CIVIL LAW REVIEW II LAW ON SALES

Atty. Crisostomo Uribe - Course Outline (Dec. !!"#

Donnell R. A$%ton & Recoletos 'e (%nil% - Colle$e o) L%*

Art. 1458 (CC) By the contract of sale, one of the contracting parties obligates himself to transfer ownership of and to deli er a determinate thing, and the other to pay therefor a price in money or its e!"i alent. #hen one of the parties deli ers a thing and the other pays a price it constit"te a contract of sale$ Not necess%rily. Not %ll 'eli+ery o) % t,in$ %n' t,e concomit%nt -%yment o) % -rice constitute % contr%ct o) s%le. It coul' be % contr%ct o) le%se. W,%t is necess%ry is t,e intent o) t,e -%rties to tr%ns)er o*ners,i- o+er t,e sub.ect m%tter o) t,e contr%ct o) s%le. Note/ S%le is % contr%ct %n' t,ere)ore0 t,e -ro+ision on obli$%tions %n' contr%ct un'er t,e ci+il co'e m%y $ener%lly %--ly. #hat are the characteristics of a contract of sale$ 1. Consensu%l . 1er)ecte' by meetin$ o) t,e min's %s to t,e -rice %n' t,e ob.ect. e2ce-t/ in c%ttle re$istr%tion 'ecree to be % -er)ecte' contr%ct it re3uires to be in % -ublic instrument0 re$istere' %n' % certi)ic%te o) title be issue'. 4. It is % -rinci-%l contr%ct suc, t,%t it c%n st%n' on its o*n )or its -er)ection %n' +%li'ity. 5. It is onerous *,ere bot, -%rties %re obli$e' to $i+e somet,in$. 6. Commut%ti+e bec%use t,ere is e3ui+%lence o) +%lue to be -er)orme' by bot, -%rties. e2ce-t/ %le%tory contr%cts or s%le o) ,o-e. 7,e obli$%tion o) % -%rty *ill only %rise u-on t,e ,%--enin$ o) % cert%in e+ent or con'itions. 7,e -er)orm%nce o) one o) t,e -%rties or bot, is contin$ent on t,e occurrence o) % -%rticul%r e+ent. e.$. s%le o) lotto tic8et contin$ent u-on t,e numbers *oul' %--e%r in t,e 'r%*. is

Insur%nce contr%cts. 9. Nomin%te contr%ct - ,%s % -%rticul%r n%me to 'istin$uis, it )rom ot,ers. As to n%ture/ 1. mo+%ble or immo+%ble - 7,is is im-ort%nt bec%use one must 'etermine t,e ob.ect o) t,e s%le. St%tute o) :r%u's/ %. mo+%ble b. immo+%ble (%ce'% L%* Recto L%* . A t,in$ or % ri$,t - im-ort%nt %s to t,e mo'e o) 'eli+ery. 4. V% l i ' 0 Vo i ' % b l e 0 Vo i ' 0 u n e n ) o r ce%ble Rescissible etc. #hat are the distinctions between absol"te sale and conditional sale$

Absol"te %ale 7,e seller 'oes not reser+e ,is title o+er t,e t,in$ sol'0 o*ners,i- -%sses u-on 'eli+ery *,et,er t,e buyer ,%s %ctu%lly -%i' % sin$le cent%+o or not.

Conditional %ale Con'itions %re im-ose' by t,e seller in or'er t,%t o*ners,i- *ill -%ss.

O*ners,i%utom%tic%lly -%sses )rom t,e moment t,e con'ition ,%--ene'.

Contract to sell

A recei-t *%s issue' by A to ; )or t,e sum o) <68 %s -%rti%l -%yment )or % c%r0 t,e b%l%nce to be -%i' %t t,e en' o) t,e mont,. Is t,is % contr%ct o) s%le= 7,is is % contr%ct o) s%le. 7,is is not % contr%ct to sell bec%use in % contr%ct to sell o*ners,i- is reser+e' by t,e seller0 suc, t,%t 'es-ite 'eli+ery to t,e buyer0 t,e buyer 'i' not %c3uire o*ners,i- o+er t,e t,in$ u-on 'eli+ery. In % contr%ct to sell0 u-on t,e ,%--enin$ o) t,e con'ition or con'itions im-ose' by t,e seller0 o*ners,i- 'oes not %utom%tic%lly -%ss to t,e buyer. 7,ou$, % contr%ct to sell is % s-eci%l )orm o) % con'ition%l s%le0 it is % -eculi%r 8in' o) s%le bec%use 'es-ite t,e ,%--enin$ o) %ll t,e con'itions0 %n' 'es-ite %ctu%l 'eli+ery to t,e buyer0 t,e buyer 'oes not %utom%tic%lly %c3uire o*ners,i-. U-on t,e ,%--enin$ o) t,e con'ition in % contr%ct to sell0 t,e buyer is only $i+en t,e ri$,t to com-el t,e seller to e2ecute % )in%l 'ee' o) s%le. &ation in payment Art. 1 56 D%tion in -%yment0 *,ereby -ro-erty is %lien%te' to t,e cre'itor in s%tis)%ction o) % 'ebt in money0 s,%ll be $o+erne' by t,e l%* on s%les. :or '%tion in -%yment to be $o+erne' by t,e l%* on s%les it is re3uire' t,%t one o) t,e -re e2istin$ obli$%tion must be in money0 i) t,e ot,er consi'er%tion is not in money co+ere' by '%tion in -%yment0 it *ill not be $o+erne' by t,e l%* on s%les0 suc, *ill be $o+erne' by t,e l%* on no+%tion. 1r%ctic%lly t,ere is % c,%n$e in t,e ob.ect o) t,e contr%ct. E2%m-le/ I) A o*es ; 1!!8 %n' A *oul' o))er % c%r to V0 %n' i) ; %cce-ts0 suc, *oul' be '%tion in -%yment. 7,is *oul' be $o+erne' by t,e l%* on s%les bec%use t,e -re e2sitin$ obli$%tion is in money. >o*e+er0 i) A is obli$e' to 'eli+er % ,orse but inste%' 'eli+ere' % c%r %n' ; %cce-ts0 t,is *oul' be '%tion in -%yment but not un'er Art.

1 56 but by no+%tion by c,%n$in$ t,e ob.ect o) t,e obli$%tion. As to n%ture0 '%tion in -%yment is % s-eci%l )orm o) -%yment0 *,ile s%les is % contr%ct. In '%tion in -%yment t,ere must be % -re e2istin$ obli$%tion. Since t,is is % s-eci%l )orm o) -%yment0 t,ere ,%s to be %n obli$%tion. 7,ere is no -re e2itin$ obli$%tion in % contr%ct o) s%le. 'assach"setts ("le It is % rule *,ere % contr%ct *%s entere' into )or % contr%ct )or % -iece o) *or8. :or e2%m-le0 % -erson *,o entere' % store to buy s,oes0 but since t,ere is no si?e t,%t *oul' )it suc, -erson0 t,e store o))ere' to m%8e % -%ir o) s,oes s-eci%lly m%'e )or ,im. In % contr%ct o) s%le0 t,e s,oes or'in%rily sol' %re )or t,e $ener%l m%r8et0 *,ile t,e s,oes s-eci%lly m%'e0 is % contr%ct )or -iece o) *or8. A obliged himself to deli er to B a car wor) *5+). B on the other hand, obliged himself to deli er to B a watch pl"s cash in the amo"nt of 15+). #hat is the nat"re of the transaction between A and B$ De-en'in$ on t,e intention o) t,e -%rties0 A %n' ; m%y consi'er %s one o) s%le or b%rter. I) t,e intention o) t,e -%rties %re not cle%r b%se on t,e %$reement0 t,e n%ture o) t,e contr%ct *oul' 'e-en' on t,e +%lue o) t,e *%tc,. I) t,e +%lue o) t,e *%tc, is $re%ter t,%n 16!80 it *ill be b%rter0 but i) t,e +%lue o) t,e *%tc, is e3u%l or less t,%n 16!80 t,en it *oul' be s%le. 7,e +%lue ) t,e c%r is irrele+%nt. A ga e B the e,cl"si e right to sell his denim -eans, promising B *+. disco"nt on sales. /owe er, it was stip"lated in their agreement that B shall pay the price of this -eans 0+ days from deli ery. After the -eans was deli er to B and before B co"ld sell the -eans, the store was b"rned witho"t the fa"lt of anyone. 1h"s, can B still be compelled to pay the price of this -eans$ Un'er Art. 15990 in construin$ % contr%ct cont%inin$ -ro+isions c,%r%cteristic o) bot, t,e
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contr%ct o) s%le %n' o) t,e contr%ct o) %$ency to sell0 t,e essenti%l cl%uses o) t,e *,ole instrument s,%ll be consi'ere'. I) %ssumin$ t,is is % contr%ct o) %$ency t,e o*ners,i- 'oes not -%ss to ;0 t,e o*ner-seller s,%ll be%r t,e loss %n' notin$ t,%t ; is not ne$li$ent un'er t,e )%cts. I) ,o*e+er it is % contr%ct o) s%le0 t,en o*ners,i- -%sses to ;0 %n' since ,e is t,e o*ner0 ,e be%rs t,e loss. Since bot, %re c,%r%cteristic o) % contr%ct o) s%le %n' %$ency0 t,e -ro+isions o) Art. 1599 ,o*e+er s,%ll be %--lie'. >ere0 t,e essenti%l cl%uses o) t,e *,ole instrument must be in3uire' into. One o) t,e cl%uses or con'ition %$ree' u-on by t,e -%rties is t,%t @; ,%' to -%y t,e -rice *it,in 9! '%ys.A As suc,0 t,%t *oul' m%8e t,e contr%ct %s one o) s%le %n' not o) %$ency. 7,is is bec%use 9! '%ys )rom 'eli+ery0 *,et,er or not ; ,%s sol' t,ose .e%ns to ot,er -ersons0 ,e is %lre%'y obli$e' to -%y t,e -rice. ;ein$ % contr%ct o) s%le t,ere)or %n' t,ere ,%+in$ % 'eli+ery0 o*ners,i- -%sses to t,e buyer. >ence0 t,e buyer be%rs t,e loss. 7,ere)ore ,e c%nnot be com-elle' to -%y t,e -rice o) t,e .e%ns. 2ssential elements of a contract of sale$ 1. Consent o) t,e contr%ctin$ -%rties .Ob.ect or sub.ect m%tter *,i c , i s % 'etermin%te t,in$ or 'etermin%te sub.ect m%tter (m%y eit,er be % t,in$ or ri$,t#. Ser+ice c%nnot be % sub.ect m%tter o) % contr%ct o) s%le. 4. C%use or consi'er%tion As to t,e seller/ t,e -rice in money or its e3ui+%lent. #hat is the effect of a contract of sale when there is no consent gi en by one or both of the parties$ I) consent is not $i+en by one or bot, o) t,e -%rties0 t,e contr%ct is +oi' bec%use one o) t,e essenti%l elements is l%c8in$. Un'er t,e l%*0 it is consi'ere' %s % )ictitious contr%ct. A )ictitious contr%ct *oul' norm%lly be t,%t @t,e si$n%ture o)

t,e -%rties in t,e s%le *%s )or$e'. I) t,e si$n%ture o) t,e seller *%s )or$e'0 t,%t *oul' be % )ictitious contr%ct. 7,e %lle$e' seller *ill not ,%+e -%rtici-%tion in t,e e2ecution o) t,e contr%ct. %im"lated Contract >Ere t,e -%rties %ctu%lly ,%+e -%rtici-%tion. 7,ey (t,e -%rties# +olunt%rily si$n t,e 'ee' o) s%le0 ,o*e+er t,ey 'o not inten' to be boun' by t,e terms o) t,e contr%ct0 or t,ey m%y inten' to be boun' but not un'er % contr%ct o) s%le but on some ot,er contr%ct. Bin's o) simul%te' contr%cts 1. Absolutely simul%te' Contr%cts - >ere0 t,e -%rties 'o not *%nt to be boun' by t,e contr%ct0 t,e common re%son is to 'e)r%u' cre'itors. :or e2%m-le0 t,e 'ebtor *ol' sell ,is rem%inin$ -ro-erties in % simul%te' contr%ct to m%8e it %--e%r t,%t ,e ,%s no -ro-erty0 t,%t m%y be re%c,e' by ,is cre'itors. . Rel%ti+ely simul%te' contr%cts - >ere it m%y %--e%r to be in % +%li' 'ee' o) s%le but t,ey %ctu%lly inten' to enter into %not,er contr%ct suc, t,%t it is %ctu%lly % 'on%tion or to circum+ent t,e -ro+isions o) t,e le$itime. 3f consent is gi en, wo"ld it mean that the contract is alid$ Not necess%rily0 bec%use *,en consent is $i+en by %n inc%-%cit%te' -erson0 suc, is +oi' or +oi'%ble %s t,e c%se m%y be. 7,is is bec%use t,ere %re s-eci)ic rules )ollo*e' 'e-en'in$ on t,e b%sis o) inc%-%city. #hat are the )inds of incapacity 1. Absolute inc%-%city - A -%rty c%nnot +%li'ly $i+e consent to %ny contr%ct. . Rel%ti+e inc%-%city - 7,e -%rty is -ro,ibite' in enterin$ into s-eci)ic contr%cts or s-eci)ic -ersons or t,in$s.

%. S%le bet*een s-ouses - 7,e SC *oul' consistently consi'er t,is contr%ct %s +oi'0 e2ce-t/ %1. *,en t,e s-ouses in t,eir m%rri%$e settlement0 %n' %$ree' t,ey constitute com-lete se-%r%tion o) -ro-erty. 7,ey c%n enter into % contr%ct o) s%le *it, e%c, ot,er. % . E+en i) t,ey 'i' not e2ecute % m%rri%$e settlement0 i) 'urin$ t,eir m%rri%$e obt%ine' % .u'ici%l 'ecl%r%tion o) com-lete se-%r%tion o) -ro-erty. %. s%le by -ersons mentione' un'er Art. 15"10 n%mely/ b1. 7,e $u%r'i%n0 t,e -ro-erty o) t,e -erson or -ersons *,o m%y be un'er ,is $u%r'i%ns,i-C b . A$ents0 t,e -ro-erty * ,ose%'ministr%tion or s%le m%y , % + e b e e n entruste' to t,em0 unless t,e consent o) t,e -rinci-%l ,%s been $i+enC b40 E2ecutors %n' %'ministr%tors0 t,e -ro-erty o) t,e est%te un' er %'ministr%tionC b5. 1ublic o))icers %n' em-loyees0 t,e -ro-erty o) t,e St%te or o) %nysub'i+ision t,ereo)0 or o ) % n y $o+ernment-o*ne' or controlle' cor-or%tion0 or institution0 t,e %'ministr%tion o) *,ic, ,%s been intruste' to t,emC t,is -ro+ision s,%ll %--ly to .u'$es %n' $o+ernment e2-erts *,o0 in %ny m%nner *,%tsoe+er0 t%8e -%rt in t,e s%leC b6. Dustices0 .u'$es0 -ros e c u t i n $ %ttorneys0 cler8s o) su-erior %n' in)erior courts0 %n' ot,er o))icers %n' em-loyees connecte' *it, t,e %'ministr%tion o) .ustice0 t,e -ro-erty %n' ri$,ts in liti$%tion or le+ie' u-on %n e2ecution be)ore t,e court *it,in *,ose .uris'iction or territory t,ey e2ercise t,eir res-ecti+e )unctionsC t,is -ro,ibition

inclu'es t,e %ct o) %c3uirin$ by %ssi$nment %n' s,%ll %--ly to l%*yers0 *it, res-ect to t,e -ro-erty %n' ri$,ts *,ic, m%y be t,e

ob.ect o) %ny liti$%tion in *,ic, t,ey m%y t%8e -%rt by +irtue o) t,eir -ro)ession. b9. Any ot,ers s-eci%lly 'is3u%li)ie' by l%*. c. Aliens %re -ro,ibite' )rom %c3uirin$ -ri+%te l%n's by -urc,%se0 e2ce-t/ c1. )ormer n%tur%l born citi?ens Note/ E+en i) consent is $i+en by one c%-%cit%te' but suc, consent is +iti%te' consent0 t,e contr%ct is merely +oi'%ble eit,er by )r%u'0 mist%8e0 intimi'%tion0 un'ue in)luence %n' +iolence. I) t,e -%rty $i+in$ consent is in t,e n%me o) %not,er -erson0 but *it,out t,e %ut,ority o) suc, -erson or %ut,ority o) t,e l%*0 suc, contr%ct s,%ll be unen)orce%ble. 1wo )inds of capacity 1. Duri'ic%l c%-%city It is t,e )itness to be t,e sub.ect o) le$%l rel%tions. I) t,e -%rty ,%s no .uri'ic%l c%-%city0 t,e contr%ct is 'e)initely +oi'. All li+in$ n%tur%l -ersons ,%+e .uri'ic%l c%-%city. An %lle$e' cor-or%tion *,ic, ,%s not been re$istere' *it, t,e SEC ,%s no .uri'ic%l c%-%city. . C%-%city to %ct It is t,e -o*er to 'o %cts *it, le$%l e))ects. Wit,out c%-%city to %ct0 norm%lly t,e contr%ct s,%ll be +oi'%ble. 1%rticul%r restriction *it, res-ect to c%-%city to %ct is minority or ins%nity0 'e%) mutes *,o 'oes not 8no* ,o* to re%' %n' *rite or -ersons su))erin$ )rom
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ci+il inter'iction. > o * e + e r0 i ) s u c , m i n o r % c t u % l l y misre-resente' %s to ,is %$e0 ,e *ill be boun' to suc, contr%ct0 un'er t,e -rinci-le o) esto--el. Note t,%t *,en s%le o) items *,ic, %re necess%ry *oul' bin' t,%t minor0 but not %s to t,e %ctu%l contr%ct -rice but only t,e re%son%ble -rice o) t,ose items. 4b-ect of %"b-ect matter of a contract of sale (determinate thing or right) 1. 7,in$ - Re3uisites o) s%les %s to t,in$s/ %. 7,e t,in$ must be *it,in t,e commerce o) men0 suc, %s s%le o) n%+i$%ble ri+ers0 s%le o) c%'%+ers0 s%le o) intern%l or$%ns. . (ust be licit (not -ro,ibite' by l%*# 4. 7,ey must be 'etermin%te S%le o) % c%r %n' s%le o) % mitsubis,i l%ncer $l2 )orest bl%c8 !!< mo'el. A t,in$ is consi'ere' 'etermin%te only *,en it is -%rticul%rly 'esi$n%te' or -,ysic%lly se$re$%te' )rom %ll ot,ers o) t,e s%me cl%ss. S%le o) % c%r s,%ll be +oi'0 but t,e s%le o) % mitsubis,i l%ncer $l2 )orest bl%c8 !!< mo'el is % +%li' s%le bec%use un'er Art. 159! ( # o) t,e ne* ci+il co'e -ro+i'es t,%t t,e re3uisite t,%t % t,in$ be 'etermin%te is s%tis)ie' i) %t t,e time t,e contr%ct is entere' into0 t,e t,in$ is c%-%ble o) bein$ m%'e 'etermin%te *it,out t,e necessity o) % ne* or )urt,er %$reement bet*een t,e -%rties. 3f A and B agreed that A wo"ld sell and transfer ownership o er a palay that wo"ld be har ested in a specific rice field and in a specific season. /owe er, "pon the arri al of the period nothing has been har ested. #hat is the stat"s of the sale$ %ince nothing has been har ested, wo"ld the contract be

considered oid$ 'ay the seller be held liable for damages$ 7,in$s ,%+in$ t,e -otenti%l e2istence m%y be t,e ob.ect o) % +%li' s%le. As lon$ %s t,e t,e 4 essenti%l re3uisites o) % contr%ct o) s%le is -resent0 t,en t,ere is % +%li' contr%ct o) s%le. 7,e seller m%y not be li%ble )or '%m%$es bec%use t,ere %re e2cuses )or non -er)orm%nce o) obli$%tion bec%use it *%s 'ue to )ortuitous e+ent0 %s suc, it is e2cuse'. I) ,o*e+er0 t,e )%ilure to -ro'uce -%l%y is t,rou$, ne$li$ence0 ,e is li%ble. %ale of a lotto tic)et is it a alid sale$ I) be)ore t,e 'r%* suc, is % +%li' s%le o) t,e tic8et *,et,er t,e *innin$ numbers %--e%re' or not. I) %)ter t,e 'r%*0 *oul' 'e-en' on *,et,er it is % *innin$ or % losin$ tic8et. S%le o) % +%in ,o-e is % +oi' s%le %s in t,e l%tter c%se. 3n an agreement between A and B where A sold a parcel of land to B, with a right to rep"rchase within 1 year. 4n the third month,, B sold the same parcel of land to C. 4n the 11th month, A offered to rep"rchase the land. #ho had the better right between A and C$ or, will the sale between B and C be a alid sale noting that the sale is with a right to rep"rchase$ S%le is % consensu%l contr%ct. As lon$ %s t,ere is % meetin$ o) t,e min's %s to t,e ob.ect %n' %s to t,e -rice0 t,en t,ere is % +%li' %n' -er)ecte' s%le. 7,is is % +%li' s%le e+en i) t,e ob.ect o) t,e s%le is *it, % ri$,t to re-urc,%se. :urt,er0 un'er Art. 1596 7,in$s sub.ect to % resolutory con'ition m%y be t,e ob.ect o) t,e contr%ct o) s%le. Note/ It is t,e o*ners,i- o) % t,in$ *,ic, c%n be t,e sub.ect o) % resolutory con'ition %n' not t,e t,in$. Since0 A ,%' t,e ri$,t to re-urc,%se0 A ,%' t,e better ri$,t. >o*e+er0 *,en C is % innocent -urc,%ser )or +%lue %s *,en t,ere is no %nnot%tion %t t,e b%c8 o) t,e title o) t,e -%rcel o) l%n' t,%t it is sub.ect to % ri$,t to re-urc,%se0 %n' in suc, c%se C *ill ,%+e % better ri$,t.
<

%ale of a right is otherwise )nown as$ Assi$nment o) % ri$,t. 3s assignment of a right a sale$ Not necess%rily. I) t,e %sssi$nment is *it, % +%lu%ble consi'er%tion0 it is % s%le0 i) $r%tuitous or by '%tion in -%yment it is not % s%le %s it is not )or consi'er%tion. E2%m-les %re s%le o) % cre'it or s%le o) s,%res o) stoc8 %re consi'ere' consi'ere' %s ri$,ts. :urt,ermore0 t,e ri$,t must no t b e instr%nsmissible. :or % ri$,t to be t,e ob.ect o) % contr%ct o) s%le0 t,e s%me must not be instr%nsmissible. Un'er t,e l%* t,e only t,ree $ener%l re%sons *,y % ri$,t m%y not be tr%nsmissble %re 1# by n%ture0 #by sti-ul%tion0 4#l%*. Ri$,ts *,ic, %re -urely -erson%l c%nnot be % sub.ect o) s%le by n%ture %re intr%nsmissible0 ri$,ts *,ere -erson%l 3u%li)ic%tions o) % -erson %re consi'ere'. Wit, res-ect to sti-ul%tions0 t,ey m%y be tr%nsmissible by n%ture but by sti-ul%tion t,ey m%y be consi' e r e ' instr%nsmissible. Suble%se o) % -ro-erty m%y be tr%nsmistte' to %not,er but by sti-ul%tion0 it c%nnot be 'one %n' ,ence instr%nsmissible. In -%rtners,i-0 t,e ri$,ts in % s-eci)ic -ro-erty0 *,ere t,e l%* re3uires t,%t %ssi$nment c%nnot be 'one *it,out t,e consent o) %ll t,e -%rtners0 t,e %ssi$nment o) one c%nnot be 'one *it,out t,e consent o) %ll t,e -%rtners. 3s the sale of rights perfected by mere consent$ Fes. ;y mere meetin$ o) t,e min's0 %n' *it,out t,e e2ecution o) % s-eci)ic instrument0 t,e s%le s,%ll be +%li'. >o*e+er0 to bin' t,ir' -ersons suc, s%le must be recor'e' in t,e re$istry o) -ro-erty. 3n a deed of sale, where the price stated in the deed was 1++ lapad (1+,+++ yen) 5 1 million yen, as s"ch the sale not being in 6hilippine peso, a alid sale$ Can the seller compel the b"yer to pay in that c"rrency$

