Contract 4
Contract 4
Contract 4
CAUSE VS MOTIVE
The motives which impel one to a sale or
ART. 1351. The particular motives of the purchase are not always the cause of the
parties in entering into a contract are contract as that term is understood in law. With
different from the cause thereof. one’s motives, the law cannot deal in actions
between the parties; while with the
consideration, the law is always concerned.
Motive is the purely personal or private reason
which a party has in entering into a contract. It 2. If the motive of S in selling his property is
is different from the cause of the contract. to defraud C, a creditor, the latter may ask
for the rescission of the sale.
CAUSE MOTIVE
1. Immediate or Remote or indirect 3. W (wife) died. To preclude her heirs from
direct reason reason inheriting and to avoid payment of estate
2. Always known to Motive may be taxes, H (spouse) sold the conjugal
the other unknown property to B.
contracting party
3. Essential element Not essential The sale cannot prejudice the inheritance right
of a contract of the heirs to their share of the conjugal
4. Illegality of the Illegality of one’s property. Here, the illegal motive of H
cause affects the motive does not predetermined the purpose of the contract of
validity of a render the contract sale rendering it null and void.
contract void
4. Where a married man of mature years
In other words, cause is the essential reason donated a parcel of land to a girl of sixteen
which moves the contracting parties to subject to the condition that the latter shall
enter into it and justifies the creation of an cohabit with him, and such condition is
obligation through their will. While cause is accepted.
the essential reason for the contract, motive is
the particular reason of a contracting party It is clear that the donation is conditioned
which does not affect the other party. upon the attainment of the motive of the
donor; in other words, it predetermines the
WHEN MOTIVE REGARDED AS CAUSE purpose of the contract. Thus considered,
(Purpose is to defraud creditor) the conveyance is clearly predicated upon
an illegal causa. Consequently, it is void.
As a general principle, the motive or particular Therefore, under what is now Art. 1412 of
purpose of a party in entering into a contract the New Civil Code, there can be no
does not affect the validity nor existence of the recovery of what has already been
contract. delivered.
GENERAL RULE: is not a ground for relief (1) X promised to give to Y P1,000.00 as
and from failure of cause which does not payment for past services allegedly rendered
render a contract void. by Y which in truth and in fact have not been
rendered; or for a carabao which unknown to
Remedy: Demand the fulfillment or X is already dead.
cancellation of the obligation under an existing
contract. Here, the cause for X, the service remunerated
or the promise of Y to sell the carabao, is
erroneous as it is based upon facts believed to
be existing, but really inexistent.
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Ex. Contractof sale, wherein parties stipulate considering the value of the things at the time
lower price, for lower interest collection. But they were adjudicated.”
their real intention is true and lawful. It is a
“Art. 1470. Gross inadequacy of price does
valid contract.
not affect a contract of sale, except as it may
indicate a defect in the consent, or that the
parties really intended a donation or some
INADEQUACY OF CAUSE/LESION other act or contract.”
ART. 1355. Except in cases specified by “Art. 1539. x x x .’’ If the sale of real estate
law, lesion or inadequacy of cause shall not should be made with a statement of its area,
invalidate a contract, unless there has been at the rate of a certain price for a unit of
fraud, mistake or undue influence. measure or number, the vendor shall be
obliged to deliver to the vendee, if the latter
should demand it, all that may have been
Lesion is any damage caused by the fact stated in the contract; but should this be not
that the price is unjust or inadequate. It is the possible, the vendee may choose between a
injury suffered in consequence of inequality of proportional reduction of the price and the
situation, by one party who does not receive rescission of the contract, provided, that in the
the full equivalent for what he gives in a latter case, the lack in the area be not less than
commutative contract, like a sale. one-tenth of that stated.
GENERAL RULE — Lesion or inadequacy of The same shall be done, even when the area
cause (e.g., price of thing sold) does not of is the same, if any part of the immovable is not
itself invalidate a contract. of the quality specified in the contract.
The general rule is that a party to a contract The rescission, in this case, shall only take
will not be relieved from his obligation under it place at the will of the vendee, when the
by the mere fact that the contract may turn out inferior value of the thing sold exceeds one
to be financially disadvantageous to him. tenth of the price agreed upon.
REASON: All men are presumed to be sane Nevertheless, if the vendee would not have
and normal and subject to be moved by bought the immovable had he known of its
substantially the same motives. smaller area or inferior quality, he may rescind
the sale.’’
