that Villanueva does not have capacity to act.

HELD:

       No. Villanueva does have the capacity to act. None of the evidence presented suggests that a person suffering from a monomania of wealth is really insane and incapable of binding himself in a contract. The bond executed by Villanueva on December 15, 1908, and his incapacity, for the purpose of providing a guardian for him, was not declared until July 24, 1909. He had freely and knowingly executed the bond in question. Therefore, the judgment appealed from is affirmed with costs.

References:

• Albano, E. (2017).Family Code of the Philippines, pp. 38-39. Quezon City, Philippines: Central Books Supply, Inc.

• Arellano Law Fovndation. (2019). The LAWPHiL Project. Philippine Jurisprudence. Retrived August 31,2019, from<https://www.lawphil.net/judjuris/juri1911/jul1911/gr_l-5921_1911.html>