7,%t *oul' be % +%li' s%le e+en i) t,e currency is not 1,ili--ine currency0 %s t,e l%* re3uires only t,%t it be in money or it m%y e+en be its e3ui+%lent li8e -romissory notes0 or letters o) cre'it. I) t,e contr%ct *oul' be entere' into %)ter RA 6 " *%s re-e%le' by RA E1E4 in 1""90 t,en t,e seller c%n be com-elle' to -%y in % currency ot,er t,%n 1,ili--ine -eso. Ot,er*ise t,e seller c%nnot com-el t,e buyer to -% in .%-%nese currency. Can there be a peso coins$ alid payment in 1+,+++ 1

Fes0 but t,e seller c%nnot be com-elle' to %cce-t bec%use un'er 1,ili--ine l%* 1 -eso coins only ,%+e le$%l ten'er -o*er u- to 6! -esos. %ale of shares of stoc)s al"ed at 5+++ b"t there was no date as to the al"e of the shares 7,e -rice must be cert%in %s one o) t,e re3uirement in or'er t,%t t,e s%le s,%ll be +%li'. 7,e '%te is +ery m%teri%l bec%use t,e +%lue o) t,e s,%res c,%n$es 'e-en'in$ on t,e '%te. E+en i) t,e '%te ,%s been )i2e' but t,e time ,%s not been consi'ere' suc, %s t,e o-enin$ %n' closin$ *it, res-ect to suc, e2c,%n$e *oul' %))ect t,e +%li'ity o) t,e s%le. ;ec%use i) t,e +%lue u-on t,e o-enin$ is 6! -esos but in t,e closin$ it is only 4" -esos0 t,en suc, is not cert%in *,en t,e time is not consi'ere'. #ho can fi, the price of the sale$ It is best t,%t t,e -%rties s,%ll %$ree %s to t,e -rice o) t,e s%le0 but t,e -%rties m%y %$ree %s to *,o m%y )i2 t,e -rice. 'ay the sale be perfected if one of the parties is designated to fi, the price$ It is +%li' -ro+i'e' t,e -erson 'esi$n%te' to )i2 t,e -rice0 t,e -rice )i2e' must be %cce-te' by t,e ot,er -%rty. As to t,e -rice0 i) one o) t,e -%rties 'esi$n%te' )i2e' it %t 1 million but t,e ot,er -%rty 'i' not %cce-t0 t,ere is no -er)ecte'
E

contr%ct o) s%le0 bec%use t,e l%tter 'i' not %cce-t0 t,ere bein$ no meetin$ o) t,e min's. 'ay a third person be tas)ed by the original parties to fi,ed the price$ It is +oi' *,en t,e t,ir' -erson 'oes not *%nt to )i2 t,e -rice or un%ble to )i2 t,e -rice. I) suc, t,ir' -erson *%s %ble to )i2 t,e -rice but it is too ,i$, or it is too lo* %n' t,ere is )r%u' em-loye'0 t,e contr%ct is not +oi'0 t,e reme'y o) suc, -%rty is to $o to court to )i2 t,e -rice. 'ay a sale be alid if the price of a car is al"ed at 1 peso$ Fes0 bec%use un'er t,e l%* $ross in%'e3u%cy %s to t,e -rice 'oes not in+%li'%te t,e contr%ct0 e2ce-t %s ot,er*ise -ro+i'e' by l%*. An e2%m-le o) t,is e2ce-tion is t,%t o) lesion *,ere suc, *oul' in+%li'%te t,e contr%ct o) s%le un'er Art. 14E1 *,ere t,e $u%r'i%n sells t,e -ro-erty o) t,e *%r' %n' t,ere is lesion o) more t,%n 6G o) t,e +%lue o) suc, t,in$ suc, contr%ct is rescissible. I) t,e buyer s,oul' be t,e $u%r'i%n Art. 15E1 s,oul' %--ly %n' t,e contr%ct s,%ll be +oi'. I) t,ere is % $ross in%'e3u%cy %n' t,e -%rties inten' %not,er contr%ct0 t,en suc, *oul' be % simul%te' s%le0 %n' %s suc, t,e contr%ct s,%ll be +oi'0 %s *,en t,e re%l -ur-ose o) t,e s%le is 'on%tion. 3s there a need for deli ery in order that a contract of sale be perfected$ As % consensu%l contr%ct t,ere is no nee' )or 'eli+ery in or'er t,%t % contr%ct o) s%le *ill be -er)ecte'. 7,e only 3uestion is ,ere t,e time *,en t,e contr%ct is -er)ecte'. 4ption sale An o-tion s%le is -er)ecte' u-on t,e )%ll o) t,e ,%mmer or %ny ot,er custom%ry m%nner by *,ic, t,e s%me m%y be consi'ere' -er)ecte'. ;e)ore t,e )%ll o) t,e ,%mmer0 t,e buyer *,o m%'e ,is bi' m%y %ctu%lly *it,'r%* ,is bi'.

Wit, res-ect to t,e %uctioneer0 ,e m%y *it,'r%* %s % rule0 be)ore t,e )%ll o) t,e ,%mmer. Unless t,e bi''in$ ,%s been %nnounce' to be *it,out reser+e' %s )%r %s t,e %uctioneer is concerne'. 4ption contracts In t,e c%se o) S%nc,e? +s. Ri$os0 Ri$os o))ere' to sell % -%rcel o) l%n' to S%nc,e? )or % cert%in -rice0 %n' Ri$os $%+e S%nc,e? ye%rs *it,in *,ic, to 'eci'e *,et,er ,e *ill buy it or not. In o-tions t,e o-tionee or o))eree ,e is not boun' to -urc,%se0 but ,e ,%s t,e o-tion. 7,ere)ore S%nc,e? ,%s t,e o-tion on *,et,er to buy t,e l%n' or not. ;e)ore t,e l%-se o) t,e ye%r -erio'0 S%nc,e? tol' Ri$os t,%t ,e is buyin$ t,e l%n'0 but Ri$os re)use' to sell it %n' s%i' t,%t ,e *%s not boun' by t,is %$reement bec%use t,ere *%s no o-tion money $i+en by S%nc,e? )or l%c8 o) consi'er%tion. ;ut t,e SC s%i' t,%t since S%nc,e? t,e o))eree %cce-te' t,e o))er %n' consi'ere' to buy *it,in t,e -erio' be)ore t,e o))er *%s *it,'r%*n % -er)ecte' contr%ct o) s%le *%s cre%te' e+en *it,out t,e o-tion money $i+en by t,e o))eree. In t,is c%se t,ere *%s no o-tion contr%ct0 %n' t,is is merely %n o-tion %$reement *,ereby *,%t *%s $i+en is merely %n o))er on t,e -%rt o) Ri$os0 t,ere)ore be)ore t,e ot i o n * % s *it,'r%*n re$%r'less *,et,er %n o-tion money is $i+en0 % -er)ecte' contr%ct o) s%le *%s cre%te'. Assumin$ t,ere *%s o-tion money0 be)ore t,e o))eree 'eci'e to buy t,e o))error *it,'r%* on t,e 9t, mont,0 but on t,e 1!t, mont, t,e o))eree 'eci'e' t,%t t,e o))eror no* *%nt to buy. C%n t,e o))eree com-el t,e seller to sell t,e o))er ,%+in$ been *it,'r%*n be)ore it *%s %cce-te'= No. 7,e %ction )or s-eci)ic -er)orm%nce *ill not -ros-er bec%use t,e o))eree *,o 'eci'e' to buy0 *,en t,e o))error *it,'r%* t,e s%me0 t,ere is no more o))er to be consi'ere'. ;ut t,e o))eree c%n cl%im )or '%m%$es bec%use t,e o))error is boun' to $i+e t,e o))eree ye%rs *it,in *,ic, to 'eci'e. >e is li%ble not un'er % -er)ecte' contr%ct o) s%le but on % -er)ecte' contr%ct to o))er.
"

4ption money disting"ished from earnest money O-tion money is not consi'ere' -%rt o) t,e -riceC e%rnest money is consi'ere' %s -%rt o) t,e -rice but %lso consi'ere' %s -roo) o) % -er)ecte' contr%ct o) s%le. Note ,o*e+er0 %s 'eci'e' by t,e SC0 *,en t,e o-tion money *ill be tre%te' by t,e -%rties %s -%rt o) t,e -rice0 t,e s%me s,%ll be bin'in$ bet*een t,e -%rties. Wit,out sti-ul%tion0 it is not consi'ere' -%rt o) t,e -rice. O-tion money is % consi'er%tion )or t,e o-tion. 2arnest money E%rnest money m%y be c%lle' by %ny ot,er n%me but i) it is consi'ere' by t,e -%rties %s -%rt o) t,e -rice0 suc, *oul' be consi'ere' %s e%rnest money. >o*e+er0 e+en i) t,ere is e%rnest money0 it 'oes not me%n t,%t t,ere is %lre%'y % -er)ecte' contr%ct o) s%le. I) it is merely % -roo) o) % -er)ecte' contr%ct o) s%le. E+en i) t,ere is e%rnest money $i+en0 i) t,e contr%ctin$ -%rties ,%+e not %$ree' %s to t,e tot%l %mount o) t,e -urc,%se -rice0 t,en t,ere *ill ne+er be % contr%ct o) s%le. E+en t,ou$, t,ey ,%+e %$ree' %s to t,e tot%l %mount o) t,e -rice %n' %n e%rnest money is $i+en0 %n' *ere %ble to %$ree %s to t,e tot%l %mount o) t,e -rice0 but not %s to t,e ob.ect t,en t,ere *ill be no -er)ecte' contr%ct o) s%le. E%rnest money is not t,e only re3uirement in % -er)ecte' contr%ct o) s%le. 1here is a perfected sale by the mere meeting of the minds, does it mean that it is already enforceable$ Not t,%t u-on -er)ection t,e -%rties to suc, contr%ct0 t,e -%rties %lre%'y ,%+e t,e ri$,t to com-el t,e -%rties to -er)orm t,eir res-ecti+e obli$%tions. ;ut -er)ection is sub.ect to )orm%lities re3uire' by l%* li8e t,e st%tute o) )r%u's. 7,ere m%y be % meetin$ o) t,e min's0 but t,e s%me s,%ll be unen)orce%ble.

As % rule0 t,ere is no %ctu%l )orm %s -ro+i'e' in Art. 15E4 t,%t % contr%ct o) s%le m%y be in *ritin$0 or by *or' o) mout,0 or -%rtly in *ritin$ %n' -%rtly by *or' o) mout, 0 or m%y be in)erre' )rom t,e con'uct o) t,e -%rties )or %s lon$ %s t,e essenti%l re3uisites %re -resent. ;ut ,o*e+er0 *,en t,e l%* itsel) -ro+i'es )or % -%rticul%r )orm t,en t,e s%me must be com-lie' *it, in or'er )or it to be en)orce%ble0 suc, %s t,e st%tute o) )r%u's %n' t,e c%ttle re$istr%tion 'ecree. %tat"te of 7ra"ds In s%le o) % -%rcel o) l%n' *,ic, is not in *ritin$0 is % +%li' contr%ct but unen)orce%ble. I) t,e ob.ect o) t,e s%le is % mo+%ble0 t,e +%lue o) t,e -rice %$ree' u-on must be consi'ere' %n' not t,e %ctu%l +%lue o) t,e -rice must be consi'ere'. I) t,e -rice is %t le%st 6!! -esos %n' t,e s%me is not in *ritin$0 t,e s%me is unen)orce%ble. E+en i) t,e -rice is less t,%n 6!! -esos t,e s%me must be in *ritin$ *,en t,e s%me is not to be -er)orme' *it,in 1 ye%r. In t,e c%se o) 1%re'es +s. A3uino0 1%re'es ,ere *%s % -ros-ecti+e buyer %n' A3uino *%s t,e o*ner o) % -%rcel o) l%n'. 7,e ne$oti%tion *%s m%'e t,rou$, letters %n' tele$r%ms. Ultim%tely t,e o*ner m%'e % letter si$ne' by ,im to 1%re'es st%tin$ t,%t ,e %n' ,is *i)e %lre%'y %$ree' to sell t,e l%n' %t t,e s-eci)ic -rice. >o*e+er0 t,e e2ecution o) t,e s%le s,%ll be m%'e u-on %rri+%l o) 1%re'es in 1%l%*%n0 %s t,e l%tter is )rom Nort,ern Lu?on. W,en 1%re'es %rri+e' in 1%l%*%n0 t,e seller s%i' t,%t ,e *%s no lon$er intereste' in sellin$ t,e l%n'. >ence0 1%re'es )ile' %n %ction to com-el A3uino to sell t,e l%n'. A3uinoHs 'e)ense on t,e ot,er ,%n' *%s ,e St%tute o) :r%u's0 since t,ere *%s no 'ee' o) s%le0 t,ere *%s no -er)ecte' contr%ct o) s%le. 7,e SC rule' t,%t t,e contr%ct *%s no lon$er co+ere' by t,e st%tute o) )r%u's since t,ere *%s %lre%'y % letter. Un'er t,e l%*0 s-eci)ic%lly un'er Art. 15!4 e+en i) t,e contr%ct 'oes not com-ly *it, t,e st%tute o) )r%u's0 t,e s%me s,%ll be en)orce%ble %n' no lon$er co+ere' un'er t,e o-er%tion o) t,e st%tute o) )r%u's *,en t,e s%me *%s m%'e t,rou$, some note or memor%n'um0 be in *ritin$0 %n' subscribe' by t,e -%rty c,%r$e'0 or by ,is
1!

%$ent. >ence0 A3uino c%n be com-elle' to e2ecute % )in%l 'ee' o) s%le. 3n a deed of sale there can be 1++8s ob obligations of the endors beca"se of the stip"lation. 1here are only few obligations imposed by law to the endors, and these are9 1. 7,e obli$%tion to tr%ns)er o*ners,i. 7,e obli$%tion to 'eli+er 4. 7,e obli$%tion to *%rr%nt t,e t,in$ 5. 7,e obli$%tion to t%8e c%re o) t,e t,in$ sol' *it, t,e 'ili$ence o) % $oo' )%t,er o) t,e )%mily )rom t,e time o) -er)ection u-to t,e time o) 'eli+ery. 6. 7,e obli$%tions to -%y t,e c%-it%l $%ins t%2 9. 7,e obli$%tions to 'eli+er t,e )ruits 4bligations to deli er the fr"its A sale of a mango plantation between A and B, A agreed to deli er to B the fr"its only after 0 months from the perfection of the sale. &espite the arri al of the period, the seller too) him 1 month to deli er the fr"its to the b"yer. A howe er, sold the fr"its to a third person : in good faith. Can B reco er the fr"its from :$ #hat are the remedies of the b"yer as against the seller$ Un'er t,e l%* un'er Art. 164<0 7,e +en'or is boun' to 'eli+er t,e t,in$ sol' %n' its %ccessions %n' %ccessories in t,e con'ition in *,ic, t,ey *ere u-on t,e -er)ection o) t,e contr%ct. All t,e )ruits s,%ll -ert%in to t,e +en'ee )rom t,e '%y on *,ic, t,e contr%ct *%s -er)ecte'. Art. 164< ,o*e+er s,oul' be consi'ere' in rel%tion to Art. 1195 *,ic, -ro+i'es t,%t @t,e cre'itor ,%s % ri$,t to t,e )ruits o) t,e t,in$ )rom t,e time t,e obli$%tion to 'eli+er it %rises. >o*e+er0 ,e s,%ll %c3uire no re%l ri$,t o+er it until t,e s%me ,%s been 'eli+ere' to ,imA. :rom t,e )ore$oin$ t,ere)ore t,e +en'or %ctu%lly ,%s ri$,ts to t,e )ruits but not )rom t,e time o) -er)ection. ; is only entitle' to t,e )ruits o) t,e t,in$ )rom t,e en' o) t,e 9 mont, -erio' b%se

on t,eir %$reement bec%use until suc, time t,ere is no obli$%tion to 'eli+er *,ic, %rise. Secon'ly0 t,e buyer c%nnot com-el t,e buyer to recei+e t,e )ruits bec%use ,e s,%ll not %c3uire re%l ri$,ts o+er suc, )ruits until t,e 'eli+ery o) t,e t,in$. 7,e buyerHs reme'y is $oin$ %)ter t,e seller. 4bligation to ta)e care of the thing 7,e -remise in t,is 8in' o) obli$%tion o) t,e seller is % 'etermin%te t,in$. I) t,e t,in$ sol' is % $eneric t,in$0 t,ere is not,in$ to be t%8en c%re o)0 it *ill become 'etermin%te only u-on 'eli+ery. One scen%rio *,ere t,e seller 'oes not ,%+e t,e obli$%tion to t%8e c%re o) t,e t,in$ )rom t,e time o) -er)ection0 *,en t,e buyer %lre%'y *%s in -ossession o) t,e t,in$ %t t,e time o) -er)ection. 4bligation to pay e,penses or capital gains ta, 7,rou$, sti-ul%tion0 t,e -%rties c%n %$ree %s to *,o is $oin$ to -%y t,e t%2. 'ay a person sell something which does not belong to him$ (Bar ;"estion) Fes. O*ners,i- o+er % t,in$ is not % re3uisite in or'er )or % s%le to become +%li'. ;ut i) t,e seller 'oes not o*n t,e t,in$ ,e m%y ,%+e % -roblem in -er)ormin$ ,is obli$%tion to t r % n s ) e r o*ners,i-. 7,e -roblem %ctu%lly is *,et,er or not t,e buyer %c3uire o*ners,i- o+er t,e t,in$ sol' by t,e -erson sellin$ *,o 'oes not o*n t,e t,in$. 7,us0 only t,ose -ersons *,o ,%+e t,e ri$,t to sell c%n tr%ns)er o*ners,i-. 7,e o*ner or e+en i) not t,e o*ner % -erson ,%s been $i+en %ut,ority by t,e o*ner0 t,ere)ore ,e *ill ,%+e t,e ri$,t to sell0 or t,e l%* %ut,ori?es % -erson t,e -o*er to sell (%rt. 16!6 st%tutory -o*er to sell# (e.$. t,e not%ry -ublic0 t,e -le'$ee un'er -le'$e0 un'er t,e mort$%$e l%* t,e li3ui'%tors ,%+e %ut,ority to sell0 t,e $u%r'i%n0 recei+ers etc#0 t,ose *,o ,%+e t,e %ut,ority o) t,e court (s,eri)) in %n e2ecution s%le or )oreclosure s%le#.
11

'ay the b"yer act"ally ac!"ire ownership o er the thing sold if the seller has no right to sell$ Un'er Art. 16!6 t,e buyer 'oes not %c3uire better title t,%n *,%t t,e seller ,%'. I) t,e seller is neit,er t,e o*ner or 'oes not ,%+e %ut,ority to sell0 t,e buyer %c3uires no better title t,%n *,%t t,e seller ,%'. As %n e2ce-tion0 t,e buyer c%n %c3uire better title t,%n *,%t t,e seller ,%'0 e+en i) t,e seller is not t,e o*ner or 'oes not ,%+e t,e ri$,t to sell0 *,en/ %. by esto--el in -%it - by t,e -rinci-le o) esto--el % -erson *ill be -reclu'e' )rom 'enyin$ t,%t % -erson ,%s %ut,ority to sell by t,e o*ners %cts or re-resent%tions. 7,is esto--el is ot,er *ise 8no*n %s esto--el in -%it (e3uit%ble 8in' o) esto--el#. %. esto--el by 'ee' (tec,nic%l esto--el#-Art. 1545. W,en % -erson *,o is not t,e o*ner o) % t,in$ sells or %lien%tes %n' 'eli+ers it0 %n' l%ter t,e seller or $r%ntor %c3uires title t,ereto0 suc, title -%sses by o-er%tion o) l%* to t,e buyer or $r%ntee. %. Esto--el by recor' (tec,nic%l esto--el#%. A s%le by %n %--%rent o*ner %. 1urc,%ses )rom % merc,%nt store A and B are co<owners of a parcel of land. A and B sold it to : erbally. : sold the land for 15+,+++ to =. #o"ld = be considered to ha e ac!"ired ownership o er the parcel of land$ Un'er Art. 1545 or ot,er*ise 8no*n %s esto--el by 'ee' or tec,nic%l esto--el. W,en t,e seller *,o *%s not t,e o*ner %t t,e time o) t,e s%le %c3uire' o*ners,i-0 %utom%tic%lly o*ners,i-%sses to t,e buyer by o-er%tion o) l%*. >o*e+er0 un'er Art. 1545 'oes not %--ly bec%use t,e l%* re3uires t,e 'eli+ery o) t,e -%rcel o) l%n' to I t,e buyer0 %n' un'er t,e )%cts %rt. 1545 *oul' not %--ly bec%use 1. t,ere *%s no s,o*in$ t,%t t,ere *%s 'eli+eryJ-%yment %lre%'y 'ue to t,e +erb%l n%ture o) t,e s%le ,ence unen)orce%ble. >ence it coul' not be s%i'

t,%t by o-er%tion o) l%*0 F li8e*ise %c3uire' o*ners,i- by esto--el by 'ee'. %ale by the nephew of the owner of a parcel of land. %ince the nephew co"ld not deli er the land to the b"yer, the b"yer filed a complaint for estafa. 3n this criminal case, for the acc"sed to be ac!"itted, he as)ed his "ncle to testify that he act"ally had the a"thority to sell. #hen the "ncle testified in co"rt, the nephew was ac!"itted beca"se after all, he had the a"thority to sell. After the ac!"ittal of the nephew and the b"yer demanded from the "ncle for the deli ery, the "ncle ref"sed for in reality he said that he did not a"thori>ed his nephew. %o when a ci il case was filed to compel the "ncle to deli er and transfer ownership o er the thing, will that action prosper$ Fes0 bec%use t,e o*ner c%nnot be %llo*e' no* t,%t ,is ne-,e* *%s not %ut,ori?e' *,en ,e testi)ie' in court t,%t ,e $%+e suc, %ut,ority. 7,is is consi'ere' %s esto--el by recor' %n' %lso consi'ere' tec,nic%l esto--el. &isc"ss ?%ale by an apparent owner@$ As -ro+i'e' by )%ctors %ct0 recor'in$ l%*s0 %n' ot,er l%*s *,ic, en%ble t,e %--%rent o*ner o) $oo's to 'is-ose o) t,em %s i) ,e *ere t,e re%l o*ner. Ander the 7actors (an old name for agent) Act, e en if the agent has no right to sell a specific thing a third person may act"ally ac!"ire ownership beca"se he can only rely on the power of attorney as written. 3f for e,ample an agent thro"gh a special power of attorney was gi en the power to p"rchase a car, howe er in the erbal instr"ction the agent was a"thori>ed to sell that car only to one of the members of a cert a i n organi>ation. B"t the agent sold the car to a person other than to a member of the organi>ation as directed by the principal. #o"ld that b"yer ac!"ire ownership e en if the agent has no right to sell to that b"yer$ Fes. Un'er Art 1"!! so )%r %s t,ir' -ersons %re concerne'0 t,ey only ,%+e to rely on t,e S1A %s *ritten e+en i) t,e seller %$ent *%s not
1