EXCEPTIONS — Lesion will invalidate a
contract — “Art. 1542. In the sale of real estate, made for
(a) When there has been fraud, mistake, or a lump sum and not at the rate of a certain sum
undue influence; and for a unit of measure or number, there shall be
no increase or decrease of the price, although
(b) In cases specified by law. (Art. 1381.) there be a greater or less or area or number
than that stated in the contract.
The rule in Article 1355 “is a general principle
of modern law. The same rule shall be applied when two or
more immovable are sold for a single price; but
Related provisions. — The following if, besides mentioning the boundaries, which is
provisions of law are pertinent: indispensable in every conveyance of real
estate, its area or number should be
“Art. 1098. A partition, judicial or extrajudicial,
designated in the contract, the vendor shall be
may also be rescinded on account of lesion,
bound to deliver all that is included within said
when any one of the co-heirs received
boundaries, even when it exceeds the area or
things whose value is less, by at least one-
number specified in the contract; and, should
fourth, than the share to which he is entitled,
he not be able to do so, he shall suffer a
CONTRACTS (CAUSE) FINALS ACJUCO 7
(2) When the law requires that the contract 1. FORMALITIES FOR VALIDITY
must be in a certain form in order to be
enforceable. There are certain contracts for which the law
prescribes certain forms for their validity.
REASONS FOR EXCEPTIONS:
These contracts maybe classified as follows:
According to the Code Commission, Article
1356 combines the “spiritual system” of the old (1) THOSE WHICH MUST APPEAR IN
Civil Code and the principles of the Anglo- WRITING;
American law as manifested in the Statute of (2) THOSE WHICH MUST APPEAR IN A
Frauds. The foundation is still the “spiritual PUBLIC DOCUMENT; AND
system” so that in general, the contracting (3) THOSE WHICH MUST BE
parties may, under Article 1357, compel REGISTERED.
each other to comply with the form
required by law. CONTRACTS W/C MUST APPEAR IN
The requirement that certain contracts be in WRITING are as follows:
certain forms to be valid or enforceable is (1) Donations of personal property whose
calculated to avoid litigation. Oral contracts value exceeds five thousand pesos.
frequently lead to fraud in the fulfillment of According to Art. 748 of the Code, the
obligations or to false testimony. So long as donation and the acceptance shall be
the possibility of dishonesty exists in made in writing; otherwise, it shall be void.
contractual relations, the “spiritual system”
cannot be adopted in an unqualified manner. (2) Sale of a piece of land or any interest
If the form required for validity or enforceability therein through an agent. According to
of a contract is not observed, the parties Art. 1874 of the Code, the authority of the
cannot avail of the right granted under Article latter shall be in writing; otherwise, the sale
1357. shall be void.
3. From the moment one of the contracting In certain cases, a certain form (e.g., public
parties invokes the provisions of Arts. 1357 instrument) is required for the convenience of
and 1358 by means of a proper action, the the parties in order that the contract may be
effect is to place the existence of the registered in the proper registry to make
contract in issue, which must be resolved effective, as against third persons, the right
by the ordinary rules of evidence. acquired under such contract. Non-
compliance with the required form would
4. Art. 1357 does not require that the action
not adversely affect the validity nor
to compel the execution of the necessary
enforceability of the contract between the
document must precede the action upon
parties themselves.
the contract. As a matter of fact, both
actions may be exercised simultaneously. Art. 1358. The following must appear in a
5. However, although the provisions of Art. public document:
1357, in connection with those of Art. 1358, (1) Acts and contracts which have for their
do not operate against the validity of the object the creation, transmission, modification
contract nor the validity of the acts or extinguishment of real rights over
voluntarily performed by the parties for the immovable property; sales of real property or
fulfillment thereof, yet from the moment of an interest therein are governed by Articles
when any of the contracting parties 1403, No. 2 and 1405;
invokes said provisions, it is evident
(2) The cession, repudiation or renunciation of
that under them the execution of the
hereditary rights or of those of the conjugal
required document must precede the
partnership of gains;
determination of the other obligations
derived from the contract. (3) The power to administer property, or any
other power which has for its object an act
EXAMPLE: appearing or which should appear in a public
If the contract of sale is in private writing, then document, or should prejudice a third person;
it is valid and binding, although it is still (4) The cession of actions or rights proceeding
executory, but only as between the parties and from an act appearing in a public document.