%ut,ori?e' %s instructe'0 t,e buyer %c3uire o*ners,i- o+er t,e t,in$ sub.ect o) t,e s%le. 1he elder brother 'ig"el 'apalo donated half of his land to his yo"nger brother beca"se the latter was abo"t to get married. 3nstead of the yo"nger brother as)ed his elder brother to sign a deed of donation, he as)ed the latter to sign a deed of sale not only half of the land b"t the entire parcel of land. /e was therefore able to register the property in his name. After 1+ years, howe er, he sold this entire parcel of land to the Barcisos. 4b io"sly, the yo"nger brother is not a"thori>ed to sell with respect to the other half, beca"se what was only gi en is only half of the land. B"t the Barcisos claimed that they bo"ght the land on an apparent owner beca"se the entire property was registered in the ame of the seller. &id the Barcisos ac!"ired ownership beca"se they bo"ght the entire property from an apparent owner$ Not necess%rily0 bec%use t,e seller must not only be %n %--%rent o*ner but buyer must %lso be % buyer in $oo' )%it,. 7,e buyers in t,is c%se is not in $oo' )%it, bec%use be)ore t,ey bou$,t t,e l%n'0 t,ey *ent )irst to t,e ,ouse o) (i$uel (%$-%lo to in3uire on *,et,er ,e (youn$er brot,er# *oul' %llo* ,is youn$er brot,er to sell t,%t -%rcel o) l%n'. 7,ere)ore t,ey %re in b%' )%it, bec%use t,ey 8ne* %n' bec%use (i$uel %lso ,%' t,e ri$,t to t,e ,%l) -ortion o) t,e l%n' *,en t,ey bou$,t t,e entire -%rcel o) l%n'. 7,ere)ore t,ey 'i' not %c3uire o*ners,i- o+er t,e entire -%rcel o) l%n' ((%-%lo +s. (%-%lo# 1he owner of a parcel of land co ered by a 1C1 or 4C1, mortgaged a parcel of land to the creditor and deli ered the 1C1 or 4C1. 1his mortgagee forged the signat"re of the owner in a deed of sale. 1h"s, he was able to register the property in his name with that forged deed. 1hereafter, the mortgagee who was a b"yer in the forged deed, sold that land to a third person who had no )nowledge of the transaction between the mortgagor A and mortgagee B. &id the mortgagee ac!"ired ownership$ &id the b"yer ac!"ired the property o er the parcel of land$ #hen can a b"yer said to be in good faith$

7,e mort$%$ee 'i' not %c3uire o*ners,i- by +irtue o) % 'ee' o) s%le. A )or$e' 'ee' is % +oi' instrument %n' c%nnot be t,e source o) % +%li' title to t,e buyer. 7,is )or$e' 'ee' ,o*e+er0 c%n be t,e root o) % +%li' title un'er t,e mirror -rinci-le *,en t,e buyer bou$,t it )rom t,e mort$%$ee in *,ose n%me it *%s re$istere'0 %n' relie' on t,e 7C70 t,en i) ,e %c3uire' t,e -ro-erty in $oo' )%it,0 t,en ,e ,%' %c3uire' o*ners,i- o+er t,e -%rcel o) l%n' un'er Art. 16!6 in rel%tion to 1D 16 "0 *,en t,e buyer bou$,t % -%rcel o) l%n' relyin$ on t,e 7C7 %lone %n' buyin$ it in $oo' )%it, t,en ,e *ill ,%+e % better ri$,t t,%n t,e o*ner. ;y t,e mere )%ct t,%t t,e buyer 'i' not 8no* t,e e2ecution o) t,e time o) t,e 'ee' necess%rily me%n ,e is %lre%'y % buyer in $oo' )%it,= Not necess%rily bec%use t,e l%* re3uires t,%t ,e ,%' )ully -%i' *it,out 8no*le'$e o) 'e)ect in t,e title o) t,e seller. >e m%y ,%+e %c3uire' 8no*le'$e %)ter t,e e2ecution o) t,e 'ee' o) s%le but be)ore -%yment0 ,e c%n no lon$er be consi'ere' % buyer in $oo' )%it,. C1he owner of a parcel of land entr"sted the secretary to ta)e hold of the 1C1 only for safe)eeping. 1h"s the secretary forged the signat"re of his boss in a deed of sale. 1h"s he was able to register the property in his name, and sold this parcel of land to a third person, and s"ch person is considered to be in good faith, then he has ac ! " i r e d ownership o er the thing sold e en if the seller had nor right to sell. 1his is beca"se the b"yer bo"ght it from an apparent owner who disposed of the thing as if it was really owned by him. CAnder the Bew Ci il Code on negotiable doc"ments of title, if goods are co ered by a negotiable doc"ment of title and there was a negotiation of this doc"ment a s a conse!"ence of a sale, if the b"yer bo"ght the good in good faith and for al"e, he will be protected "nder the law, and ac!"ire ownership o er the goods e en if the seller do not ha e the right to sell. 1he seller may ha e ac!"ired o er the doc"ment of title thro"gh iolence, b"t if it is negotiable doc"ment of title especially if it is a bearer
14

instr"ment, then the b"yer may ac!"ire ownership o er the goods e en if the seller had no right to sell. %"n brothers was the owner o f t h e refrigerator (they are engaged in the b"siness of selling refrigerators) and sold it to Dope> in an installment basis. As stip"lated %"n brothers reser ed ownership o er the refrigerator "ntil f"ll payment. 1he b"yer Dope> paid only E++ and the remaining balance to be paid on a monthly basis. /owe er, Dope> sold the refrigerator to Felasco the ery ne,t day in his store to Co Cang Chi". %"n brothers after learning of the s a l e , fi l e d a n a c t i o n t o r e c o e r t h e refrigerator. #o"ld the action prosper$ &id Co Cang Chi" ac!"ired ownership o er the refrigerator$ Can %"n brothers reco er the refrigerator by reimb"rsing the price paid by Co Cang Chi"$ As to Vel%sco0 t,e rule un'er Art. 16!6 is t,%t t,e buyer c%nnot %c3uire better title t,%n *,%t t,e seller ,%'. As to Co C%n$ C,iu0 ,e %c3uire' o*ners,io+er t,e re)ri$er%tor bec%use ,e bou$,t it in % merc,%nt store. Un'er 16!6 l%st -%r%$r%-,0 i) t,e o*ner bou$,t t,e t,in$ in $oo' )%it, )rom % merc,%nt store ,e %c3uires o*ners,i- o+er t,e t,in$. Note0 ,e must ,%+e no 8no*le'$e o) t,e 'e)ect in t,e title o) t,e $oo's. As to t,e issue on *,et,er Sun ;rot,ers reco+er t,e re)ri$er%tor )rom Co C%n$ C,iu by reimbursin$ t,e -rice -%i'. 7,e SC ,el' t,%t Sun brot,ers c%nnot. 7,is is bec%use un'er Art 16!60 t,e o*ners,i- o) t,e buyer *,o bou$,t t,%t t,in$ in t,e merc,%nt store %n' in $oo' )%it, %n' )or +%lue0 is %bsolute in c,%r%cter. Art. 66" 'oes not %--ly to t,is scrn%rio bec%use Sun ;ros. *%s not unl%*)ully 'e-ri+e' nor is t,e t,in$ lost. I) t,e t,in$ *%s lost or t,e o*ner is unl%*)ully 'e-ri+e'0 suc, o*ner c%n reco+er t,e s%me e+en i) it *%s sol t,rou$, % -ublic s%le or in % merc,%nt store but suc, o*ner must reimburse t,e -erson *,o bou$,t in in $oo' )%it, %n' )or +%lue. (Sun brot,ers %n' com-%ny +s. Dose Vel%sco %n' Co C%n$ C,u#

Art. 559. The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession of the same. If the possessor of a movable lost or which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor. !"!a#

4ne painting owned by A was stolen from her. Dater on she noticed that the painting was in the room of B, and as)ed how he ac!"ired the painting, he said that he ac!"ired the same in a gallery a"ction. Can the owner of the painting from whom the painting was stolen reco er the same from B$ A $%llery %uction is not % -ublic s%le. Since it is not % -ublic s%le0 t,e o*ner c%n reco+er t,e -ro-erty e+en *it,out reimbursement. I) it is % -ublic s%le0 t,e o*ner c%n reco+er t,e -%intin$ -ro+i'e' t,e o*ner reimburses t,e buyer o) t,e -rice -%i' in t,%t s%le. A diamond ring was robbed in a b"s, and this same diamond ring has become the ob-ect of a p"blic sale of a pawnshop. Can the owner reco er the ring from the b"yer in the p"blic sale initiated by the pawnshop$ Fes0 i) t,e buyer is in $oo' )%it,0 %n' so lon$ t,e o*ner is *illin$ to reimburse t,e buyer o) t,e -rice -%i' in t,%t s%le0 ,e m%y reco+er t,e s%me. Can the owner reco er a thing from the b"yer who bo"ght in a merchant store$ No. 7,e o*ner c%nnot reco+er t,e t,in$ )rom t,e buyer e+en i) t,e s%me *%s lost or t,e o*ner *%s unl%*)ully 'e-ri+e' t,ereo)0 %n' e+en i) t,e o*ner *is,es to reimburse t,e buyer )or t,e -rice -%i'. As % m%tter o) ri$,t0 t,e buyer in $oo' )%it, %c3uires %bsolute title o+er t,e t,in$. /ow is transfer of ownership o er a thing effected$ It is e))ecte' by 'eli+ery0 %ctu%l or constructi+e.
15

2 erytime there is deli ery, the b"yer ac!"ires ownership "pon deli ery$ Not necess%rily. 7,is is not %n %bsolute t,%t u-on 'eli+ery %s % conse3uence o) s%le0 t,ere is tr%ns)er o) o*ners,i-. 7,ere %re 8in's o) s%le t,%t 'es-ite 'eli+ery0 t,e buyer 'oes not %c3uire o*ners,i-. E2%m-les o) *,ic, %re/ %. Con'ition%l s%le - >ere o*ners,i- is reser+e' by t,e seller0 suc, t,%t 'es-ite 'eli+ery o*ners,i- 'oes not -%ss to t,e buyer. 7,e buyer 'oes not %c3uire o*ners,i- u-on 'eli+ery but r%t,er u-on t,e ,%--enin$ o) t,e con'ition (usu%lly u-on )ull -%yment o) t,e -rice#. %. A s%le on 7ri%l0 s%le on s%tis)%ction or s%le on %--ro+%l - U-on 'eli+ery0 e+en i) t,ere is no %ctu%l 'eli+ery0 t,ere is no tr%ns)er o) o*ners,i- %t t,e time o) 'eli+ery. 7,e buyer *ill %c3uire o*ners,i- o+er t,e t,in$ sol' *,en t,e buyer si$ni)ies ,is %cce-t%nce or %--ro+%l o+er t,e t,in$ sol'. E+en I) ,e 'oes not si$ni)y ,is %--ro+%l o*ners,i- m%y still -%ss to ,im i)/ 1# t,ere is % -erio' %$ree' u-on by t,e -%rties *it, *,ic, to 'eci'e %n' u-on l%-se o) t,e -erio' ,e ,%' im-lie'ly %cce-te' or # e+en be)ore t,e l%-se o) % -erio'0 ,e m%y be consi'ere' %s to ,%+e im-lie'ly %cce-te' i) ,e 'i' %n %ct *,erein ,e *oul' be consi'ere' to ,%+e %'o-te' t,e tr%ns%ction t,en o*ners,i- * o u l ' b e consi'ere' to ,%+e -%ss on t,e buyer (e.$. e+en i) ,e ,%s 1! '%ys *it,in *,ic, to 'eci'e0 %)ter t*o '%ys ,o*e+er )rom 'eli+ery0 ,e sol' t,e c%r to %not,er# 4# t,ere m%y be no -erio' t,e buyer is 'eeme' to ,%+e %cce-te' %)ter t,e l%-se o) % re%son%ble time. W,%t is r e % s o n % b l e t i m e * i l l ' e - e n ' o n t , e circumst%nces surroun'in$ t,e s%le0 t,e -ur-ose o) t,e s%le0 or t,e n%ture o) t,e t,in$ sol'. 3n %ale or (et"rn, ownership passes to the b"yer "pon deli ery$ In t,is 8in' o) s%le o*ners,i- -%sses to t,e buyer u-on 'eli+ery. >o*e+er in t,is 8in' o) s%le0 t,e buyer is $i+en t,e ri$,t to reimburse t,e title b%c8 to t,e seller.

A c%r *%s sol' %t 16!0!!!0 <60!!! *%s -%i' %t t,e e2ecution o) t,e 'ee' o) s%le0 t,e b%l%nce -%y%ble on % mont,ly b%sis. 7,e c%r *%s 'eli+ere' to t,e buyer. >o*e+er0 be)ore ,e coul' -%y t,e b%l%nce0 t,e c%r *%s 'estroye'0 c%n t,e buyer still be com-elle' to -%y t,e b%l%nce= >e c%n still be com-elle' to -%y t,e b%l%nce. 7,is is bec%use u-on 'eli+ery o) t,e c%r to t,e buyer0 t,ere bein$ no retention or reser+%tion o) o*ners,i- by t,e seller0 o*ners,i- -%sses to t,e buyer. Un'er Art 16!50 res -erit 'omino rule0 t,e o*ner be%rs t,e loss. 3n sale on appro al, who bears the loss$ 7,e seller %n' not t,e buyer e+en i) t,ere is no 'eli+ery0 bec%use t,e o*ner is still t,e seller. Un'er t,e res -erit 'omino rule0 t,e o*ner be%rs t,e loss. A set of A'GA( was sold to 1abora on installment basis. 4n the day these boo)s were deli ered to the office of Atty. 1abora, the entire bloc) where the office of the latter is located was b"rned together with the A'GA(. Atty 1abora ref"sed to pay the balance despite demand by lawyer8s co. Dawyer8s co therefore filed a case. 1wo defenses were raised 1) res perit domino r"le beca"se there is a stip"lation in the contract that the seller shall retain ownership o er the boo)s "ntil f"ll payment, and if lawyers co was the owner then it sho"ld bear the loss. 3s the arg"ment correct$ No. I) t,ere *%s % sti-ul%tion in t,e contr%ct t,%t o*ners,i- s,%ll be ret%ine' by l%*yers co until )ull -%yment *%s m%'e0 t,ere *%s %lso % sti-ul%tion t,%t t,e ris8 o) loss s,%ll -ert%in to t,e buyer %t t,e time t,e boo8s *ere 'eli+ere' *,%te+er t,e c%use o) t,e loss. 7,is is %n e2ce-tion to t,e res -erit 'omino rule. Ass"ming there was no stip"lation that the ris) of loss shall pertain to the b"yer "pon deli ery, may the b"yer still be held to answer for the loss$ Un'er Art. 16!50 *,en t,e o*ner reser+e' t,e title to t,e -ro-erty only to secure t,e -%yment
16

o) t,e -rice o) t,e buyer0 t,en by l%*0 ris8 o) loss s,%ll only -ert%in to t,e buyer. 7,is is 8no*n %s % security title. 7,ere)ore0 e+en i) t,e buyer 'i' not %c3uire title u-on 'eli+ery0 ,e be%rs t,e loss. #hene er there is delay in the deli ery of the thing sold, who bears the loss$ It 'e-en's *,o m%y be %t )%ult )or t,e 'el%y in t,e 'eli+ery. It m%y be t,e seller or t,e buyer. 3f for e,ample, there is a stip"lation that the b"yer m"st retrie e the goods on the wareho"se of the seller on a specific date. 4n that date agreed "pon, the seller demanded the b"yer to get the goods at the wareho"se. &espite s"ch, the b"yer failed to obtain the goods. 1he ne,t d a y, t h e wareho"se was b"rned. #ho then shall bear the loss$ >ere t,e seller *%s still t,e o*ner0 ,o*e+er0 t,e buyer *%s %lre%'y in 'el%y in retrie+in$ t,e $oo's0 ,ence0 un'er Art. 16!50 t,e buyer be%rs t,e loss0 %s %n e2ce-tion to t,e res -erit 'omino rule. 3f the seller is the one at fa"lt, who bears the loss$ 7,e -remise ,ere0 t,e o*ners,i- s,oul' ,%+e been -%sse' to t,e buyer but t,e $oo's %re still *it, t,e seller (t,is coul' ,%--en by constructi+e 'eli+ery but -,ysic%l -ossession is still *it, t,e seller#0 e+en so0 t,e seller s,%ll be%r t,e loss bec%use ,e *%s t,e one %t )%ult )or t,e 'el%y in t,e 'eli+ery o) t,e t,in$ sol' 'es-ite 'em%n' by t,e buyer. An owner of a registered land sold the land to B. B did not register the sale. A few days thereafter, A sold again the same parcel of land to C, who this time registered the sale. #ho between B and C ha e a better right to this parcel of land$ It 'e-en's on *,et,er or not C re$ister t,e s%le in $oo' )%it,. Note/ In Art. 1655 -ert%inin$ to 'ouble s%les0 %s to *,ic, rule to %--ly *oul' 'e-en' on t,e n%ture o) t,e t,in$ sol' *,et,er it is immo+%ble or % % mo+%ble. I) it is % s%le o) % mo+%ble.

I) t,e t,in$ sol' is % mo+%ble0 t,e )irst -erson *,o too8 -ossession o+er t,e t,in$ s,%ll ,%+e % better ri$,t. I) t,e t,in$ sol' is %n immo+%ble0 t,e buyer *,o )irst re$ister in $oo' )%it, *ill ,%+e t,e better ri$,t0 i) t,ere *%s no re$istr%tion0 t,en t,e -erson *,o )irst too8 -ossession0 i) no one is in -ossession t,en it *ill be t,e buyer *it, t,e ol'est title in $oo' )%it,. Koo' )%it, ,ere 'oes not -ert%in to 8no*le'$e o) % 'e)ect o) title o) t,e secon' buyer since ,e is t,e )irst buyer0 $oo' )%it, ,ere me%ns ,e ,%s no 8no*le'$e o) t,e 'e)ect on t,e title o) t,e seller. 3f a thing is sold to two or more persons, what will be the effect of9 1) the first b"yer was the first to register with )nowledge of the second saleH *) the second b"yer was the first to register with )nowledge of the first sale. #ho will ha e a better right in these to scenarios$ 1. In t,e )irst scen%rio0 ,is 8no*le'$e o) t,e secon' s%le 'oes not m%8e ,im % re$istr%nt in b%' )%it,. Bno*le'$e s,oul' -ert%in to one *,ic, is -rior s%le in or'er to m%8e one % re$istr%nt in b%' )%it,. >ence0 ,ere ,e ,%s % better ri$,t. . As to t,e secon' scen%rio0 ,e is consi'ere' % re$istr%nt in b%' )%it, bec%use o) ,is -rior 8no*le'$e o) % )ormer s%le. >ence0 ,e *ill not ,%+e % better ri$,t. 3f a person bo"ght the thing witho"t )nowledge of the prior sale and registered the same, wo"ld that mean he is a registrant in good faith$ Not necess%rily. 7,is is bec%use ,e m%y ,%+e %c3uire' 8no*le'$e -rior to t,e re$istr%tion. but %)ter buyin$. W,%t is re3uire' by l%* is not % buyer in $oo' )%it,0 but % re$istr%nt in $oo' )%it,. ;%utist% +s. Sioson 1he owner sold a registered parcel of land to B who did not register, neither did he too) physical possession. After the sale they e,ec"ted a lease agreement in which the
19

b"yer is now the lessor and that the seller became the lessee. /ence, the seller contin"ed to be in possession of the land not as a concept of an owner b"t of a lessee. After the sale and the contract of lease, A sold this parcel of land to C, who also did not register the same, and this time C too) physical possession. #ho between B and C had a better right$ ; *oul' ,%+e % better ri$,t bec%use *,en ; e2ecute' % le%se contr%ct *it, A0 ; is in contem-l%tion o) l%* in -ossession o) t,e -ro-erty0 *,ic, is le$%l -ossession0 ,e ob+iously is t,ere)ore % -ossessor in $oo' )%it,0 t,e )irst *,o too8 -ossession in $oo' )%it,. 7,ou$, C ,%' -,ysic%l -ossession o+er t,e -ro-erty0 ,e is consi'ere' to be t,e one secon' in -ossession. ; t,ere)ore *%s consi'ere' to ,%+e % better ri$,t. Note/ Le$%l -ossession is su))icient to 'etermine %s to *,o ,%+e % better ri$,t bet*een t*o -ersons. C%rumb% +s. CA %ale of a parcel of land to B who too) possession of the land. /owe er, this seller a -"dgment debtor to one of his creditor. Beca"se of a -"dgment in fa or of a creditor C, the parcel of land had become the s"b-ect of an e,ec"tion sale. 1hen the b"yer became C who registered the sale. #ho will ha e a better right between B and C and C had no )nowledge of the first sale$ ; *oul' ,%+e % better ri$,t bec%use t,is -%rcel o) l%n' *%s re$istere' un'er t,e 7orrens System. Art.1655 'oes not %--ly to unre$istere' l%n's. Only t,ose l%n's *,ic, %re re$istere' un'er t,e 7orrens System c%n be co+ere' by t,e -ro+isions o) Art. 1655. It coul' be notice' t,%t C ,%' re$istere' t,e l%n'0 but t,e s%me is not co+ere' un'er t,e torrens system bec%use0 t,ere is %not,er system o) re$istr%tion o) unre$istere' l%n's. 7,ere is % 'i))erent boo8 co+ere' by t,is 8in' o) re$istr%tion0 ,ence0 Art 1655 *oul' not %--ly.

7,ere)ore0 i) ARt. 1655 *oul' not %--ly0 ; *oul' ,%+e % better ri$,t bec%use t,ere *%s %ctu%l 'eli+ery to ,im. 7,er)ore0 un'er t,e $ener%l rule0 u-on 'eli+ery0 o*ners,i- -%sses to t,e buyer. W,en o*ners,i- ,%' -%sse' to t,e buyer *,en t,e -ro-erty *%s sol' in t,e e2ecution s%le0 t,e buyer *oul' not $et %nyt,in$ )rom t,e e2ecution s%le bec%use ,e merely ste-s into t,e s,oes o) t,e .u'$ment 'ebtor. Since t,e .u'$ment 'ebtor ,%' no o*ners,i- o+er t,e l%n' %t t,e time o) s%le0 t,e ,e 'i' not %c3uire o*ners,i- by +irtue o) t,%t s%le. Note/ 7o 'etermine t,%t t,e l%n' is un'er t,e torrens system0 t,e o*ners,i- is -ro+en by 7C7Hs or OC7Hs0 ot,er*ise i) -roo) o) o*ners,i%re mere t%2 'ecl%r%tions0 it *ill not be consi'ere' %s re$istere' l%n'. Obli$%tion to 'eli+er to ob.ect o) t,e s%le In t,is obli$%tion one must 'istin$uis, )irst t,e sub.ect m%tter o) t,e s%le *,et,er it is % t,in$ or % ri$,t. 4wnership passes "pon meeting of the minds as a conse!"ence of sale$ :%lse0 t,ere must be 'eli+ery. As to deli ery of things as a conse!"ence of sale )nown as tradition, there are two modes recogni>ed by law, what are these$ 1. Actu%l - (%teri%l 'eli+ery or re%l 'eli+ery 7o ,%+e % +%li' %ctu%l 'eli+ery t,e t,in$ must be sub.ect to -ossessio n %n' control o) t,e +en'ee. I) t,e t,in$ sol' *%s 'eli+ere' to % t,ir' -erson0 t,ere m%y still be %ctu%l 'eli+ery *,en suc, t,ir' -erso n , % s %ut,ority to recei+e )rom t,e +en'ee. As suc, ,e becomes %n %$ent o) t,e +en'ee0 t,us0 t,ere is %ctu%l 'eli+ery. . Constructi+e 'eli+ery %. ;y t,e e2ecution o) % -ublic instrument (i) t,e contr%ry intention 'oes not %--e%r on t,e 'ocument# by t,e mere e2ecution o) t,e
1<

-ublic instrument0 t,%t is %lre%'y e3ui+%lent to 'eli+ery. >ence0 o*ners,i- -%sses to t,e buyer. %. Deli+ery o) Beys (7r%'icion Symbolic%# %. ;y mere consent or %$reement o) t,e -%rties -ro+i'e' %t t,e time o) t,e s%leC -ossession o) t,e $oo's c%nnot be tr%ns)erre' to t,e buyer (e.$. *,en t,e t,in$ *%s t,e sub.ect m%tter o) t,e le%se0 bec%use be)ore e2-ir%tion o) t,e le%se t,e t,in$ c%nnot be tr%ns)erre' to t,e buyer#. %. 7r%'icion ;re+i (%nu - >ere0 t,e buyer *%s %lre%'y in -ossession t,e -ro-erty0 but t,ere is % c,%n$e %s to t,e st%tus o) -ossession suc, %s t,%t o) % lessee0 'e-osit%ry or %$ent to -ossession in t,e conce-t o) %n o*ner. %. 7r%'icion Constitutum 1ossesorium - >ere t,e seller *oul' still continue to be in -ossession o) t,e t,in$ %)ter t,e s%le but no lon$er in t,e conce-t o) %n o*ner but in %not,er c%-%city. 1he original owner here, : I = whose properties are fi,t"res in a salon, while J I & was a -"dgment creditor of : I =. Beca"se of -"dgment rendered by a co"rt in fa or of J, the sheriff le ied "pon the properties of : and = which was still in the latter8s physical possession. 1his e,ec"tion s a l e w a s !"estioned by A I B on the premise that these goods were already sold to them prior to the le y. /ence, if these goods were sold to them prior to the le y, ownership already passed to A I B, and as s"ch there is nothing more to be le ied "pon. B"t the d e b t o r w a s er y m " c h i n p h y s i c a l possession. 'ay A I B be considered as owners of the land despite them not being in act"al physical possession of the good sold, and ma)e them to ha e a better right o er the -"dgment creditors o er an e,ec"tion sale$ E+en i) t,ere *%s no -,ysic%l -ossession %n' t,ere *%s no %ctu%l 'eli+ery0 t,ere m%y be % constructi+e 'eli+ery by t,e e2ecution o) % -ublic instrument. Un)ortun%tely in t,is c%se0 t,e 'ee' o) s%le *%s merely in % -ri+%te instrument.

In or'er )or t,e o*ners,i- to -%ss0 it ,%' to be in % -ublic instrument (constructi+e 'eli+ery#. 3f for e,ample the seller and the b"yer p"rs"ant to their agreement deli ered the goods to a common carrier, "pon deli ery of the goods to a common carrier, wo"ld that res"lt in transfer of ownership immediately$ I) 'eli+ery to t,e common c%rrier is 'eli+ery to t,e buyer0 t,en o*ners,i- -%sses to t,e buyer u-on 'eli+ery to t,e common c%rrier. Suc, is % $ener%l rule0 t,e e2ce-tions %re/ 1. i) t,ere *%s sti-ul%tion t,%t o*ners,i- *ill not -%ss to t,e buyer until )ull -%yment. . E+en i) t,e 'ee' o) s%le 'oes not -ro+i'e )or suc, sti-ul%tion0 t,e seller m%y ,%+e obt%ine' % bill o) l%'in$ *,ic, -ro+i'es t,%t t,e $oo's %re 'eli+er%ble to t,e seller ,imsel) or ,is %$ent. 7,us 'es-ite 'eli+ery o) t,e $oo's to t,e s,i-0 t,ere is no tr%ns)er o) o*ners,ibec%use it *oul' still be t,e seller *,o *oul' ,%+e t,e ri$,t to obt%in t,e $oo's )rom t,e common c%rrier. Bin's o) Deli+er y o) Incor-ore%l -ro-erties (Lu%si 7r%'icion# #hat are the three modes of deli eries as to rights$ 1. E2ecution o) % -ublic instrumentC ()rom t,e 'eli+ery o) certi)ic%tes0 o*ners,i- -%sses# . Use by t,e +en'ee o) ,is ri$,ts *it, t,e +en'ors consent (e.$. in s%les o) s,%res o) stoc80 t,e +en'ee m%y not %l*%ys necess%rily ,%+e t,e ri$,t to e2ercise t,e stoc8,ol'ers ri$,ts o+er t,e s,%re0 t,e buyer c%n only e2ercise suc, ri$,t *it, t,e consent o) t,e +en'or#. 3n a sale of 1+++ pairs of shoes, as agreed "pon by the parties. 1he seller deli ered 1*++ pairs of shoes instead of only 1+++. 'ay the b"yer ref"sed to accept e erything$

1E

Un'er t,e l%*0 ,e *oul' only ,%+e t,e ri$,t to re.ect t,e e2cess0 but ,e c%n be com-elle' to %cce-t t,e 1!!!. Ass"ming if what was agreed "pon was 1+++, and the seller deli ered only 8++, can b"yer be compelled to recei e the 8++$ No0 bec%use un'er t,e l%*0 -%rti%l -er)orm%nce is non -er)orm%nce. As % rule0 % cre'itor c%nnot %cce-t -%rti%l -er)orm%nce o) t,e obli$%tion0 e2ce-t *,en t,ere is % sti-ul%tion t,%t -%rti%l 'eli+eries is %llo*e'0 or *,en t,e obli$%tion -ert%ins to one *,ic, is -%rtly li3ui'%te' %n' -%rtly unli3ui'%te'0 obli$%tion to 'i))erent term %n' con'itions. 1he b"yer accepted only 8++ at 1+++ per pair of shoes, it so happened the seller can no longer deli er the balance of *++, since what was pre io"sly stip"lated was 1+++ pair of shoes. /ow m"ch can the b"y e r b e compelled to pay$ It 'e-en's on *,et,er t,e buyer *%s %*%re t,%t t,e seller coul' no lon$er t,e b%l%nce or *,en ,e %cce-te' ,e *%s not %*%re t,%t t,e seller coul' no lon$er 'eli+er t,e b%l%nce. I) ,e *%s %*%re t,%t t,e seller c%n no lon$er 'eli+er t,e b%l%nce0 t,en ,e c%n be com-elle' to -%y %t t,e contr%ct r%te. In t,is c%se0 E!!0!!!. I) ,e ,%' no 8no*le'$e or %*%reness t,%t t,e seller c%n no lon$er 'eli+er t,e b%l%nce *,en ,e %cce-te'0 t,en un'er t,e l%* t,e buyer c%n only be com-elle' to -%y t,e )%ir +%lue o) t,is t,in$. An obligation to deli er 1+++ ca ans of a specific rice (milagrosa). /owe er, the seller deli ered 1*++ ca ans of both milagrosa and combodian rice. 'ay the b"yer ha e the right to re-ect e erything$ Fes ,e *oul' ,%+e t,e ri$,t to re.ect e+eryt,in$ i) t,e $oo's %re 'eeme' in'i+isible. (e%nin$ in e%c, s%c8 o) rice0 c%mbo'i%n rice %n' mil%$ros% rice %re mi2e'. >o*e+er0 i) in e%c, s%c8 it is cle%r )rom e%c, t,%t it is mil%$ros% or comb%'i%n t,en0 t,%t *oul' not be consi'ere' %s in'i+isible0 %n' ,e

c%n only be com-elle' t,e -%rt *,ic, is mil%$ros%0 %n' re.ect t,e combo'i%n rice. %ale of a parcel of land and the price agreed "pon is 1 million at 1++ s!. m., the act"al area deli ered was only K5 s!"are meters, what are the remedies of the b"yer$ 1. S-eci)ic -er)orm%nce i) it is -ossible )or t,e seller to 'eli+er t,e b%l%nce suc, *,en t,e %'.%cent l%n' is still o*ne' by t,e sellerC or . -ro-ortion%l re'uction o) t,e -rice is *it, % s-eci)ic %mount $i+en to % s-eci)ic me%sure. I) t,e s%le is % lum- sum s%le0 t,en %ny 'e)iciency in t,e %re%0 t,ere is no ri$,t to -ro-ortion%l re'uction o) t,e -rice. :urt,er0 e+en i) t,ere is %n incre%se in t,e %re% 'eli+ere'0 t,ere *ill %lso be no %''ition%l incre%se in t,e -rice. 4. Rescission - As % rule it *ill not be % reme'y b%se on t,e )%cts. ;ec%use rescission *ill only be % reme'y i) t,e %re% l%c8in$ is more t,%n 1!G o) t,e %re% %$ree' u-on. ;ut e+en i) t,e %re% l%c8in$ is not more t,%n 1!G0 rescission *ill be % reme'y i) t,e buyer c%n -ro+e t,%t ,e *oul' not ,%+e bou$,t t,e l%n' ,%' ,e 8no*n t,%t it *%s less t,%n 1!! s3. m. Note/ Rescission %n' -ro-ortion%l re'uction i) t,e -ro-erty 'eli+ere' is o) in)erior 3u%lity. I) by %$reement t,e -%rties inten' to sell % rice )iel'0 but it turne' out t,%t !G o) t,e l%n' is not %ctu%lly % rice )iel' %n' c%nnot be -l%nte' by -%l%y. 7,e reme'y o) t,e buyer is to m%8e % -ro-ortion%l re'uction o) t,e -rice i) ,e still *oul' *%nt t,e l%n' or rescission *oul' be % reme'y i) t,e %re% *,ic, is in)erior is more t,%n 1!G o) t,e tot%l %re% o) t,e l%n'.
1l%ce o) Deli+ery Kener%lly0 o*ners,i- -%sses %t t,e -l%ce o) 'eli+ery. W,ere s,oul' t,e t,in$ or $oo's be 'eli+ere'= 1he seller deli ered the goods to the place of b"siness of the b"yer and the b"yer ref"sed to accept the goods. 7rom that moment does it mean that the b"yer is already in delay beca"se he ref"sed to accept the goods$ It 'e-en's on *,et,er t,ere is % sti-ul%tion %s to t,e -l%ce o) 'eli+ery or not. I) t,ere *%s suc, % sti-ul%tion0 %n' t,e

1"

-l%ce %$ree' u-on *%s not t,e -l%ce o) business o) t,e buyer0 o) course ,e *oul' ,%+e t,e ri$,t to re)use' to %cce-t t,e 'eli+ery o) t,e $oo's in ,is -l%ce o) business. In ot,er *or's0 *it, res-ect to t,e -l%ce o) 'eli+ery t,e )irst t,in$ t,%t s,oul' be consi'ere' is t,e/ 1. . 4. 5. 6. sti-ul%tion -l%ce )i2e' by us%$e or tr%'e -l%ce o) business o) t,e seller sellerHs -l%ce o) resi'ence I) t,e t,in$ is not in t,e -l%ce o) business seller nor buyer0 8no*n bot, to t,e -%rties0 but in some ot,er -l%ce. 7,e -l%ce o) 'eli+ery s,%ll be *,ere t,e t,in$ is loc%te' %t t,e time o) -er)ection o) t,e contr%ct.

3s it possible in a C37 arrangement or in an 74B arrangement, the place of deli ery shall be the port of destination$ 7,ese 'eli+ery %rr%n$ements only m%8e rules o) -resum-tion. It must $i+e *%y to t,e re%l intention o) t,e -%rties %s to t,e -l%ce o) 'eli+ery0 *it,out e2-ressly sti-ul%tin$ %s to t,e -l%ce o) 'eli+ery. 7,e intention o) t,e -%rties %s to t,e -l%ce o) 'eli+ery s,%ll be 'etermine' by t,e -l%ce %n' m%nner o) t,e -%yment o) t,e -rice. W,ere t,e -rice is -%i'0 t,%t is 'etermin%ti+e o) t,e -l%ce o) 'eli+ery. Un'er Art. 16E 0 %s to t,e -l%ce o) -%yment0 i) t,ere is no -l%ce %$ree' u-on *,ere -%yment s,oul' be m%'e0 t,e -l%ce o) -%yment s,oul' be m%'e to t,e -l%ce o) 'eli+ery. In one c%se0 it *%s sti-ul%te' in t,e contr%ct t,%t t,e seller c%n 'em%n' t,e -%yment o) t,e -rice0 u-on t,e %rri+%l o) t,e $oo's %t t,e -ort o) 'estin%tion in % CI: %rr%n$ement. 7,e SC rule' t,%t t,e -l%ce o) 'eli+ery is t,e -ort o) 'estin%tion bec%use it is only %t t,%t -ort t,%t t,e seller c%n 'em%n' on t,e -%yment o) t,e -rice. 7,ey ,%+e %$ree' on % CI: %rr%n$ement (-ort o) 'estin%tion# )or t,e -ur-ose o) )i2in$ o) t,e -rice0 bec%use $ener%lly0 CI: me%ns -ort o) ori$in0 ,o*e+er out o) t,e -rice0 it *ill be t,e -ort o) 'estin%tion0 %n' -%yment s,%ll inclu'e t,e cost0 t,e insur%nce %n' t,e )rei$,t. 7,e -l%ce o) 'eli+ery bein$ t,e -ort o) 'estin%tion0 o*ners,i- -%sses in t,e -ort o) 'estin%tion. E))ecti+ely t,e )rei$,t s,%ll be s,oul'ere' by t,e buyer0 but t,%t %mount *ill be t%8en to t,e -rice )i2e' by t,e seller. In %not,er c%se0 t,e -%rties %$ree' in %n :O; %rr%n$ement0 but it *%s sti-ul%te' in t,e contr%ct t,%t t,e seller c%n 'em%n' t,e -%yment o) t,e -rice by -resentin$ t,e bill o) l%'in$ to t,e buyer. 7,e bill o) l%'in$ c%n be -resente' %t t,e -ort o) ori$in to t,e buyer bec%use % bill o) l%'in$ c%n be t%8en )rom t,e common c%rrier %t t,e -ort o) ori$in. Des-ite o) %n :O; %rr%n$e0 t,e -l%ce o) 'eli+ery is t,e -ort o) ori$in. :O; -ort o) 'estin%tion is %rr%n$e' in t,is c%se bec%use t,e buyer *oul' *%nt to ,%+e t,e seller to s,oul'er %ll t,e e2-enses )or t,e tr%ns-ort%tion o) t,e $oo's u- to t,e -ort o) 'estin%tion. Obli$%tions o) t,e SellerC W%rr%nty &oes 6hilippine law adopt the common law principle of ca eat emptor (b"yer beware)$ As % rule0 1,ili--ine L%* 'oes not %'o-t t,e common l%* -rinci-le o) buyer be*%re bec%use o) t,e im-lie' *%rr%nties. E+en in t,e %bsence o) sti-ul%tion0 t,is *%rr%nties %re 'eeme' %tt%c,e' to t,e contr%ct0 %n' t,e buyer m%y ,ol' t,e seller li%ble )or bre%c, o) *%rr%nty. >o*e+er0 it is only % $ener%l rule. 7,ere %re inst%nces *,ere t,ere c%n be no im-lie' *%rr%nty. E2%m-les0 *,ere t,ere is no im-lie' *%rr%nties %re/

1l%ces )i2e' by us%$e or tr%'e I) t,ere is no sti-ul%tion %s to t,e -l%ce o) 'eli+ery0 t,e l%* -ro+i'es t,%t0 it *ill be t,e -l%ce )i2e' by t,e us%$e or tr%'e. S,i--in$ Arr%n$ementsC -l%ce o) 'eli+ery 1. :.O.;. (:ree On ;o%r'# Arr%n$ement (1oint o) Destin%tion# I) t,ere is no -l%ce sti-ul%te' %s to t,e -l%ce o) 'eli+ery %n' t,e $oo's %re to be s,i--e' on %n :O; b%sis0 t,e -l%ce o) 'eli+ery s,%ll be t,e -l%ce o*ners,i- is 'eeme' to -%ss. In %n :O; %rr%n$ement0 t,e -%rties s,oul' ,%+e %$ree' to % s-eci)ic -ort *,et,er it is t,e -ort o) ori$in or it coul' be t,e -ort o) 'estin%tion. In %n :O; -ort o) ori$in0 t,e -l%ce o) 'eli+ery s,%ll be consi'ere' to be t,e -ort o) ori$in. It *oul' be t,e -ort o) ori$in bec%use :O; me%n :ree On ;o%r'0 %n' :ree On ;o%r' me%ns t,%t t,e moment t,e $oo's %rri+e' %t t,e -ort o) ori$in0 t,e seller *ill be )ree )rom %ny e2-ense on tr%ns-ort%tion o) t,e $oo's to t,e buyer. :rom t,e -ort o) ori$in0 it *ill be t,e buyer *,o *ill s,oul'er t,e e2-enses )or t,e tr%ns-ort%tion. It *oul' %--e%r since t,e buyer *,o s,oul'er t,e e2-enses0 it is t,e buyer *,o is t,e o*ner o) t,e $oo's %s it re%c,e' t,e -ort o) ori$in. I) ,e is %lre%'y t,e o*ner un'er t,is :O; %rr%n$ement t,ere)ore0 t,e -l%ce o) 'eli+ery s,%ll be t,e -ort o) (%nil%. In :O; -ort o) 'estin%tion %rr%n$ement0 t,e seller *oul' ,%+e to s,oul'er t,e e2-enses )or t,e tr%ns-ort%tion o) t,e $oo's0 u-to %n' until t,e %rri+%l o) t,e $oo's %t t,e -ort o) 'estin%tion. >ence0 'eli+ery -%sses %t t,e -ort o) 'estin%tion. . C.I.:. (costs0 insur%nce0)rei$,t# Arr%n$ement (1oint o) Ori$in# In % CI: %rr%n$ement0 t,e -l%ce o) 'eli+ery is consi'ere' to be t,e -ort o) ori$in bec%use0 t,e -rice -%i' by t,e buyer *oul' %lre%'y inclu'e t,e costs0 insur%nce0 %n' )rei$,t. 7,e buyer -%ys )or t,e )rei$,t0 it %--e%rs t,ere)ore t,%t o*ners,i- -%sses %t t,e -ort o) ori$in0 ,ence0 'eli+ery is m%'e %t t,e -ort o) ori$in.

1. In s%le o) %nim%ls in )%ir (no *%rr%nty %$%inst ,i''en 'e)ects# (but *it, *%rr%nty %$%inst e+iction or title# . -ublic %uctions (no *%rr%nty %$%inst ,i''en 'e)ects# (but *it, *%rr%nty %$%inst e+iction or title# 4. %s is *,ere is s%les (no *%rr%nty %s to t,e )itness o) t,e t,in$0 but t,ere is still *%rr%nty %$%inst e+iction# 5. s%le o) secon' ,%n' items #hen wo"ld and affirmation of fact or promise of a endor be the basis in holding the seller liable for breach of an e,press warranty$ 7,e l%* re3uires t,%t %n %))irm%tion o) )%ct or -romise o) t,e seller must rel%te to t,e t,in$ itsel). In ot,er *or's0 it must rel%te to t,e c,%r%cter o) t,e t,in$0 or to t,e 3u%lity o) t,e t,in$0 or its title. Secon'ly0 it is re3uire' t,%t suc, %))irm%tion o) )%ct must ,%+e t,e n%tur%l ten'ency to in'uce % -erson to -urc,%se t,e t,in$C 7,ir'ly0 t,e buyer -urc,%se t,e t,in$ relyin$ on t,e %))irm%tion o) )%ct or -romise m%'e by t,e seller. 3f the seller told the b"yer that this is the best fertili>er in this world, wo"ld that be the basis in holding the seller liable if it wo"ld came o"t that there are other brands of fertili>er that are m"ch better than what was sold to this b"yer$ 7,%t c%nnot be t,e b%sis in ,ol'in$ t,e seller li%ble bec%use0 t,%t *ill be tre%te' merely %s %n o-inion. Unless suc, o-inion is m%'e by %n e2-ert0 suc, st%tement c%nnot be t,e b%sis in ,ol'in$ t,e seller li%ble un'er t,is e2-ress *%rr%nty. 3n a sale of a car, the seller told the b"yer that e en only with one liter of gasoline, yo" can dri e this car for 5+ )m. 3s this an e,press warranty$ 7,is is %n e2%m-le o) %n e2-ress *%rr%nty0 %n' )%ilure o) t,e c%r to consume $%s %t 18mJ6!8m m%y ,ol' t,e seller li%ble )or bre%c, o) ,is e2-ress *%rr%nty. &oes it mean that the word g"arantee is "sed, means there is an e,press warranty$ No. Suc, *or' i) it 'oes not $o into t,e c,%r%cter o) t,e t,in$0 t,e 3u%lity o) t,e t,in$ or its title0 suc, *oul' not -ert%in to %n e2-ress *%rr%nty. 3n &ecember 1K85, %al ador and the %tar %emi Cond"ctor Company, e,ec"ted a deed of conditional sale wherein the former agreed to sell his *+++ s!. m. lot in Cainta, (i>al to the latter for the price of 1million, payable 1++,+++ down. 1he balance 0+ days after the s!"atters in the property ha e been remo ed. 3f the s!"atters ha e not been remo ed after 0 mos., the

1++,+++ down payment shall be ret"rned by the endor to the endee. %al ador filed e-ectment s"its against the s!"atters b"t despite of the decision of the Co"rt in his fa or, the s!"atters wo"ld still wo"ld not lea e. 3n A"g"st 1K80, %al ador offered to ret"rn the 1++,+++ down to the endee on the gro"nd that he was "nable to remo e the s!"atters to the property. %%C ref"sed to accept the money and demanded that %al ador e,ec"te a deed of absol"te sale of its property in its fa or, in which time it will pay the balance of its price. 1he al"e of the land had do"bled at that time, %al ador consigned the 1++) in co"rt and filed an action for rescission of the deed of conditional sale, pl"s damages. #ill the action prosper$ Un'er t,e )%cts0 S%l+%'or is not %n %$$rie+e' -%rty0 ,ence ,e *ill not ,%+e %ny reme'y un'er t,e l%*. In )%ct0 ,e *%s t,e one *,o )%ile' to e+ict t,e s3u%tters. 7,e -%yment o) t,e b%l%nce %s %$ree' u-on is m%'e to 'e-en' u-on t,e remo+%l o) t,e s3u%tters *it,in 9 mos. Cle%rly0 i) not0 im-lie'ly )rom t,e )%cts0 t,%t is %n obli$%tion o) t,e seller0 %n' suc, is t,e con'ition )or t,e -%yment. Since suc, con'ition 'i' not ,%--en0 *,erein t,e s3u%tters )%ile' to )lee0 *oul' suc, con'ition )or t,e -%yment o) t,e b%l%nce *oul' not %rise. Un'er Art. 16560 it is t,e buyer *,o is $i+en o-tions un'er t,e l%*0 'ue to t,e non ,%--enin$ o) t,e con'itions 'ue to t,e )%ult o) t,e seller. 7,e o-tions o) t,e seller %re/ 1# Not to -rocee' *it, t,e s%le bec%use t,e con'ition 'i' not ,%--enC # W%i+e t,e ,%--enin$ o) t,e con'ition %n' -rocee' *it, t,e s%le. In t,is c%se t,e secon' o-tion *%s c,osen by t,e buyer. 4# 7re%t t,e non ,%--enin$ o) t,e con'ition %s % bre%c, o) *%rr%nty0 *,ic, c%n be t,e b%sis o) ,ol'in$ t,e seller li%ble )or '%m%$es. Im-lie' W%rr%nties 1. W%rr%nty %$%inst e+iction . W%rr%nty %$%inst ,i''en 'e)ects 4. W%rr%nty o) 3u%lity (W%rr%nty o) )itness )or % -%rticul%r -ur-ose# 3s warranty against hidden defects incl"de warranty of fitness for a partic"lar p"rpose$ No bec%use0 in %n im-lie' *%rr%nty o) )itness )or % -%rticul%r -ur-ose0 t,e t,in$ m%y not ,%+e %ny ,i''en 'e)ect. As to 1 million buyers t,ey *ill be )ine0 but0 %s to 1 -erson %s to ,im0 it m%y not be )it )or ,is -ur-ose. 1. W%rr%nty %$%inst e+iction #hat is incl"ded in warranty against e iction$ 1. 7,%t t,e seller ,%s t,e ri$,t to sell %t t,e time o*ners,iis to -%ssC %n' . t,%t t,e buyer *ill ,%+e %n' en.oy t,e le$%l %n' -e%ce)ul -ossession.