not as against third persons without notice until
the sale is registered in the Registry of All other contracts where the amount involved
Property. exceeds five hundred pesos must appear in
writing, even a private one. But sales of
If B is the buyer, he has a right to compel S to goods, chattels or things in action are
put the contract in a public instrument so that governed by Articles 1403, No. 2, and 1405.
it can be registered to affect third persons
notwithstanding the absence of express The contracts covered by this article are valid
agreement between them to that effect. For a and enforceable though not embodied in a
sale of real property or of an interest therein to public document or instrument or in writing.
be enforceable under the Statute of Frauds, it
is enough that it be in writing. It need not be The public document is required only for the
notarized. convenience and greater protection of the
parties and REGISTRATION IS NEEDED
Inasmuch as the contract is both valid and
ONLY TO MAKE THE CONTRACT
enforceable, the execution of a public
EFFECTIVE AS AGAINST THIRD
instrument becomes a mere matter of form PERSONS.
and convenience.
Formal requirements are, therefore, for the
FORM FOR THE CONVENIENCE OF THE
benefit of third parties for the purpose of
PARTIES
informing as well as binding them. Non-
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therefore, is annulment. Reformation cannot (b) The failure of the written agreement to
be the remedy because, either way, it would express the true intent and agreement of the
not make the instrument express the real parties thereto;
intention of both parties.
(c) The validity of the written agreement; or
NOTE: Both parties must have executed a
(d) The existence of other terms agreed to by
writing that does not reflect their actual
the parties or their successors in interest after
agreement. Reformation is thus not available
the execution of the written agreement.
where no writing exists, or a writing exists, but
the parties do not intend it to express their final
Art. 1360. The principles of the general
agreement, or no attempt is made to show any
law on the reformation of instruments are
vice of consent therein.
hereby adopted insofar as they are not in
ULTIMATE FACTS TO BE ALLEGED AND conflict with the provisions of this Code.
PROVED IN ACTION FOR REFORMATION. Art. 1361. When a mutual mistake of the
(1) In an action for the reformation of an parties causes the failure of the
instrument, the complaint must allege the instrument to disclose their real
true agreement or intention of the parties agreement, said instrument may be
and that the instrument to be reformed reformed.
does not express such agreement or Art. 1362. If one party was mistaken and
intention. In the absence of such the other acted fraudulently or inequitably
allegation, there is no cause of action in such a way that the instrument does
stated. not show their true intention, the former
(2) The onus probandi is upon the party who may ask for the reformation of the
insists that the contract should be instrument.
reformed because of its failure to express
Art. 1363. When one party was mistaken
the true intention of the parties because and the other knew or believed that the
the presumption is that an instrument instrument did not state their real
sets out the true agreement of the agreement, but concealed that fact from
parties. the former, the instrument may be
reformed.
ADMISSIBILITY OF PAROL EVIDENCE TO Art. 1364. When through the ignorance,
SHOW TRUE INTENT lack of skill, negligence or bad faith on the
part of the person drafting the instrument
As a general rule, the court may not allow the
or of the clerk or typist, the instrument
introduction of parol evidence to show the real
does not express the true intention of the
agreement of the parties. Whatever is not
parties, the courts may order that the
found in the text of the agreement should thus instrument be reformed.
be construed as excluded, waived, or
abandoned. Art. 1365. If two parties agree upon the
mortgage or pledge of real or personal
However, a party may present evidence to property, but the instrument states that
modify, explain or add to the terms of the the property is sold absolutely or with a
written agreement if he puts in issue in his right of repurchase, reformation of the
pleading: instrument is proper.
(a) An intrinsic ambiguity, mistake or
imperfection in the written agreement;
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Ignorance, etc. on the part of third (2) Wills. — A will is an act whereby a person
person, neither party is responsible for is permitted with the formalities prescribed
the mistake. Hence, either party may by law to control to a certain degree the
ask for reformation (Art 1364) disposition of his estate, to take effect after
his death.
In mortgage or pledge stated as a sale, Like a donation, the making of a will is a strictly
the reformation of the instrument is personal and free act which cannot be left to
proper, otherwise, the true intention of the discretion of a third person; hence, upon
the parties would be frustrated. Such the death of the testator, the right to
true intention must prevail for the reformation is lost. Furthermore, a will may be
contract must be complied with in good revoked by the testator any time before his
faith (Art 1365) death and this right is not subject to waiver or
restriction.
(3) Where the real agreement is void. — If
the real agreement is void, there is nothing
to reform. Reformation would be useless
because the real agreement being void, it
is unenforceable.
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