'ay the b"yer hold the seller liable for breach of warranty against e iction if the b"yer was depri ed of en-oyment and peacef"l possession, e en if he was not depri ed of ownership$ Fes. ;ec%use t,ere c%n be % .u'$ment in )%+or o) % t,ir' -erson *,o *oul' ,%+e t,e ri$,t to t,e -ossession o) t,e t,in$ but ,e is not t,e o*ner. One suc, -erson is % lessee. Once t,e court consi'er % le%se contr%ct %s % +%li' %n' bin'in$ le%se0 e+en %s %$%inst t,e buyer0 t,e buyer c%n be 'e-ri+e' o) t,e -ossession but ,e is not 'e-ri+e' o) o*ners,i-. 7,us0 t,is coul' be % bre%c, o) *%rr%nty %$%inst e+iction bec%use t,en0 ,e *oul' *%rr%nt t,%t t,e buyer *oul' ,%+e % le$%l %n' -e%ce)ul -ossession o) t,e t,in$. #hat re!"isites pro ided by law in order to hold the seller liable for breach of warranty against e iction by the b"yer$ 1. 7,ere must be % )in%l .u'$ment 'e-ri+in$ t,e buyer o) t,e t,in$ in *,ole or in -%rtC . 7,e seller must be noti)ie' (or summone' or consi'ere' %s -%rty 'e)en'%nt# 4. 7,e re%son *,y t,e buyer *%s 'e-ri+e' o) t,e t,in$ must be b%se' on % ri$,t o) % t,ir' -erson e2istin$ e+en -rior to t,e s%le or e+en i) suc, ri$,t o) t,e t,ir' -erson %)ter suc, s%le t,%t must be b%e' on %ct im-ut%ble to t,e +en'or. #ill a mere letter of a third person claiming a right o er a property, which letter was recei ed by the b"yer, can the b"yer hold the seller liable$ O) course not. 7,e l%* re3uires t,%t t,ere must be )in%l .u'$ment 'e-ri+in$ t,e buyer o) t,e t,in$ in *,ole or in -%rt. 3n case there is a -"dgment, and s"ch -"dgment was in fa or of a third person against the b"yer, is it re!"ired for the b"yer to appeal in order to hold the seller liable$ No suc, %--e%l is re3uire' on t,e -%rt o) t,e buyer. ;ut i) t,e seller 'oes not *%nt to be li%ble0 t,en ,e s,oul' %--e%l. A scenario where the b"yer was depri ed of the thing based on a right of a third person e,isting e en prior to the sale$ One e2%m-le is in 'ouble s%les *,ere t,e secon' buyer *%s 'e-ri+e' o) % t,in$ bec%use o) % ri$,t o) % )irst buyer0 ,%+in$ t,e t,in$ )irst re$istere' in ,is n%me in $oo' )%it,. A scenario where a b"yer was depri ed of a thing after the sale which is imp"table to the endor$

In 'ouble s%les *,ere t,e )irst buyer *%s 'e-ri+e' o) t,e t,in$ bec%use o) % ri$,t o) % secon' buyer *,ic, is im-ut%ble to t,e +en'or0 suc, *,en t,e buyer *%s 'e-ri+e' i) suc, t,in$ bec%use o) %n e2ecution s%le 'ue to )%ilure o) t,e seller to -%y re%l -ro-erty t%2 i) t,e t%2 %ccrue' be)ore t,e s%le. 3f the b"yer was depri ed of the thing based on the -"dgment of the co"rt that a third person ac!"ired the property by ac!"isiti e prescription, can the seller be held liable for breach of warranty against e iction$ It 'e-en's on *,et,er t,e -rescribe -erio' ,%' %lre%'y been com-lete' %t t,e time o) t,e s%le or not. :or e2%m-le0 i) t,is is b%se' on t,e 1! ye%r %c3uisiti+e -rescri-tion *it, color o) title0 i) t,e occu-%nt in *,ose )%+or t,e court 'eci'e' *,o %c3uire' t,e -ro-erty resultin$ in t,e 'e-ri+%tion o) t,e buyer o) suc, -ro-erty *%s %lre%'y in -ossession )or < ye%rs %t t,e time o) t,e s%le0 but t,e buyer ne+er e+en bot,ere' to e2%mine t,e -%rcel o) l%n'. W,en ,e %rri+e' %)ter 1 ye%rs t,ere is % .u'$ment in )%+or o) t,e occu-%nt bec%use t,e occu-%nt *%s %ble to com-lete t,e 1! ye%r -erio' -rescribe by l%* *it,out interru-tion. >ere0 t,e buyer c%nnot ,ol' t,e seller li%ble. 7,is is no lon$er t,e )%ult o) t,e seller *,en t,e occu-%nt *%s %ble to com-lete t,e -erio'. I) t,e buyer only *rote % letter 'em%n'in$ t,e occu-%nt to +%c%te t,e -remises t,%t *oul' ,%+e interru-te' t,e runnin$ o) t,e -rescri-ti+e -erio'. It is t,e )%ult o) t,e buyer *,y ,e is 'e-ri+e' o) t,is l%n'. 3f the seller wo"ld be liable "nder this warranty against e iction, what are the possible liabilities of the seller$ Un'er t,e l%*0 +%lue o) t,e t,in$ %t t,e time o) e+iction not t,e -rice0 inclu'in$ t,e )ruits0 costs0 income %n' e2-enses %n' '%m%$es %n' interest. A -erson c%n only be ,el' li%ble )or '%m%$es i) ,e is in b%' )%it,. A seller m%y be ,el' li%ble )or '%m%$es in rel%tion to t,is *%rr%nty %$%inst e+iction i) ,e *%s in b%' )%it,. #hen wo"ld the seller be considered to be in bad faith$ 3f the seller )new of the defect of his title at the time of the sale, therefore he is a seller in bad faith$ Not necess%rily0 ,e m%y ,%+e 8no*n o) t,e 'e)ect in ,is title0 but ,e ,%' in)orme' t,e buyer. E+en i) ,e 8ne* o) t,e 'e)ect in ,is title %n' ,e 'i' not in)orm t,e buyer o) suc, 'e)ect0 ,e nee' not be in b%' )%it, bec%use -rob%bly t,e buyer *%s %lre%'y %*%re o) t,e 'e)ect o) ,is title. 3f the seller e,ec"ted a wai er e en in case of e iction, where s"ch b"yer agree that he will not hold the seller liable for the depri ation of s"ch thing, can the seller be held liable$ Fes0 i) t,e seller is in b%' )%it,0 bec%use un'er t,e l%*0 suc, *%i+er is +oi'0 %n' t,ere)ore t,e seller c%n be ,el' li%ble.

3f the b"yer e,ec"ted a wai er, and the seller acted in good faith, may the seller be held liable$ Fes0 t,e seller m%y be ,el' li%ble *,en t,e *%i+er is 8no*n %s *%i+er consciente. It is % *%i+er consciente *,en t,e buyer e2ecute' % *%i+er not 8no*in$ t,e 'e)ect o) t,e title o) t,e seller0 %t t,e s%me time t,e seller 'oes not li8e*ise 8ne* o) suc, 'e)ect. 7,e seller is li%ble )or only t,e +%lue o) t,e t,in$ %t t,e time o) e+iction0 e2clu'in$ t,e ot,er li%bilities. I) t,e *%i+er is %n intencion%'% *%i+er0 *it, )ull 8no*le'$e o) t,e -ossibility o) e+iction. In ot,er *or's0 ,e 8no*s t,e 'e)ect in t,e title o) t,e seller *,en ,e bou$,t %n' *,en ,e e2ecute' t,e *%i+er. O) course t,e buyer c%n no lon$er ,ol' t,e seller li%ble )or bre%c, o) *%rr%nty %$%inst e+iction. 3f there is no wai er, and the b"yer was depri ed, will the seller be held liable$ O)0 course0 t,e only 'i))erence is t,e e2tent o) t,e li%bility o) t,e seller *,et,er ,e is in $oo' )%it, or b%' )%it,. I) seller is in b%' )%it,0 ,e *ill be e+en li%ble )or '%m%$es in c%se o) e+iction. W%rr%nty %$%inst ,i''en )%ults or 'e)ects #hat are the re!"irements in order for the seller to be held liable for breach of warranty against hidden defects$ 1. 7,e 'e)ect must be ,i''en %n' not -%tent. . 7,e 'e)ect must ,%+e %lre%'y e2iste' %t t,e time o) t,e s%le. 3f the b"yer disco ered the defect on the thing bo"ght 1+ days after the sale, the seller will be liable for breach of warranty against hidden defects$ Not necess%rily bec%use t,e 'e)ect m%y be -%tent0 ,ence t,e seller c%nnot be ,el' li%ble. Secon'ly0 t,e 'e)ect m%y e2ist %t t,e time %)ter t,e s%le0 t,ere)ore t,e seller c%nnot be ,el' li%ble )or bre%c, o) *%rr%nty %$%inst ,i''en 'e)ects. 3n case the seller is held liable for breach of warranty against hidden defects, what are the possible liability of the seller$ 1. I) t,e t,in$ *%s lost or 'estroye' 'ue to % )ortuitous e+ent or it *%s lost or 'estroye' 'ue to t,e )%ult o) t,e buyer0 m%y t,e seller still be ,el' li%ble= Fes t,e seller *ill still be ,el' li%ble bec%use t,e t,in$ ,%' ,i''en 'e)ects. I) t,e c%use o) t,e loss *%s 'ue to t,e )%ult o) t,e buyer or to % )ortuitous e+ent0 t,e li%bility o) t,e seller is to return t,e -rice less +%lue %t t,e time o) t,e loss *,et,er t,e seller is on $oo' )%it, or b%' )%it,.

D%m%$es *ill only be $r%nte' i) t,e seller is in b%' )%it,. >e is in b%' )%it, *,en t,e seller 'i' not in)orm t,e buyer o) t,e 'e)ect. . I) t,e t,in$ *%s lost 'ue to t,e 'e)ect itsel) 7,e li%bility *ill be $re%ter i) t,e c%use o) t,e loss *%s 'ue to t,e 'e)ect itsel)0 t,%n *,en t,e c%use o) t,e loss *%s 'ue to t,e )%ult o) t,e buyer or to % )ortuitous e+ent. In c%se o) 'e)ect t,e seller ,%s to return t,e -rice in $oo' )%it, or in b%' )%it,. D%m%$es *ill only be $r%nte' i) t,e seller is in b%' )%it,. >e is in b%' )%it, *,en t,e seller 'i' not in)orm t,e buyer o) t,e 'e)ect. Note/ D%m%$es %n' interest c%nnot concur in c%se o) loss 'ue to t,e 'e)ect. W,en t,e seller is in b%' )%it, (+en'or *%s %*%re o) t,e 'e)ect# '%m%$es is $r%nte'0 i) in $oo' )%it, (+en'or *%s not %*%re o) t,e 'e)ect# interest s,%ll be $r%nte'. In *%rr%nty %$%inst e+iction0 interest %n' '%m%$es concur. 3f the thing was lost or destroyed d"e to a fort"ito"s e ent, fa"lt of the endee, or d"e to the defect itself, how can the b"yer pro e that the thing had hidden defects, when the thing was lost$ It is % m%tter o) -roo). 7,e buyer mi$,t ,%+e %llo*e' %n e2-ert to e2%mine t,e t,in$ be)ore t,e loss o) t,e t,in$. >e ,%s % -roo) o) t,e 'e)ect o) t,e t,in$ be)ore its loss. 2 en if the thing with hidden defects was lost or destroyed, is it possible that the seller will not be liable for a single centa o, e en witho"t a wai er$ W,en t,e loss *%s 'ue to % )ortuitous e+ent or )%ult o) t,e +en'ee0 %n' t,e +en'or *%s not %*%re o) t,e 'e)ect. In t,is scen%rio t,e li%bility o) t,e seller is only to return t,e -rice less +%lue. ;ut *,en t,e +%lue is $re%ter t,%n t,e -rice0 t,e seller *oul' no lon$er return t,e -rice less +%lue ,ence no li%bility. 7,e +%lue m%y be $re%ter t,%n t,e -rice *,en t,e seller sol' t,e t,in$ less t,%n its +%lue or t,e t,in$ *%s sol' %t its +%lue but t,ere *%s %--reci%tion o) t,e +%lue. Lesion 'oes not %))ect t,e +%li'ity o) t,e s%le. Inclu'e' in t,is *%rr%nt %$%inst ,i''en 'e)ects0 *oul' -ert%in to %ny c,%r$e or non-%--%rent encumbr%nce not 'ecl%re' or 8no*n to t,e buyer. 1. In rel%tion to % s%le o) % -%rcel o) l%n'0 %n' suc, is sub.ect to % ri$,t o) *%y0 *ill t,e seller be li%ble in rel%tion to bre%c, o) *%rr%nty= Not necess%rily. (%ybe it *%s 8no*n to t,e buyer or it *%s 'ecl%re' to t,e buyer. E+en i) it is not 'ecl%re' %n' not 8no*n to t,e buyer but t,e encumbr%nce is

%--%rent0 ,ence t,e seller c%nnot be ,el' li%ble )or bre%c, o) *%rr%nty. E+en i) not 8no*n or *%s 'ecl%re' to t,e buyer or t,e encumbr%nce is non %--%rent0 t,e seller m%y be li%ble *,en t,e encumbr%nce is re$istere'. 1he sale of a parcel of land was entered into Gan"ary *, *++K. 1he b"yer filed an action for breach of warranty against hidden defects pertaining to any charge or non apparent enc"mbrance "n)nown to the b"yer, beca"se of a right of way only last friday, will the action prosper$ It 'e-en's on *,%t 8in' o) %ction. I) t,e %ction is %n %ction )or rescission0 it *ill not -ros-er bec%use t,e l%* re3uires t,%t t,e %ction )or rescission s,oul' be )ile' *it,in 1 ye%r )rom t,e '%te o) t,e contr%ct. It is more t,%n 1 ye%r. I) t,is is %n %ction )or '%m%$es0 it (AF -ros-er 'e-en'in$ on *,en t,e buyer 'isco+ere' t,e encumbr%nce. 7,e l%* re3uires t,%t %n %ction )or '%m%$es m%y be )ile' *it,in 1 ye%r )rom 'isco+ery o) t,e encumbr%nce. W,en it is *it,in suc, -erio'0 t,en t,e %ction *ill -ros-er. S%le o) Anim%ls *it, 'e)ects or 'ise%ses (re',ibitory 'e)ects# A re',ibitory 'e)ect c%nnot be 'isco+ere' 'es-ite %n e2%min%tion by %n e2-ert. 3f a b"yer bo"ght L dogs and one of them t"rned o"t to ha e a redhibitory defect, will an action for redhibition be a remedy not only as to the animal with the defect b"t also as to the other animals$ As % rule0 no. Re',ibition *oul' only -ert%in to 'e)ecti+e %nim%ls0 unless t,e buyer c%n -ro+e t,%t ,e *oul' not ,%+e bou$,t t,e ot,ers ,%' ,e 8no*n o) t,e 'e)ect o) one. 7,e bur'en o) -roo) in -ro+in$ t,%t t,e buyer *oul' not ,%+e bou$,t t,e 'o$s ,%' ,e 8no*n o) t,e 'e)ect o) one is t,e buyer0 but un'er cert%in circumst%nces t,e l%* *oul' -resume t,%t t,e buyer *oul' not ,%+e bou$,t t,e ot,ers ,%' ,e 8no*n o) t,e 'e)ect o) one. 7,is *oul' ,%--en *,en ,e bou$,t t,e %nim%ls in -%irs0 %s % te%m or %s % $rou-. 3f the animal bo"ght died 5 days after the sale, can the b"yer still demand for the ret"rn of the price$ 7,e seller c%n no lon$er be ,el' li%ble )or bre%c, o) *%rr%nty bec%use t,e l%* re3uires t,%t t,e %nim%l s,oul' 'ie *it,in 4 '%ys. 7,e 'ise%se must be e2istin$ %t t,e time o) s%le. 7,e seller c%n ,o*e+er0 be obli$e' to return i) t,e 'e%t, %lt,ou$, it ,%--ene' more t,%n 4 '%ys %)ter t,e s%le0 *%s c%use' by % cont%$ious 'ise%se. Un'er t,e l%*0 t,is contr%ct is +oi'0 ,ence t,e seller c%n be com-elle' to return t,e -rice -%i' by t,e buyer.

Are there no implied warranties in -"dicial sales$ :%lse. 7,ere c%n be im-lie' *%rr%nties in .u'ici%l s%les. 1. 7,ere seems to be % -ro+ision *,ere cert%in -ersons suc, %s mort$%$ees0 -le'$ees0 %uctioneers0 %n' s,eri))s0 c%nnot be ,el' li%ble )or bre%c, o) *%rr%nty. Since % s,eri)) is t,e seller in % .u'ici%l s%le0 %n' un'er t,e l%* ,e c%nnot be ,el' li%ble0 it is conclu'e' t,%t t,ere %re no im-lie' *%rr%nties in .u'ici%l s%le. Suc, +ie* is incorrect0 it 'oes not )ollo* t,%t t,e s,eri)) c%nnot be ,el' li%ble. It 'oes not me%n t,%t *,en t,e s,eri)) c%nnot be ,el' li%ble0 it 'oes not )ollo* t,%t no one c%n be ,el' li%ble. 7,e .u'$ment 'ebtor c%n be ,el' li%ble0 unless t,e contr%ry *%s 'ecree' in t,e .u'$ment. . In .u'ici%l s%le0 norm%lly t,ese %re secon' ,%n' items0 ,ence0 t,ere is no *%rr%nty %s to ,i''en 'e)ects= :%lse0 bec%use t,e s,eri)) c%n le+y br%n' ne* -ro-erties0 suc, *,en t,e seller *%s in t,e business o) sellin$ br%n' ne* items. In t,is l%tter c%se0 t,e .u'$ment 'ebtor m%y be ,el' li%ble )or bre%c, o) *%rr%nty %$%inst ,i''en 'e)ects. Un'er Art. 16<!0 t,e l%* -ro+i'es %s to t,e rules in+ol+in$ *%rr%nty %$%inst ,i''en 'e)ects t,ey *ere m%'e e2-ressly %--lic%ble to .u'ici%l s%les. Ri$,ts %n' obli$%tions o) t,e +en'ee #hat are the rights of the endee$ 1. Ri$,t to t,e :ruits By means of a p"blic instr"ment, 'r. Bagbibili sold his mango plantation to Abentorero effecti e immediately. 1he parties agreed that the deli ery will be effected 0 mos. from e,ec"tion of the deed of sale. #hen the said period arri ed Abent"rero demanded the thing, b"t Bagbibili dili dallied. 3t was only a month afterwards when Bagbibili finally deli ered the land to Abent"rero. 3n the three wee)s before deli ery, Bagbibili sold and deli er the entire prod"ce of the 'ango plantation to 'r. Commerciante. 'r. Commerciante )nown nothing of the contract between Bagbibili and Abent"rero. Abent"rero now see)s to reco er from Commerciante either the f"ll al"e of the mangoes or a similar amo"nt and !"ality of the mangoes sold. &oes abent"rero ha e the right to the fr"its against Commerciante$ Un'er t,e l%* -%rticul%rly Art. 169<0 t,e buyer s,%ll ,%+e t,e ri$,t to t,e )ruits o) t,e t,in$ )rom t,e time o) t,e -er)ection o) t,e s%le. In rel%tion to Art. 11950 t,e cre'itor s,%ll be entitle' to t,e )ruits o) t,e t,in$ )rom t,e time t,e obli$%tion to 'eli+er it %rises. In t,eir %$reement t,e obli$%tion to 'eli+er *ill %rise only %)ter 9 mos. t,ere)ore t,e buyer *ill not be entitle' to t,e )ruits 'urin$ t,e 9 mo. -erio'. 7,ou$, un'er t,e )%cts0 Abenturero %lre%'y ,%' t,e ri$,t to t,e )ruits0 Abenturero 'oes not ,%+e t,e ri$,t to reco+er %$%inst Commerci%nte bec%use un'er Art. 11950 ,e *ill not ,%+e %ny re%l ri$,t

o+er t,e t,in$ until t,e %ctu%l 'eli+ery o) t,e t,in$ to ,im. 7,e only reme'y o) Abenturero is only %$%inst N%$bibili since0 Commerci%nte ,%' no 8no*le'$e o) suc, s%le bet*een N%$bibili %n' Abenturero. #hat if d"ring the 0 month period, Bagbibili har ested the fr"its and sold it to Commerciante, can Abent"ero reco er these fr"its or the al"e thereof$ Abenturero 'oes not ,%+e t,e ri$,t to t,e )ruits bec%use Abenturero s,%ll only ,%+e t,e ri$,t to t,e )ruits o) t,e t,in$ )rom t,e time t,e obli$%tion to 'eli+er it %rises. Un'er t,e )%cts0 it *%s ,%r+este' be)ore t,e 9 mont, -erio' %n' 'urin$ suc, time N%$bibili is un'er no obli$%tion to 'eli+er t,e )ruits.

sometimes the employees of the seller will lea e the place immediately. After 1 ho"r the b"yer called the seller informing him that he is re-ecting the goods, and told the seller to obtain the goods in the place of the b"yer. B"t before the seller co"ld obtain the goods from the b"yer8s place, all the goods were destroyed. Can the b"yer be held liable for the price of these goods$ It 'e-en's on t,e re%son )or t,e re)us%l to %cce-t. I) t,ere is no .ust c%use )or t,e re)us%l0 un'er t,e l%* o*ners,i- is 'eeme' to -%ss to t,e buyer0 ,ence0 t,e o*ner be%rs t,e loss. As suc,0 ,e c%n be com-elle' to -%y t,e -rice. I) t,ere is % $oo' %n' +%li' re%son0 -rob%bly t,e $oo's *ere 'e)ecti+e0 suc, t,%t ,e ,%' to re.ect t,e $oo's0 t,e l%* e2-ressly -ro+i'es t,%t o*ners,i- *ill not -%ss to ,im %n' ,e c%nnot be com-elle' to -%y t,e -rice. 6"rs"ant to a sale, the seller deli ered the rice field * years ago, b"t the payment was only made today. Can the seller demand to pay interest on the price$ Or'in%rily0 t,e buyer c%nnot be ,el' li%ble )or t,e interest on t,e -rice. Unless t,ere is %n e2-ress sti-ul%tion to t,e contr%ry0 interest c%nnot be 'em%n'e'. As %n e2ce-tion0 t,e seller c%n +%li'ly 'em%n' interest only i) t,ere *%s suc, % sti-ul%tion to -%y interest. E+en i) t,ere is no suc, sti-ul%tion to -%y interest0 t,e buyer m%y be ,el' li%ble to -%y interest i) t,e t,in$ is )ruit be%rin$. Un'er t,e )%cts0 t,e l%n' sol' is % rice )iel'0 ,ence0 it is )ruit be%rin$. An' %s suc,0 t,e buyer c%n be com-elle' to -%y interest on t,e -rice. E+en i) t,ere is no sti-ul%tion %n' e+en i) t,e t,in$ is not )ruit be%rin$0 ,e m%y be ,el' li%ble )or interest in t,e -rice bec%use t,e buyer is %lre%'y in 'el%y %)ter .u'ici%l or e2tr%.u'ici%l 'em%n' is m%'e by t,e seller. It must be noted, under $$"!, there is no need for demand, when one of the parties had complied with his obligation, delay by the other begins. %nder this scenario this presupposes that there is a period within which to pay and the period had already prescribed, and in such case there has to be a &udicial or e'tra&udicial demand.

. Ri$,t o) e2%min%tion 3f the goods were deli ered by the seller to the place of b"siness of the b"yer, and the goods were recei ed by the b"yer, does it mean that ownership already passed "pon receipt of the goods$ Not necess%rily. Recei+in$ is 'i))erent )rom %cce-tin$. In or'er t,%t o*ners,i- is to -%ss0 t,e l%* re3uires t,%t t,e buyer must ,%+e %cce-te' t,e $oo's. Recei+in$ is only -relimin%ry to %cce-tin$0 in )%ct recei+in$ is necess%ry )or ,im to e2ercise % ri$,t *,ic, is t,e ri$,t o) e2%min%tion or ins-ection be)ore ,e %cce-ts. As to *,en ,e *ill be 'eeme' to ,%+e %cce-te'0 *,en ,e intim%tes ,is %cce-t%nce to t,e seller or *,en ,e 'i' %n %ct inconsistent *it, t,e o*ners,i- o) t,e seller0 %)ter t,e l%-se o) % re%son%ble time. 3s it possible that the endee "pon recei ing, he already accepted$ Fes0 *,en t,e +en'ee ,%' *%i+e' t,e ri$,t o) e2%min%tion by e2-ress sti-ul%tion0 or by cert%in %rr%n$ements t,%t m%y be %$ree' u-on by t,e -%rties *,erein t,ere *ill be no ri$,t o) e2%min%tion -relimin%ry to %cce-t%nce. E.$. In s%le o) co%l )rom t,e loc%tion o) t,e site o) t,e minin$ com-%ny0 it *ill be 'eli+ere' to C%l%c% -l%nt in ;%t%n$%s0 *,en t,e co%l *%s recei+e' by N%-ocor0 it is 'eeme' %cce-te'. 7,ere *ill be no e2%min%tion -relimin%ry to %cce-t%nce. >o*e+er0 t,ere *ill be %n e2%min%tion %)ter recei+in$ not )or t,e -ur-ose o) 'eterminin$ *,et,er it *ill be %cce-te' or not0 but t,e -ur-ose *ill only be )or t,e )i2in$ o) t,e -rice0 %n' %scert%in t,e 3u%lity o) t,e co%l. Are C4& sales ha e right of e,amination$ None bec%use u-on 'eli+ery0 t,e buyer -%ys0 %n' t,e buyer is 'eeme' to ,%+e %cce-te'. 3f the goods were deli ered to the place of b"siness of the b"yer which goods were recei ed by the b"yer b"t

4. (%ce'% L%* RA 966 - Ri$,t o) t,e +en'ee 7,e Re%lty Inst%llment ;uyer Act - 7,is l%* is inten'e' to -rotect or'in%ry buyers. 7,is l%* c%n only be in+o8e' *,en t,e ob.ect o) t,e s%le is % re%lty. Cle%rly0 t,is c%nnot be in+o8e' i) t,e ob.ect o) t,e s%le is % -erson%l -ro-erty or % mo+%ble -ro-erty. 3f it is an immo able property, is it co ered by the 'aceda Daw$

Not necess%rily. W,%t is co+ere' by t,e (%ce'% L%* %re re%lties. Not e+ery immo+%ble is co+ere' by t,e (%ce'% L%*. 3f it is a realty is it co ered by the 'aceda Daw$ Not necess%rily. It must be % resi'enti%l re%lty0 %n' not commerci%l or in'ustri%l re%lty. A sale on installment is a sale on credit$ 3f a sale on installment is a sale on credit, a sale on credit is co ered by the 'aceda Daw$ A s%le on inst%llment is % s%le on cre'it0 but % s%le on cre'it nee' not necess%rily me%n it is co+ere' by t,e (%ce'% L%*0 bec%use % s%le on cre'it nee' not be on inst%llment b%sis. A s%le o) % con'ominium unit *,ere 1J4 o) t,e -rice *ill be -%i' u-on si$nin$ o) t,e contr%ct0 but t,e b%l%nce *ill be -%i' *it,in % ye%r. Suc, is not co+ere' by t,e (%ce'% L%* bec%use t,%t is not % s%le on inst%llment b%sis. 7,is is % s%le on cre'it on % str%i$,t term b%sis.

6riscilla p"rchased a condomini"m "nit in 'a)ati City from the Cityland Corporation for a price of 1+ million payable E million down and the balance thereon shall be paid in 0+ e!"al monthly installments. 1hey e,ec"ted a deed of conditional sale in which it is stip"lated that sho"ld the endee fail to pay E s"ccessi e monthly installments, the sale shall be deemed a"tomatically rescinded witho"t the necessity of -"dicial action and the act"al payments made by the endee shall be forfeited in fa or of the endor by way of rental for the "se and occ"pancy of the "nit and li!"idated damages. 7or 40 months 6riscilla paid monthly installments religio"sly, b"t on the 4Lth and 48th month she failed to pay. 4n the 4Kth month she tried to pay the installment d"e, b"t the endor ref"sed to recei e the payments tendered by her. 1he following month the endor sent her a notice that he was rescinding the deed of conditional sale p"rs"ant to the stip"lation of a"tomatic rescission and demanded that she acate the premises. %he replied that the contract cannot be rescinded witho"t -"dicial demand or notarial act p"rs"ant to Art. 15K* of the Ci il Code. Can the endor rescind the contract$ No0 bec%use t,e ob.ect o) s%le is % resi'enti%l unit %n' un'er t,e (%ce'% L%*0 t,ere %re t*o sti-ul%tions t,%t %re 'ecl%re' +oi' by t,is l%*. One o) t,e sti-ul%tion is t,e sti-ul%tion -ro+i'in$ )or t,e %utom%tic rescission o) t,e contr%ct. Anot,er +oi' sti-ul%tion un'er t,e (%ce'% L%* is 8no*n %s t,e )or)eiture cl%use. In ot,er *or's0 t,e buyer is entitle' to t,e C%s, Surren'er V%lue e+en i) t,ere is % )or)eiture cl%use. Suc, cl%use is % +oi' cl%use un'er t,e (%ce'% L%*. 7,e +en'or c%nnot rescin' bec%use un'er t,is (%ce'% L%*0 t,e buyer ,%' %lre%'y -%i' )or %t le%st t*o ye%rs. 7,e buyer is entitle' to % $r%ce -erio' *,ic, is 1 mont, )or e+ery ye%r. Un'er t,e )%cts 1riscill% ,%' %lre%'y -%i' )or 59 mont,s0 %n' t,us ,%+in$ com-lete' -%yin$ 4 ye%rs s,e is entitle' to % 4 mont,s $r%ce -erio' e3ui+%lent to "! '%ys. On t,e 5"t, inst%llment o))ere' to -%y0 s,e '%)%ulte' on t,e 5<t, %n' 5Et, mont, ,ence0 t,ere is 9! '%ys *it,in *,ic, s,e 'i' not -%y *,ic, *%s *ell *it,in t,e "! '%y $r%ce -erio'. >%' s,e not o))ere' to -%y on t,e 5"t, mont,0 rescission m%y be % reme'y on t,e -%rt o) t,e seller. >ence0 rescission c%nnot be % reme'y on t,e -%rt o) t,e seller. I) rescission is % reme'y0 t,e seller is obli$e' to return t,e c%s, surren'er +%lue to t,e buyer. 7,ere c%n be no +%li' rescission *it,out t,e return o) t,is c%s, surren'er +%lue. 3f the price is to be paid in 15 years and b"yer failed to pay on the 5th month of the first year, how long is the grace period$ /e has a grace period of 0+ days. 1hereafter he was able to pay the 5th, 0th, Lth, and in fact he was able to pay installments "p to the 5th year. 4n the 5th month of the 5th year, he defa"lted again. /ow long is the grace period$

3n a sale on installment payable in *+ years or E+ years, a b"yer was able to religio"sly pay his monthly ammorti>ation for 1+ years, what if on the 11th year the b"yer for one reason or another, he was no longer able to pay. #hat will be the effect$ 3s the maceda law be in o)ed if the b"yer was able to pay installments for at least two years$ :%lse. E+en i) t,e buyer *%s not %ble to -%y inst%llments )or % )ull t*o ye%rs0 t,e buyer c%n ,%+e ri$,ts un'er t,e l%*. I) ,e %lre%'y -%i' )or t*o ye%rs0 ,e *oul' ,%+e better ri$,ts. #hat are the rights of the b"yer if he only paid for less than * years$ >e is $i+en % minimum o) 9! '%y $r%ce -erio' *,ic, c%n be incre%se' %t t,e o-tion o) t,e seller but no less t,%n 9!. In t,is $r%ce -erio'0 t,e ri$,ts o) t,e buyer %re/ 1# >e c%n u-'%te ,is %ccounts # 1%y t,e %rre%rs *it,out bein$ ,el' li%ble )or -en%lties0 surc,%r$es0 interests0 ,e c%n -%y t,e entire b%l%nce 'urin$ t,is $r%ce -erio'. 4# Sell ,is interest un'er t,is contr%ct 5#Assi$n ,is interest or ri$,ts un'er t,is contr%ct. 3f the b"yer was able to pay installments for at least two years, what are the rights of the b"yer$ 7,e buyer *ill be entitle' to % -ortion o) t,e %mounts -%i'0 8no*n %s t,e C%s, Surren'er V%lue in % minimum o) 6!G )or ye%rs o) %ll -%yments m%'e. A)ter %not,er 6 ye%rs or i) ,e -%i' )or % tot%l o) < ye%rs0 entitle' to %not,er 6G *,ic, me%ns 66G0 %n' e+ery ye%r t,ere%)ter0 %''ition%l 6G0 but not to e2cee' "!G.

None. Un'er t,is l%*0 t,e buyer c%n only %+%il o) t,e $r%ce -erio' once in e+ery 6 ye%rs o) inst%llments. Reme'ies #hat are the remedies of the "npaid seller$ 1. . 4. 5. 6. 9. <. 1ossessory Lien Ri$,t o) Sto--%$e in 7r%nsitu Ri$,t to Rescin' Ri$,t o) Res%le D%m%$es S-eci)ic 1er)orm%nce Recto L%*

t,e seller must still ,%+e -ossessory lien or ,e must ,%+e e2ercise' t,e ri$,t o) sto--%$e in tr%nsitu. 1ossessory Lien 7,is -ossessory Lien is t,e ri$,t to *it,,ol' 'eli+ery or t,e ri$,t to ret%in. No*,ere in t,e Co'e *ill one )in' -ossessory lien. ;ut t,e -o-ul%r n%me is -ossessory lien0 to 'istin$uis, t,is lien o) t,e seller )rom %not,er lien o) t,e seller in % scen%rio *,ere t,e $oo's ,%+e %lre%'y been 'eli+ere' to t,e buyer. Un'er t,e rules on -re)erence on t,e concurrence %n' -re)erence o) cre'its0 %s to % t,in$ *,ic, *%s t,e ob.ect o) % s%le0 *,ic, *%s %lre%'y 'eli+ere' to % buyer *,o t,ere%)ter bec%me insol+ent0 t,e seller ,%s -re)erence %s to t,e un-%i' -rice o+er t,e t,in$. 3s insol ency re!"ired in order for this right to withhold can be e,ercised$ No. It is not necess%ry or re3uire'0 but it is one o) t,e $roun's )or t,e seller to *it,,ol' t,e 'eli+ery o) t,e $oo's. E+en i) t,e buyer is not insol+ent but t,ere is no sti-ul%tion %s to cre'it0 t,e buyer still 'i' not -%y0 t,e seller ,%s t,e ri$,t to ret%in t,e $oo's. E+en i) t,ere *%s sti-ul%tion %s to cre'it suc, t,%t t,e buyer *%s $i+en % -erio'0 but 'es-ite t,e l%-se o) t,e -erio' t,e buyer still 'i' not -%y0 t,e seller c%n still ret%in t,e $oo's. 3f the goods were deli ered by the seller to a common carrier, p"rs"ant to their stip"lation in the contract for "ltimate deli ery to the b"yer, does it mean that the seller has lost its lien o er the goods$ As % rule0 'eli+ery to % common c%rrier is 'eli+ery to t,e buyer. ;ut e+en i) t,e $oo's *ere 'eli+ere' to t,e common c%rrier0 t,e seller m%y not ,%+e lost ,is lien. 7,ere)ore ,is reme'y is -ossessory lien %n' not sto--%$e in tr%nsitu. 7,is *oul' ,%--en i) ,e reser+e' o*ners,i- o+er t,e t,in$. W,%t is -ro+i'e' un'er t,e l%* *ill inclu'e reser+%tion o) o*ners,i-. 7,ere is somet,in$ *ron$ *it, t,e +ie* t,%t -ossessory lien m%y be in+o8e' *,en t,e seller reser+e' o*ners,i-0 bec%use it 'oes not m%tter *,et,er t,e seller reser+e' o*ners,i- or not in rel%tion to -ossessory lien. E+en i) o*ners,i- ,%' %lre%'y -%sse' ,e m%y still ,%+e t,e ri$,t to ret%in t,e $oo's. I) t,ere is % reser+%tion o) -ossession0 t,ere *ill be no -roblem since t,e seller *oul' ,%+e t,e ri$,t to obt%in t,e $oo's )rom t,e common c%rrier0 ,e 'i' not lose ,is -ossessory. Sto--%$e in 7r%nsitu As to sto--%$e in tr%nsitu0 once t,e seller ,%' %lre%'y -%rte' -ossession %n' t,e $oo's %re %lre%'y in tr%nsit %n' t,e %s %not,er re3uisite t,e buyer is %lre%'y insol+ent. 7%8e note t,%t t,e insol+ency o) t,e buyer nee' not ,%--en %t t,e time o) t,e -er)ection o) t,e contr%ct. E+en i) t,e

3f the b"yer paid K+. of the price can the seller still in o)e these remedies$ Fes0 %s lon$ %s t,e -rice ,%s not be )ully -%i'0 t,e seller is still %n un-%i' seller. E+en i) t,e buyer -%i' % c,ec8 )or t,e )ull %mount0 t,e seller m%y still ,%+e t,e ri$,t to in+o8e t,ese reme'ies i) t,e c,ec8 *%s 'is,onore'0 not 'ue to t,e )%ult o) t,e seller. 'ay a person who is not a party to the sale be able to in o)e any of these remedies$ Fes bec%use t,e l%* -ro+i'es t,%t t,e *or' seller *oul' inclu'e cert%in t,ir' -ersons0 suc, %s %ssi$nees or ,eirs o) t,e seller0 or %n %$ent to *,om % bill o) l%'in$ *%s en'orse'. 'ay these remedies be in o)ed if theses remedies already passed to the b"yer$ Fes0 by e2-ress -ro+ision o) t,e l%*. /ow can the seller ha e the right to retain or possessory lien if ownership already passed$ 1ossession by t,e seller m%y be ret%ine' bec%use o) constructi+e 'eli+ery. Wit, constructi+e 'eli+ery0 o*ners,im%y %lre%'y be *it, t,e buyer0 but -ossession m%y still be *it, t,e seller0 or t,e seller *%s merely constitute' %s % 'e-osit%ry. O*ners,i- %lre%'y -%sse' but t,e seller still ,%s t,e ri$,t to *it,,ol' t,e 'eli+ery o) t,e $oo's. Are these remedies alternati e or can be in o)e all at the same time$ As to t*o reme'ies0 t,ey c%nnot e2ist %t t,e s%me time0 %n' t,ese %re -ossessory lien %n' sto--%$e in tr%nsitu bec%use % re3uirement )or t,e ri$,t o) sto--%$e in tr%nsitu to %rise is t,%t t,e seller must ,%+e %lre%'y -%rte' -ossession0 %n' -ossession is % re3uirement in -ossessory lien. ;ut i) t,e seller -ro-erly e2ercise' t,e ri$,t o) sto--%$e in tr%nsitu0t,e im-lic%tion is t,%t t,e seller *ill be re+erte' b%c8 to its -ossessory lien. >o*e+er0 %s to t,e t*o ot,er reme'ies o) ri$,t o) res%le %n' ri$,t o) rescission0 t,e l%* e+en e2-ressly re3uires t,%t

<

insol+ency occurre' *,ile t,e $oo's *ere %lre%'y in tr%nsit. t,%t c%n be t,e b%sis o) t,e e2ercise o) t,is ri$,t. 7,ere is no 3uestion %s to t%8in$ %ctu%l -ossession o+er t,e $oo's. ;ut t,e ot,er m%nner o) e2ercisin$ t,e ri$,t is by $i+in$ notice to t,e common c%rrier %s to t,e e2ercise o) t,e ri$,t. 7,e -roblem ,ere *oul' be in t,e scen%rio *,ere e+en *it, notice $i+en by t,e seller %s to ,is e2ercise o) t,e ri$,t. >o*e+er0 t,e common c%rrier re)use' to 'eli+er t,e $oo's b%c8 to t,e seller or to t,e -l%ce o) t,e -l%ce s-eci)ie' by t,e seller0 it 'oes not necess%rily me%n t,%t t,e common c%rrier *oul' be li%ble bec%use %not,er re3uirement in or'er )or t,e common c%rrier to be obli$e' to return t,e $oo's b%c8 to t,e seller un'er % cert%in situ%tion is t,%t t,e 'ocument o) title *,ic, co+ers t,e $oo's must be surren'ere' )irst to t,e common c%rrier. 7,is is % -rotection to common c%rriers bec%use i) $oo's %re co+ere' by ne$oti%ble 'ocument o) title % t,ir' -erson *,o is not t,e seller m%y ,%+e % better ri$,t o+er t,e $oo's. 7,is is in rel%tion to t,e %lien%tion m%'e by t,e buyer to % t,ir' -erson. 3n a scenario where the seller has possessory lien or he -"st e,ercised his right to stoppage in transit", what if the b"yer sold the goods to a third person, can that third person compel the seller to deli er the goods to the b"yer$ #ill the alienation of the goods to a third person, will the seller lose his lien$ As % rule0 t,e seller *ill not lose ,is -ossessory lien. As %n e2ce-tion0 t,e seller *ill lose ,is lien *,en t,e seller %ssente' to t,is %lien%tion. Secon'ly0 *,en t,e $oo's %re co+ere' by % ne$oti%ble 'ocument o) title li8e % ne$oti%ble bill o) l%'in$ %n' t,e buyer sol' t,is $oo's to % t,ir' -erson in $oo' )%it, %n' )or +%lue0 *,ic, me%ns ,e ,%' no 8no*le'$e o) t,e 'e)ect on t,e title o) ,is seller. 7,ir'ly0 t,is ne$oti%ble 'ocument o) title must ,%+e been ne$oti%te' to t,is t,ir' -erson. Wit, t,ese0 t,e seller *oul' lose ,is lien. 7,e t,ir' -erson *ill ,%+e % better ri$,t o+er t,e $oo's. A ne$oti%ble instrument bein$ % be%rer instrument 0 ,e c%n e%sily ne$oti%te by 'eli+ery. E+en i) it is %n or'er instrument0 %n' it is 'eli+er%ble to t,e or'er o) t,e buyer0 ,e c%n en'orse suc, 'ocument to %not,er buyer. A$%in0 t,e un-%i' seller *ill lose t,is lien *,en %ll t,ese re3uisites %re -resent. 3f an action for specific performance was filed instead of in o)ing the other remedies or together with the other remedies, in the -"dgment of the co"rt, the -"dgment was in fa or of the seller, and if the -"dgment becomes final and e,ec"tory ordering the b"yer to pay the price, may the seller now lose his lien, and therefore the b"yer can demand for the deli ery of the goods to him so that he will thereafter pay the price$ No. E+en i) t,ere is suc, % .u'$ment in )%+or o) t,e seller0 ,e *ill not lose ,is lien. Dust bec%use t,ere is % .u'$ment in )%+or o) t,e seller0 t,ere is no $u%r%ntee %t %ll t,%t t,e buyer *ill be %ble to -%y or t,e buyer *ill in )%ct -%y. Ri$,t o) Res%le

It is re3uire' t,%t t,e seller must still ,%+e -ossessory lien )or t,e seller to e2ercise t,e ri$,t o) res%le. 3s insol ency re!"ired$ No0 but it m%y be one o) t,e scen%rios *,ere t,e seller *ill ,%+e t,e ri$,t to resell. One o) t,e $roun's )or t,e e2ercise o) t,e ri$,t is bec%use t,e buyer ,%s been in 'e)%ult )or %n unre%son%ble len$t, o) time. Anot,er $roun'0 is t,%t t,is ri$,t is e2-ressly reser+e' to t,e seller0 %n' %not,er $roun' is t,%t t,e $oo's %re -eris,%ble. In rel%tion to t,is reme'y0 t,e l%* *oul' mention t*o notices comin$ )rom t,e +en'or to t,e +en'ee. 7,e )irst notice is t,e intention o) t,e +en'or to resell. 7,e secon' notice is %s to t,e '%te0 t,e time %n' to t,e -l%ce o) t,e res%le. Are the notices necessary for the alidity of the resale$ 7,ese notices %re not necess%ry )or t,e +%li'ity o) t,e res%le. Its rele+%nce0 %s to t,e )irst notice -ert%inin$ to t,e intention to resell *ill only be rele+%nt i) t,e $roun' )or t,e res%le is bec%use t,e buyer ,%' been in 'e)%ult )or %n unre%son%ble len$t, o) time. I) t,ere is suc, notice es-eci%lly i) t,e notice *%s sent by % l%*yer0 it *ill be seen *,en t,e notice *%s sent0 *,en it %s recei+e' by t,e buyer0 t,ere)ore0 it *oul' tell t,%t t,e buyer ,%' been in 'e)%ult )or %n unre%son%ble len$t, o) time. As to t,e t*o ot,er $roun's o) e2-ress reser+%tion %n' $oo's %re -eris,%ble0 %s to t,e )irst notice *ill )in' not rele+%nce. As to t,e secon' notice o) t,e '%te0 time %n' -l%ce o) res%le. 7,is ,%s somet,in$ to 'o *,en t,e res%le *%s 'one in $oo' )%it, or not. So *,%t i) t,e s%le is in $oo' )%it, or in b%' )%it,= W,en *oul' it be consi'ere' on $oo' )%it, or in b%' )%it,= 7,e e))ect o) t,is0 ,%s somet,in$ to 'o *it, t,e ri$,t to reco+er t,e 'e)iciency %)ter t,e res%le. :or e2%m-le0 t,e un-%i' %mount or t,e tot%l cont%ct -rice o) 1!!80 but t,e net -rocee's o) t,e res%le is 9!80 ,ence t,e 'e)iciency o) 5!8. C%n t,e seller reco+er t,is 'e)iciency )rom t,e buyer= Fes0 i) t,e s%le is % $oo's )%it, s%le. Suc, notice is im-ort%nt bec%use i) t,e buyer *%s $i+en notice %t t,e '%te0 time %n' -l%ce o) res%le0 ,e *oul' ,%+e been -resent or ,e coul' ,%+e %tten'e' t,e res%le0 %n' ,e *oul' ,%+e 8no*n i) in'ee' t,e ,i$,est bi' *%s only 9!8. W,ere%s i) t,ere is no notice0 t,ere is % $oo' -ossibility t,%t t,e seller m%y ,%+e e+en sol' t,e s%me -ro-erty to ,imsel). Un'er t,e l%* ,e coul' not sell t,e -ro-erty to ,imsel) 'irectly or in'irectly. >ence ,e coul' not conni+e to % t,ir' -erson to buy t,e $oo's )or % less +%lue so ,e c%n reco+er t,e 'e)iciency )rom t,e buyer. Suc, *oul' be % b%' )%it, s%le0 %n' t,e seller coul' no lon$er ,%+e t,e ri$,t to reco+er t,e 'e)iciency. ;ut i) in'ee' t,ere *%s % $oo' )%it, s%le0 %n' t,ere *%s %ctu%l bi''in$ %n' t,ere %re -erson *,o bi'0 but t,e ,i$,est bi''er is 9!0 t,e buyer c%n be com-elle' to -%y t,e 'e)iciency. #hen the net proceeds is greater than the payable amo"nt, who is entitled to the e,cess amo"nt$

Un'er t,e l%* it is t,e seller. 7,e seller s,%ll not be res-onsible )or t,e buyer )or *,%te+er -ro)it ,e m%y obt%in out o) t,e res%le. 3f the b"yer partially paid, b"t the seller resold it at a price higher than the amo"nt payable, can the b"yer demand for the amo"nt paid$ No. 7,e l%* is cle%r t,%t t,e seller s,%ll not be res-onsible )or %ny -ro)it ,e m%y obt%in out o) t,e res%le. 3f ownership had already passed to the b"yer, in the e,ercise of the right of resale, sho"ld the seller rescind the first contract, or the title of the first b"yer for him to be able to resell$ No nee' )or rescission bec%use t,e e))ect o) t,e res%le *oul' termin%te t,e o*ners,i- o) t,e )irst buyer by o-er%tion o) l%*. Suc, o*ners,i- c%n be +este' u-on t,e secon' buyer u-on t,e 'eli+ery o) t,e $oo's to t,e secon' buyer. Rescission #hat are the gro"nds for rescission$ 1. 7,e buyer ,%s been in 'e)%ult )or %n unre%son%ble len$t, o) time . 7,e ri$,t is e2-ressly reser+e' to t,e sellerC Recto L%* I) t,e buyer )%ils to -%y or more inst%llments reme'ies %re -ro+i'e' to t,e seller. In t,e )irst -l%ce0 t,e Recto L%* is consi'ere' rel%te' to t,e (%ce'% L%*0 t,%tHs *,y t,e e2%miner mi$,t re3uire you to 'istin$uis, one )rom t,e ot,er0 ,ence/ 'aceda Daw Contr%ct o) S%le S%le on Inst%llment 1%sse' to -rotect buyers Ob.ect o) s%le is % Re%lty )or Resi'enti%l -ur-ose (ecto Daw Contr%ct o) S%le S%le on Inst%llment 1%sse' to -rotect buyers0 Ob.ect o) t,e s%le is % -erson%l -ro-erty or mo+%ble -ro-erty. Reme'ies/ E2%ct )ul)illment C%ncell%tion o) t,e S%le :oreclosure o) (ort$%$e

7,e Recto l%* is consi'ere' %s % -rotection to buyers 'es-ite t,e )%ct t,%t t,e l%* $i+es t,e seller reme'ies0 %n' not to buyers. In t,e sense t,%t t,ese reme'ies %re %ltern%ti+e in c,%r%cter0 it is me%nt to -rotect buyers bec%use once t,e seller in+o8e %ny o) t,ese reme'ies0 ,e c%n no lon$er in+o8e t,e ot,er reme'ies. %ale of a specific car worth 5 million, payable in 1+ e!"al ann"al payments. 1he b"yer failed to pay the third installment. Can the seller in o)e any of the three remedies$ No0 bec%use only one inst%llment *%s un-%i'. :or t,e t*o ot,er reme'ies to be %+%il%ble to t,e seller0 t,e buyer must ,%+e )%ile' to -%y t*o or more inst%llments. I) t,ere is only one inst%llment le)t un-%i'0 t,e only reme'y by t,e seller is e2%ct )ul)illment. &espite demand, the b"yer failed to pay the third installment, within a month the seller filed an action to reco er a s"m of money. 3n this action how m"ch will be reco ered by the seller$ Since t,e buyer *%s %ble to -%y only inst%llments e3ui+%lent to 1 million0 t,ere)ore t,ere is yet % b%l%nce o) 5 million0 t,e seller c%nnot reco+er t,e *,ole 5 million. W,%t t,e seller c%n reco+er is only t,e 'ue %mount le)t un-%i'0 *,ic, is t,e t,ir' inst%llment in t,e %mount o) 6!! t,ous%n'. 3s it possible for the seller to reco er the entire balance$ Fes0 i) t,ere is % cl%use in t,e contr%ct o) s%le 8no*n %s %n %cceler%tion cl%use st%tin$ t,%t e+en i) t,e buyer only )%ile' to -%y only one inst%llment0 t,e entire b%l%nce *ill become 'ue %n' 'em%n'%ble. Assumin$ t,e buyer )%ile' to -%y t,e t,ir' inst%llment %n' t,e <t, inst%llment0 m%y t,e seller in+o8e %ny o) t,e t,ree reme'ies= No. I) t,e seller 'e)%ulte' on t,e t,ir' %n' on t,e <t, inst%llment0 t,e -remise ,ere is t,%t t,e seller *%s %ble to -%y t,e t,ir'0 )ourt,0 )i)t, %n' t,e si2t, inst%llment. Since ,e 'e)%ulte' on t,e <t,0 t,ere is only one un-%i' inst%llment. 7,e l%* re3uires t,%t t,e buyer must ,%+e )%ile' to -%y t*o or more inst%llments (consecuti+e inst%llments#. 7,e l%* 'i' not mention t,%t t,e buyer )%ile' to -%y t*ice. 3n a scenario, b"yer failed to pay se eral installments, s"ch as the third and the 4th$ 'ay the seller in o)e any of the three remedies$ Fes. 3f the seller in the abo e scenario chose cancellation of the sale, with cancellation of the sale, what is the effect as to the right and obligation of the parties$

"

Since t,is is % )orm o) rescission0 t,e e))ect *oul' be mutu%l restitution. 7,e buyer *ill ,%+e to return t,e c%r to t,e seller0 %n' *it, mutu%l restitution t,e seller *oul' norm%lly return %ll t,e %mounts -%i'0 but un'er t,is l%*0 t,e seller is not re3uire' to return %ll t,e %mounts -%i'. 7,e l%* %llo*s t,e seller to ret%in % re%son%ble %mount *,ic, *ill be consi'ere' %s com-ens%tion )or t,e use o) t,e t,in$. 'ay the seller retain all the amo"nts paid by the b"yer$ Fes0 i) t,ere is % )or)eiture cl%use. 7,is is one bi$ 'i))erence in t,e (%ce'% L%*. In t,e (%ce'% L%*0 )or)eiture cl%use is +oi'. 2 en if there is a forfeit"re cla"se, is it possible that the seller, may not ha e the right to retain all the amo"nts paid$ Fes0 i) to 'o so *oul' be consi'ere' %s unconscion%ble. 7o 'etermine i) it is unconscion%ble *oul' 'e-en' on t,e circumst%nces o) t,e c%se or o) t,e s%le %n' t,e %mount in+ol+e %n' t,e -%rties. 1o sec"re the f"lfillment of the b"yers obligation on the car sold, the b"yer mortgage his bl"e diamond. 1hereafter the b"yer failed to pay the third and the fo"rth installments. 1he seller can now in o)e any of these remedies, b"t when the seller in o)e foreclos"re of the mortgage and the net proceeds of the foreclos"re sale is less than the balance, hence there is deficiency, can the seller reco er the deficiency from the b"yer$ Fes0 bec%use t,e Recto L%* 'oes not %--ly to t,is scen%rio bec%use t,e t,in$ bou$,t *%s not t,e s%me t,in$ *,ic, *%s mort$%$e'. :or t,e Recto L%* to %--ly0 *,%t is bou$,t0 is t,e s%me t,in$ *,ic, is mort$%$e'. A bo"ght a tr"c) from B payable in installment sec"red by a chattel mortgage e,ec"ted by A on the tr"c). As additional sec"rity A8s brother C, e,ec"ted a real estate mortgage in fa or of B. A defa"lted in the payment of se eral installments. Conse!"ently B filed an action for reple in, repossessed the tr"c) and foreclosed the chattel mortgage. Can B proceed the other properties of A and the real estate mortgage e,ec"ted by C, to reco er the deficiency if any after the chattel mortgage foreclos"re sale$ No. ; c%nnot -rocce' %$%inst t,e ot,er -ro-erties bec%use un'er t,e Recto L%*0 since un'er t,e )%cts t,e s%le is co+ere' bein$ % s%le o) % mo+%ble on inst%llment0 *oul' not %llo* t,e reco+ery o) t,e 'e)iciencies o) )oreclosure. Koin$ %)ter t,e ot,er -ro-erties is % )orm o) reco+ery o) 'e)iciency. In t,e s%me m%nner0 t,e )oreclosure o) t,e re%l est%te mort$%$e is %lso % )orm o) reco+ery o) t,e 'e)iciency0 bec%use t,e re%l est%te -ro-erty *ill be sol' %n' t,e net

-rocee's *ill be %--lie' to t,e in'ebte'ness *,ic, is -ro,ibite' un'er t,e Recto L%*. (o'es o) E2tin$uis,ment o) S%le 1. C%ncell%tion o) S%le o) -erson%l -ro-erty -%y%ble in inst%llment (Art. 15E5#. . Return o) $oo's by t,e buyer to t,e seller in S%le or Return or S%le on 7ri%l (Art. 16! #. 4. Seller sto--in$ t,e $oo's in tr%nsit (Art. 164 #. 5. Un-%i' seller resellin$ t,e $oo's (Art. 1644#. 6. Un-%i' seller rescin'in$ t,e contr%ct o) s%le (Art. 1645# 9. Rescission o) s%le *,en t,e t,in$ 'eli+ere' *%s l%c8in$ in %re% or o) in)erior 3u%lity. <. Rescission o) s%le *,en t,ere is % bre%c, o) *%rr%ntyC E. Rescission o) t,e s%le o) %nim%ls *it, re',ibitory 'e)ectC ". 1%yment 1!. No+%tion 11. Loss o) t,e t,in$ 1 . Res%le #hat is the e,tra special mode of e,ting"ishment of sale$ Re'em-tion eit,er con+ention%l or le$%l. #hat are the )inds of redemption$ 1. Con+ention%l - 7,ere is ri$,t to re-urc,%se e2-ressly reser+e' in t,e contr%ct %n' t,is ri$,t m%y only %rise in 1 8in' o) contr%ct. 7,is is % s%le *it, % ri$,t to re-urc,%se or -%cto 'e retro s%le. . Le$%l - 7,ose *,ic, m%y be e2ercise' by co-o*ners or by o*ners o) %'.%cent lots. Con+ention%l I) t,ere *%s no sti-ul%tion %s to t,e ri$,t o) re'em-tion t,en no ri$,t o) re'em-tion. 3n the e,ercise of this right, how m"ch wo"ld ha e to be offered by the seller a retro in order to redeem the property$ #o"ld the price paid by the b"yer be s"fficient in order to rep"rchase the same$ Not necess%rily. Un'er t,e l%*0 t,e %mount *,ic, ,%s to be o))ere' by t,e seller % retro (+en'or# in t,e e2ercise o) t,e ri$,t o) re'em-tion %re/ 1# -rice -%i'C # t,e e2-enses incurre' by t,e +en'ee (buyer % retro# )or t,e e2ecution o)

4!

t,e contr%ct 4# necess%ry %n' use)ul e2-enses incurre' by t,e buyer (buyer % retro#. :ruits %t t,e time o) s%le 3n a mango plantation, there may be fr"its at the time of redemption.1he al"e of the fr"its is 1++). Can the seller (b"yer a retro) be compelled to pay for the al"e of the fr"its$ It *ill 'e-en' on *,et,er t,ere %re )ruits %t t,e time o) t,e s%le. I) t,ere *ere )ruits %t t,e time o) t,e s%le0 t,e seller (seller % retro# *ill only be obli$e' to -%y t,e )ruits %t t,e time o) re'em-tion i) %t t,e time o) t,e s%le0 t,e buyer (buyer % retro# -%i' )or t,e -rice o) t,e +%lue o) t,e )ruits. ;ut i) %t t,e time o) t,e s%le0 t,ere *ere )ruits but t,e buyer (buyer % retro# 'i' not -%y )or t,e +%lue o) t,e )ruits0 t,en t,e seller s,oul' not li8e*ise be com-elle' to -%y )or t,e +%lue o) t,e )ruits %t t,e time o) re'em-tion. No )ruits %t t,e time o) s%le0 but t,ere %re )ruits %t t,e time o) re'em-tion 3f a C4% was entered into in Gan"ary *++1 and there were no fr"its at the time of the sale. /owe er, at the time of redemption in April 1, *++5 there were fr"its. 1he al"e of which is 1++). /ow m"ch can the seller be compelled to pay fro these fr"its$ Un'er t,e l%* t,e seller (seller % retro# c%n be com-elle' to -%y )or t,e +%lue o) t,e )ruits $i+in$ t,e buyer (buyer % retro# t,e -%rt corres-on'in$ to t,e time ,e -ossesse' t,e l%n' in t,e l%st ye%r0 counte' )rom t,e %nni+ers%ry o) t,e '%te o) t,e s%le. Un'er t,e )%cts0 t,e %nni+ers%ry '%te is e+ery D%nu%ry 1st. 7,e %nni+ers%ry '%te (t,e l%st ye%r# is D%nu%ry 10 !!6. :rom D%nu%ry 10 !!6 to A-ril 10 !!60 t,e buyer *%s %lre%'y in -ossession )or 4 mont,s out o) 1 mos. o) t,e entire ye%r0 me%nin$ it is 1J5 o) t,e entire ye%r. 7,ere)ore t,e buyer % retro (seller# is com-elle' to -%y 1J5 o) t,e o) t,e 1!!8 +%lue o) t,e )ruits *,ic, is 60!!!. 1erio' o) Con+ention%l Re'em-tion A sold a land to B for 1+) with a right to rep"rchase e,pressly agreed "pon between the parties. Beca"se they were friends, they did not pro ide for a period within which the seller may e,ercise the right to rep"rchase. B"t again, there was a reser ation of the right to rep"rchase, b"t the parties failed to fi, the period. %. #hen sho"ld the seller a retro e,ercise the right to rep"rchase$ b. 3f the seller failed to rep"rchase within the period agreed "pon or the period prescribed by law, what will be yo"r ad ice to the b"yer in order to protect the b"yer more$

%. 7,e -erio' is 5 ye%rs. Un'er t,e l%*0 i) t,ere is % ri$,t o) re'em-tion but t,e -%rties )%ile' to -ro+i'e )or suc, % -erio'0 t,e l%* itsel) s%ys t,%t t,e ri$,t m%y be e2ercise' only *it,in 5 ye%rs. >o*e+er0 i) t,e -%rties sti-ul%te' %s to t,e -erio' *it,in *,ic, t,e ri$,t m%y be e2ercise'0 t,e l%* -ro+i'es t,%t suc, c%nnot e2cee' 1! ye%rs0 %n' i) it e2cee's 1! ye%rs0 t,e s%me *ill be re'uce'. b. 7o )ile %n %ction )or t,e consoli'%tion o) title. 3n a sale with right to rep"rchase, ownership passes "pon the e,piration of the right to rep"rchase$ No0 o*ners,i- -%sses to t,e buyer u-on 'eli+ery. 7,e im-lic%tion ,o*e+er o) t,e e2-ir%tion to t,e ri$,t to re-urc,%se0 is t,%t o*ners,i- by t,e buyer becomes %bsolute. #hat will be the effect of the e,piration of the period to rep"rchase witho"t the seller e,ercising s"ch right$ 4r e en if he did e,ercise, it was not a alid e,ercise of a right$ 3n the abo e scenarios, what is the effect on the ownership of the b"yer$ ;uyers ri$,t o) o*ners,i- o+er t,e t,in$ becomes %bsolute. Durin$ t,e -erio' ,e ,%s o*ners,i-0 but t,is o*ners,i- is sub.ect to % resolutory con'ition *,ic, is t,e +%li' e2ercise o) t,e ri$,t to re-urc,%se. An' u-on re-urc,%se0 o*ners,iby t,e buyer (buyer % retro# s,%ll be termin%te'. Apon the lapse of the period witho"t the seller ha ing e,ercised his right to rep"rchase the ownership of the b"yer becomes absol"te regardless of whether the s"b-ect of the sale is an immo able or a mo able property$ Fes0 o*ners,i- becomes %bsolute0 %n' it 'oes not m%tter *,et,er t,e ob.ect o) s%le is %n immo+%ble or % -erson%l -ro-erty. 3s an action for consolidation of title re!"ired in order that the b"yer ac!"ire ownership o er the ob-ect of the sale or at lease ac!"ire absol"te ownership$ No. 7,is %ction is only necess%ry i) ,e *oul' *%nt t,e -ro-erty to be re$istere' in ,is n%me. 7,is %ction is in or'er to -rotect t,e buyer so t,%t t,e seller c%nnot sell t,e -ro-erty to %not,er -erson.

Ass"ming yo" are a lawyer, a client as)ed yo" to e,amine a doc"ment which is denominated as a &4% with a right to rep"rchase and that client was the b"yer a retro (b"yer). /owe e r, " p o n e,amination of the terms and conditions of the contract, it appears that the right has long e,pired. 1h"s, the client as)ed, may 3 still be able to reco er this parcel of land which is the s"b-ect matter of this contract$

41

Consi'er t,e -ossibility t,%t t,e client m%y reco+er. As8 t,e client o) t,e circumst%nces surroun'in$ t,e e2ecution o) t,%t 'ocument. As8 ,im @W,y 'i' you e2ecute t,is DOS=A I) t,e %ns*er is @8%si -o %tty. n%$8% ut%n$ %8o s% 8%ny% 16!8 t%-os s%bi ny% inste%' o) e2ecutin$ % mort$%$e %$reement0 DOS *it, % ri$,t to re-urc,%seA. Any*%y0 )rom t,e DOS *it, % ri$,t to re-urc,%se0 ,e m%y %--e%r to be -rotecte'. B%si i) ,e o*es t,%t -erson 1( %n' i) ,e is $i+en in t,e 'ebt % -erio' o) 1 ye%r *it,in *,ic, to -%y in t,e DOS *it, % ri$,t to re-urc,%se0 ,e *oul' %lso ,%+e 1 ye%r *it,in *,ic, to re-urc,%se. Dib% -%r%n$ -%re,o l%n$= ;ut inste%' o) mort$%$e ,e *%s %s8e' to si$n % DOS. I) t,%t is t,e c%se0 cle%rly you c%n conclu'e t,%t t,is is not %n ,onest to $oo'ness s%le *it, % ri$,t to re-urc,%se. Fou c%n tre%t this transaction merely as an equitable mortgage. >ence0 ,e m%y still be %ble to reco+er *,%t *%s t,e sub.ect m%tter o) t,%t tr%ns%ction. #hy wo"ld the creditor (b"yer) as) his debtor (seller) to sign a &4% with a right to rep"rchase instead of a mortgage to sec"re the f"lfillment of his obligation$ 7o ensure t,%t t,e -ro-erty *ill be o*ne' by ,im %utom%tic%lly u-on t,e e2-ir%tion o) t,e -erio' *it,in *,ic, to re-urc,%se %n' t,e seller % retro )%ile' to e2ercise t,e ri$,t to re-urc,%se *,ic, *ill not ,%--en in % mort$%$e. 7,ere is % -rinci-le in mort$%$e 8no*n %s -%ctum commissorium. U-on t,e 'e)%ult o) t,e 'ebtor t,e mort$%$ee0 c%nnot +%li'ly %--ro-ri%te t,e t,in$ )or ,imsel). O*ners,i- *ill not %utom%tic%lly -%ss by mere 'e)%ult o) t,e -rinci-%l 'ebtor bec%use -%ctum commissorium is +oi' bec%use t,e reme'y o) t,e cre'itor is to ,%+e t,e -ro-erty sol' in % )oreclosure s%le not to %--ro-ri%te t,e t,in$. So to %+oi' t,ose re3uirements s% mort$%$e0 %n$ $%$%*in n$ sellerJ cre'itor is to ,%+e t,e 'ebtor si$n % DOS *it, % ri$,t to re-urc,%se bec%use t,e moment t,e 'ebtor )%ile' to re-urc,%se *it,in t,e -erio'0 %bsolute o*ners,i- $oes to t,e cre'itor *,o is in t,%t s%le t,e buyer (cre'itor# % retro. W%l% n% sy%n$ 8%il%n$%n $%*in. I) t,e instrument is % DOS *it, % ri$,t to re-urc,%se it m%y %ctu%lly be consi'ere' %s %n e3uit%ble mort$%$e by .ust e2%minin$ t,e terms %n' con'itions o) t,%t contr%ct. 7,ere %re cert%in inst%nces *,en t,e l%* itsel) -ro+i'es )or % -resum-tion t,%t t,is is %n e3uit%ble mort$%$e un'er 19! . #hat are those instances where a &4% may act"ally be disp"tably pres"med to be as an e!"itable mortgage$ 1. 7,e -rice is $rossly in%'e3u%te. . I) t,e +en'or % retro *oul' continue to be in t,e -ossession o) t,e t,in$ %)ter t,e s%le0 *,ic, is unusu%l bec%use i) in'ee' t,is is % s%le t,en t,e +en'ee s,oul' be in -ossession %)ter t,e s%le.

Are these pres"mptions concl"si e$ No0 t,is is merely % 'is-ut%ble -resum-tion. In )%ct0 t,e SC *oul' sust%in t,e +%li'ity o) % s%le *it, % ri$,t to re-urc,%se 'es-ite t,e $ross in%'e3u%cy o) -rice bec%use some,o* it *oul' be %'+%nt%$eous to t,e seller % retro. In t,e e2ercise o) t,e ri$,t to re-urc,%se0 it is more %'+%nt%$eous i) t,e -rice is sm%ll bec%use ,e c%n e%sily come u- *it, t,%t %mount %n' re-urc,%se t,e t,in$. #hat if there was a stip"lation in the C4% that the seller will sho"lder the capital gains ta,$ #o"ld the pres"mption that this is an e!"itable mortgage will arise$ No0 t,e -resum-tion *ill only %rise i) t,e seller boun' ,imsel) to -%y t,e t%2 on t,e t,in$ not t,e c%-it%l $%ins t%2. 7,%t *oul' be t,e re%l -ro-erty t%2. Bote9 1resum-tions un'er 19! *oul' %rise re$%r'less o) *,et,er t,e s%le is 'enomin%te' %s % s%le *it, % ri$,t to re-urc,%se or % DOS. It 'oesnHt m%tter. E+en i) it is % DOS i) t,ere is 'oubt %s to *,et,er or not it is %n e3uit%ble mort$%$e. It ,%s to be resol+e' %s %n e3uit%ble mort$%$e. #hat is the remedy of the seller a retro$ Re)orm%tion bec%use t,e contr%ct %s *ritten 'i' not re)lect t,e re%l intention o) t,e -%rties. 7,e re%l intention is to secure t,e )ul)illment o) t,e obli$%tion o) t,e +en'or % retro ('ebtor#. B. Degal (edemption #ho has the right to redeem$ A/ $rou-s

1. Co-o*ners . O*ners o) %'.%cent lots (ob.ect is lot# - consi'er i) rur%l or urb%n l%n' Co-o*ners Co<owners of what thing, mo able or immo able$ It 'oes not m%tter. A, B, C, & co<owners of land. & donated his interest in the land to :. wo"ld A, B, C, ha e the right to redeem$ No0 in le$%l re'em-tion0 the alienation by a coowner must be by onerous title (s%le0 '%cion en -%$o0 b%rter#. 7,is %ct ('on%tion# is $r%tuitous %ct. >ence0 no ri$,t o) re'em-tion.

#hat if B sold his interest in the land to &. wo"ld A and C ha e the right to redeem$ No0 bec%use )or A %n' C to ,%+e t,e ri$,t to re''em0 the alienation should be in favor of a 3rd person. #hat if B sold his interest in the land to :. A, &, C, wanted to redeem. 'ay they be able to e,ercise the right of redemption$ All of them$ Fes. t,em. All o)

cannot agree on the portion of the share of B which will be redeemed by both of them < what wo"ld be the final sharing$ C *ill ,%+e J40 A *ill ,%+e 1J4 bec%use t,ey *ill ,%+e t,e ri$,t to re'eem in -ro-ortion to t,eir s,%re in t,%t -ro-erty. Note/ t,ey m%y sti-ul%te %s to t,e s,%rin$. #hat if in the &4% e,ec"ted between B and :, the price stated in &4% was E'. /ence, A and C can be compelled to redeem by paying E'$ Not necess%rily0 un'er t,e l%*0 i) t,e -rice st%te' in t,is s%le is unconscion%ble0 t,e re'em-tioners c%n only be com-elle' to -%y t,e re%son%ble +%lue. An$ -osiblen$ +%lue coul' only be 1( -ero %n$ n%8%l%$%y s% DOS 4(. Is it possible that X did not pay 3M? Fes. hy would they do that? 7,e re%son )or t,%t is to -re-em-t A %n' C )rom e2ercisin$ t,e ri$,t o) re'em-tion. 7o 'iscour%$e t,em )rom re'eemin$ t,e -ro-erty 8%si 8un$ mur% y%n t,ey c%n e%sily e2ercise t,e ri$,t o) re'em-tion. 7,e l%* -rotects t,e re'em-tioners - i) t,e -rice is unconscion%ble - t,ey m%y -%y re%son%ble +%lue. #hat if the al"e is E' b"t &4% stated 1' b"t : act"ally paid E' (1' was stated to red"ce ta, liability). /ow m"ch can A and C be compelled to pay$ (oromal vs )A >el'/ 7,e co-o*ners c%n only be com-elle' to -%y t,e -rice st%te' in t,e 'ee' o) s%le. 7,e tri%l court sust%ine' t,e cl%im o) t,e buyer t,%t t,ey be reimburse' t,e %ctu%l %mount -%i' bec%use %ccor'in$ to t,e tri%l court t,%t *oul' be immor%l to -%y only t,e %mount st%te' in t,e contr%ct. SC s%i' it *%s more immor%l *,en t,e -%rties -%y only % sm%ll %mount *,ere in )%ct t,e re%l %mount -%i' is % muc, ,i$,er %mount. ;ec%use t,e only -ur-ose o) t,is is to 'e)r%u' t,e $o+ernment. 4wners of Ad-acent Dots (%8e % 'istinction bet*een % s%le o) %n urb%n l%n' %n' s%le o) rur%l l%n'. S%le o) Urb%n l%n' Re3uisites/ 1. 7,e l%n' is so sm%ll %n' -urc,%se' only )or s-ecul%tion

3s this the same r"le in ad-acent lots$ No0 in %'.%cent lots0 t,ere c%n be so m%ny o*ners 'e-en'in$ on ,o* it is bi$. The owner with the smallest land area would have the right to redeem. #hat if the owners of ad-acent lots wo"ld ha e e!"al area$ 7,e )irst one *,o m%ni)este' ,is 'esire to re'eem. As to Co - o*ners Dand owned by spo"ses was sold by them to their three sons in E different deeds of sale. 3n each &4% the specific area was already described. After the e,ec"tion of the &4%, these children wo"ld act"ally har est only their respecti e area. 1hey wanted to ha e their respecti e share registered in their own name. 1hey filed a petition for the cancellation of the title of their parents for that property to be di ided, they s"bmitted their indi id"al &4%. B"t the petition was denied by the register of &eeds beca"se they failed to s"bmit a s"bdi ision plan. 1he (& cancelled the 1C1 in the name of the parents iss"ed another 1C1 in the name of the E children in one 1C1. 4ne of the children sold the land to a Erd person. Can the * other brothers redeem as co<owners$ No0 bec%use un'er t,e )%cts0 t,ey %re no lon$er coo*ners bec%use be)ore ,%n' t,eir -%rents sol' to t,em t,e -ro-erty in t,ree se-%r%te 'ee's o) s%le. Alt,ou$, % sin$le 7C7 *%s issue' to t,em0 is not conclusi+e %s to t,e ri$,ts o) t,e -%rties to % cert%in -ro-erty suc, %s in t,e c%se %s co-o*ners. At its )%ce t,ey %re co-o*ners but in re%lity t,ere ,%s %lre%'y been % -%rtition o) t,e -ro-erty. In )%ct0 % -ro-erty m%y be re$istere' in % -erson *,o is not t,e o*ner bec%use somebo'y )or$e' t,e si$n%ture o) t,e re%l o*ner. 7,us0 t,e re3uirement o) t,e l%* t,%t t,e co-o*ner *oul' ,%+e t,e ri$,t to re'eem is not -resent t,ere)ore0 t,ere *oul' be no ri$,t o) re'em-tion. A, B, C co<owners. A8s share M. B8s share M. C8s share N. B sold his interest in the land to :. /owe er, A and C both wanted to redeem. (As co< owners they may ha e the right to redeem). 3f they

I) t,%t is t,e c%se0 t,en t,e %'.%cent lot o*ners *oul' ,%+e t,e ri$,t not only o) t,e ri$,t o) re'em-tion but %lso o) ri$,t o) -re-em-tion. (Article 19 # In rur%l t,ere is no ri$,t o) -re-em-tion me%nin$ e+en be)ore t,e -er)ection o) t,e s%le0 t,e %'.%cent lot o*ners *oul' %lre%'y ,%+e t,e ri$,t to re'eem by *%y

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o) -re-em-tion0 4! '%ys )rom notice o) suc, intention to sell. ;ut in rur%l l%n's %n' %lien%tion is by onerous title. Anot,er re3uisite/ t,e l%n' *,ic, *%s t,e ob.ect t,e s%le must not be $re%ter t,%n 1 ,ect%re. Also0 )or t,e o*ners to ,%+e t,e ri$,t o) re'em-tion0 t,e buyer )rom *,om t,e -ro-erty *ill be re'eeme' must ,%+e %not,er rur%l l%n'. Anot,er re3uisite - t,e l%n' sol' %n' t,e l%n' o) re'em-tioner must not be se-%r%te' by broo8s0 ri+ers in or'er t,%t t,ese lot o*ners *oul' ,%+e t,e ri$,t to re'eem. !"# $isters % and ! co-owners of land. ! sold her interest in the land to X a 3 rd person. X sent a notice to the sister of the seller& the other co-owner informing her of such sale and giving her copy of the '($. 'espite notice& % did nothing. %fter that& X requested for the annotation of the sale in the title of that property in the )'. )' sent another notice to %. % did not do anything. %fter so many months& X wanted the property to be partitioned. % then give notice to X that she is e*ercising the right to redeem. 'oes % have the right to redeem? )ight of redemption must be e*ercise within 3+ days from what? A/ 7,e co-o*ner still ,%s t,e ri$,t to re'eem. Un'er 19 40 t,e 4!-'%y -erio' *oul' st%rt to run only )rom t,e time t,e co-o*ner recei+e' )rom t,e +en'or. $ino nagbigay ng notice from the facts? Un%0 yun$ +en'ee -%n$%l%*% yun$ RD. so ,in'i yun$ +en'or %m' n%$bi$%y. So 4!-'%y -erio' ,%s not st%rte' to run. >ence0 ,e still ,%s t,e ri$,t to re'eem. Atty. Aribe9 Un'er t,e )%cts0 s,e recei+e' notices0 not only *ritten notices but %lso co-ies o) t,e DOS. Un'er t,e -rinci-le o) esto--el0 s,e c%nnot cl%im t,%t s,e still ,%s 4! '%ys. In )%ct0 in % 'ecision o) SC in+ol+in$ % s%le o) % co-o*ner s,%re *,ic, s%le *%s )%cilit%te' by t,e ot,er co-o*ner. ;ut t,e l%tter cl%ime' ,e c%n still re'eem bec%use ,e 'i' not recei+e notice. SC s%i' sy% %n$ n%$-)%cilit%te n$ s%le so *,y ,e coul' not be $i+en notice0 ,ence ,e ,%' 8no*le'$e o) t,e s%le. 7,is is still consistent in t,e c%se o) Dorom%l. I) you consi'er t,e -ro+ision liter%lly it s%ys @4! '%ys )rom t,e time o) notice in *ritin$ is $i+en by t,e +en'or to t,e co-o*nerA. An$ n%8%l%$%y s% b%t%s0 notice in *ritin$. ,ence& apparently even a letter written by the vendor would suffice and hence the 3+ day period would start to run? SC s%i'/ No0 t,e co-o*ner s,oul' be $i+en % co-y o) t,e DOS %n' it is only )rom t,%t moment t,%t t,e 4!'%y -erio' *ill st%rt to run. 7,is is % $oo' rulin$ - not %ny or'in%ry notice but % co-y o) t,e DOS bec%use in re'em-tion0 t,e re'em-tioner is su--ose' to be subro$%te' un'er t,e s%me terms %n' con'itions %s t,e

buyer. >o* *oul' ,e 8no* t,e terms %n' con'itions o) t,e s%le i) ,e is not $i+en % co-y o) t,e DOS. So ,e must ,%+e % co-y.
Double S%les 3f the same thing sho"ld ha e been sold to different endees, to whom shall ownership be transferred$ 3s it possible that ownership ha e been transferred to both b"yers$ It is -ossible t,%t bot, buyers m%y ,%+e %c3uire' o*ners,i- but only one o) t,em *oul' ,%+e % better ri$,t. 7,e re%l 3uestion in 'ouble s%les is *,o ,%s t,e better ri$,t. #hat is the r"le when there is a sale of a mo able property to two or more persons, who has a better right$ 7,e )irst -erson *,o too8 -ossession in $oo' )%it,. I) no one too8 -ossession o) t,e mo+%ble0 it is t,e buyer *,o ,%s t,e ol'est title0 %n' in $oo' )%it,. #hat is the r"le when there is a sale of an immo able to two or more persons, who has a better right$ 1. 7,e )irst *,o re$istere' t,e 'ee' o) s%le in $oo' )%it,C . 7,e )irst *,o too8 -ossession in $oo' )%it, 4. 7,e buyer *,o ,%s t,e ol'est title in $oo' )%it,. GF, owner of a parcel of land sold it to 66. B"t the land was not registered, one year later, GF sold the same parcel of land to ((, who s"cceeded to register the deed and to obtain a 1C1 o er the property in his own name. #ho has the better right o er the parcel of land$ RR m%y ,%+e % better ri$,t0 *,en RR re$istere' t,e s%le in $oo' )%it,. Un'er t,e )%cts0 RR *%s %ble to re$ister t,e 'ee' in ,is o*n n%me0 t,ere *%s no mention t,%t ,e ,%' no 8no*le'$e o) t,e -rior s%le %t t,e time o) re$istr%tion. /ow to determine good faith between first and second b"yer$ As to t,e )irst buyer0 it is t,e )%ct t,%t ,e ,%s no 8no*le'$e o) t,e 'e)ect on t,e title o) t,e seller. As to t,e secon' buyer0 it is t,e )%ct t,%t ,e ,%s no 8no*le'$e o) t,e title o) t,e )irst buyer. G"ne 15, 1KK5, Ges"s sold a parcel of land to Gaime. 4n G"ne E+ 1KK5, he sold the same land to Gose. #ho has the better right if the first sale is registered ahead of the second sale, with )nowledge of the latter and the second sale was registered ahead of the first sale with )nowledge of the latter$ As to t,e )irst s%le0 )irst s%le *%s re$istere' %,e%' o) t,e secon' e+en *it, 8no*le'$e o) t,e secon' s%le0 t,e re$istr%tion is +%li'. E+en t,ou$, t,e )irst buyer %c3uire' 8no*le'$e o) t,e secon' s%le0 ,e m%y re$ister t,e 'ee' o)

45

s%le %)ter t,e secon' s%le. Since ,e *%s t,e )irst buyer *,o re$istere' t,e s%le0 8no*in$ t,e secon' s%le 'oes not m%8e t,e )irst buyer % buyer in b%' )%it,. As to t,e secon' s%le0 t,ou$, t,e 'ee' o) s%le *%s re$istere' )irst0 but *it, 8no*le'$e o) t,e )irst s%le0 t,en t,e re$istr%tion *%s in b%' )%it,. 3f the second b"yer had no )nowledge of the prior sale when he signed the deed of sale, b"t when he is abo"t to register the deed of sale, he ac!"ired )nowledge of the first sale, wo"ld that ma)e him a b"yer in bad faith$ W,%t is re3uire' un'er Art. 1655 is re$istr%tion in $oo' )%it,. At t,e time o) -er)ection0 si$nin$ or -%yment0 ,e m%y still ,%+e no 8no*le'$e o) t,e -rior s%le but %t t,e time o) re$istr%tion ,e m%y %lre%'y ,%+e 8no*le'$e0 ,ence0 ,e c%nnot be consi'ere' % re$istr%nt in $oo' )%it,. >e m%y not ,%+e % better ri$,t o+er t,e )irst buyer. ;%utist% +s. Sioson 1he owner sold a registered parcel of land to B who did not register, neither did he too) physical possession. After the sale they e,ec"ted a lease agreement in which the b"yer is now the lessor and that the seller became the lessee. /ence, the seller contin"ed to be in possession of the land not as a concept of an owner b"t of a lessee. After the sale and the contract of lease, A sold this parcel of land to C, who also did not register the same, and this time C too) physical possession. #ho between B and C had a better right$ ; *oul' ,%+e % better ri$,t bec%use *,en ; e2ecute' % le%se contr%ct *it, A0 ; is in contem-l%tion o) l%* in -ossession o) t,e -ro-erty0 *,ic, is le$%l -ossession0 ,e ob+iously is t,ere)ore % -ossessor in $oo' )%it,0 t,e )irst *,o too8 -ossession in $oo' )%it,. 7,ou$, C ,%' -,ysic%l -ossession o+er t,e -ro-erty0 ,e is consi'ere' to be t,e one secon' in -ossession. ; t,ere)ore *%s consi'ere' to ,%+e % better ri$,t. Note/ Le$%l -ossession is su))icient to 'etermine %s to *,o ,%+e % better ri$,t bet*een t*o -ersons. C%rumb% +s. CA %ale of a parcel of land to B who too) possession of the land. /owe er, this seller a -"dgment debtor to one of his creditor. Beca"se of a -"dgment in fa or of a creditor C, the parcel of land had become the s"b-ect of an e,ec"tion sale. 1hen the b"yer became C who registered the sale. #ho will ha e a better right between B and C and C had no )nowledge of the first sale$ ; *oul' ,%+e % better ri$,t bec%use t,is -%rcel o) l%n' *%s re$istere' un'er t,e 7orrens System. Art.1655 'oes not %--ly to unre$istere' l%n's. Only t,ose l%n's *,ic, %re

re$istere' un'er t,e 7orrens System c%n be co+ere' by t,e -ro+isions o) Art. 1655. It coul' be notice' t,%t C ,%' re$istere' t,e l%n'0 but t,e s%me is not co+ere' un'er t,e torrens system bec%use0 t,ere is %not,er system o) re$istr%tion o) unre$istere' l%n's. 7,ere is % 'i))erent boo8 co+ere' by t,is 8in' o) re$istr%tion0 ,ence0 Art 1655 *oul' not %--ly. 7,ere)ore0 i) ARt. 1655 *oul' not %--ly0 ; *oul' ,%+e % better ri$,t bec%use t,ere *%s %ctu%l 'eli+ery to ,im. 7,er)ore0 un'er t,e $ener%l rule0 u-on 'eli+ery0 o*ners,i-%sses to t,e buyer. W,en o*ners,i- ,%' -%sse' to t,e buyer *,en t,e -ro-erty *%s sol' in t,e e2ecution s%le0 t,e buyer *oul' not $et %nyt,in$ )rom t,e e2ecution s%le bec%use ,e merely ste-s into t,e s,oes o) t,e .u'$ment 'ebtor. Since t,e .u'$ment 'ebtor ,%' no o*ners,i- o+er t,e l%n' %t t,e time o) s%le0 t,e ,e 'i' not %c3uire o*ners,i- by +irtue o) t,%t s%le. Note/ 7o 'etermine t,%t t,e l%n' is un'er t,e torrens system0 t,e o*ners,i- is -ro+en by 7C7Hs or OC7Hs0 ot,er*ise i) -roo) o) o*ners,i- %re mere t%2 'ecl%r%tions0 it *ill not be consi'ere' %s re$istere' l%n'.

Loss o) t,e t,in$ *,ic, is t,e sub.ect o) % contr%ct o) S%le 3f the thing sold or the ob-ect of the sale is lost or destroyed, who will bear the loss, or who may be held liable for the loss$ Can the b"yer still be compelled to pay the price despite the loss of the thing which was the ob-ect of the sale$ 7,e )irst t,in$ t,%t must be consi'ere' is t,e c%use o) t,e loss bec%use e+en i) t,e seller or t,e buyer is still t,e o*ner0 i) t,e loss *%s 'ue to t,e )%ult o) one o) t,e -%rties0 ,e *oul' eit,er be t,e one to be%r t,e loss or ,e c%n be ,el' li%ble )or t,e loss. :or e2%m-le i) t,e seller *%s %t )%ult resultin$ in t,e loss o) t,e t,in$ %n' ,e *%s still t,e o*ner0 ,e *ill be%r t,e loss. ;ut i) %t t,e time o) t,e loss0 t,e buyer *%s t,e o*ner0 %n' t,e seller *%s %t )%ult0 t,e seller *ill be li%ble )or t,e loss o) t,e t,in$ bec%use ,e *%s %t )%ult. Loss 'ue to )ortuitous e+ent 1he common scenario in the bar e,ams is that the thing is lost d"e to a fort"ito"s e ent, witho"t the fa"lt of the b"yer or the seller, who bears the loss or who can be held liable for the loss$ Another scenario which m"st be considered is when did the loss happen$ 1his !"estion will be rele ant if the loss happen after the perfection. Beca"se if the loss of the thing happened before the perfection, if the loss was d"e to a fort"ito"s e ent$ 3t will be the seller who shall bear the loss, if the seller is the owner. 3n s"ch case, there will be no perfected contract of sale at

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all beca"se there was no ob-ect to tal) abo"t. After the perfection of the sale, who bears the loss$ As % rule0 t,e o*ner be%rs t,e loss. 7,is is not %--lic%ble in s%le o) )un$ible $oo's0 bec%use in suc, s%le0 un'er Art. 15E!0 i) t,ese $oo's %re sol' %t t,e -rice )i2e' %ccor'in$ to *ei$,t0 number or me%sure %n' t,ese $oo's ,%' %lre%'y been *ei$,e'0 counte' or me%sure'0 t,e ris8 o) loss *ill %lre%'y be *it, t,e +en'ee e+en be)ore t,ere is tr%ns)er o) o*ners,i-. Suc, is not correct0 bec%use suc, l%* is relie' u-on t,e ol' ci+il co'e. 7,e Ne* Ci+il Co'e un'er Art. 15E! l%st -%r%$r%-, is %n %men'e' +ersion o) Art 156 o) t,e Ol' Ci+il Co'e. In t,e %men'e' +ersion it *%s -ro+i'e' t,%t S,oul' )un$ible t,in$s be sol' )or % -rice )i2e' %ccor'in$ to *ei$,t0 number or me%sure0 t,e ris8 s,%ll not be im-ute' to t,e +en'ee until t,ey ,%+e been *ei$,e'0 counte' or me%sure'0 %n' 'eli+ere'0 unless t,e l%tter ,%s incurre' in 'el%y. Wit, 'eli+ery0 o*ners,i- -%sses to t,e buyer %n' t,ere)ore0 it is t,e +en'ee *,o s,%ll be%r t,e ris8 o) loss. 7,ere)ore0 t,ere is seem to be no e2ce-tion0 %s )%r %s )un$ible $oo's %re concerne'. & sold a second hand car to 2 for E5+), the agreement between & and 2 was that half of the p"rchase price shall be paid "pon deli ery of the car to 2 and the balance of 1L5) shall be paid in 5 e!"al monthly installments of 15) each. 1he car was deli ered to 2 and & paid the amo"nt of 1L5) to 2. Dess than one month thereafter, the car was stolen from 28s garage with no fa"lt on 28s part and was ne er reco ered. 3s & legally bo"nd to pay the balance of 1L5)$ W,et,er or not E *oul' be le$%lly boun' to -%y *ill 'e-en' on *,o *ill be%r t,e loss. Since t,e c%r *%s stolen0 *oul' t,e buyer be%r t,e loss= Or *oul' t,e seller be t,e one to be%r t,e loss= I) E *oul' ,%+e to be%r t,e loss0 ,e *oul' still be com-elle' to -%y t,e b%l%nce. :rom t,e )%cts0 t,ere *%s %lre%'y 'eli+ery0 t,ere is not,in$ un'er t,e )%cts t,%t *ill s,o* o*ners,i- *%s reser+e'. 7,ere)ore u-on 'eli+ery0 o*ners,i- -%sses to E t,e buyer. Un'er t,e )%cts0 t,ere *%s no )%ult on t,e -%rt o) t,e seller. >ence0 t,e buyer be%rs t,e loss. 7,ere)ore0 E c%n be com-elle' to -%y suc, b%l%nce. %, an American resident of 'anila, abo"t to lea e on a acation, sold his car to B, for *+++ A%&. 1he payment to be made 1+ days after deli ery to :, a third party depositary agreed "pon who shall deli er the car to B "pon receipt by : of the p"rchase price. 3t was stip"lated that ownership be retained by % "ntil deli ery of the car to :. 5 days after deli ery of the car to :, it was destroyed by fire which g"tted the ho"se of :, witho"t the fa"lt of either : or B. 3s b"yer B legally obligated to pay the p"rchase price$ :rom t,e %$reement o) t,e -%rties0 o*ners,i- is ret%ine' by S until t,e 'eli+ery o) t,e c%r. >o*e+er0 un'er t,e )%cts t,e loss ,%--ene' %)ter t,e 'eli+ery o) t,e c%r0 t,ere)ore it is cle%r t,%t o*ners,i- ,%' %lre%'y -%sse' to ; %)ter

'eli+ery o) t,e c%r to I. 7,e o*ner ; t,ere)ore ,%' to be%r t,e loss. Ander what circ"mstance wo"ld a party to a contract of sale who was not the owner at the time of the loss be the one to bear the loss$ 1. I) t,ere is % sti-ul%tion (t%8e note o) 7%bor% C%se#. . W,en o*ners,i- is ret%ine' by t,e seller in or'er to secure -%yment o) t,e -rice )or t,e $oo's sol' (Art. 16!5#. 4. W,en t,e seller is in -ossession but t,e buyer is %t )%ult bec%use o) t,e 'el%y in retrie+in$ t,e $oo's. 5. W,en t,e seller is in -osession0 but o*ners,i- ,%' %lre%'y -%sse' to t,e buyer by constructi+e 'eli+ery0 but t,e seller *ill be%r t,e loss 'ue to t,e sellerHs )%ult. A set of A'GA( was sold to 1abora on installment basis. 4n the day these boo)s were deli ered to the office of Atty. 1abora, the entire bloc) where the office of the latter is located was b"rned together with the A'GA(. Atty 1abora ref"sed to pay the balance despite demand by lawyer8s co. Dawyer8s co therefore filed a case. 1wo defenses were raised 1) res perit domino r"le beca"se there is a stip"lation in the contract that the seller shall retain ownership o er the boo)s "ntil f"ll payment, and if lawyers co was the owner then it sho"ld bear the loss. 3s the arg"ment correct$ No. I) t,ere *%s % sti-ul%tion in t,e contr%ct t,%t o*ners,is,%ll be ret%ine' by l%*yers co until )ull -%yment *%s m%'e0 t,ere *%s %lso % sti-ul%tion t,%t t,e ris8 o) loss s,%ll -ert%in to t,e buyer %t t,e time t,e boo8s *ere 'eli+ere' *,%te+er t,e c%use o) t,e loss. 7,is is %n e2ce-tion to t,e res -erit 'omino rule. Ass"ming there was no stip"lation that the ris) of loss shall pertain to the b"yer "pon deli ery, may the b"yer still be held to answer for the loss$ Un'er Art. 16!50 *,en t,e o*ner reser+e' t,e title to t,e -ro-erty only to secure t,e -%yment o) t,e -rice o) t,e buyer0 t,en by l%*0 ris8 o) loss s,%ll only -ert%in to t,e buyer. 7,is is 8no*n %s % security title. 7,ere)ore0 e+en i) t,e buyer 'i' not %c3uire title u-on 'eli+ery0 ,e be%rs t,e loss. 3f the ob-ect of the sale is in possession of the seller, and the same was lost d"e to fort"ito"s e ent, who will bear the loss$ 1he seller$ Not necess%rily. It *ill be t,e -%rty *,o *%s %t )%ult resultin$ in t,e 'el%y in t,e 'eli+ery o) t,e $oo's. It m%y be t,e buyer or t,e seller. As agreed "pon by the parties, the b"yer sho"ld ha e obtained the goods from the seller yesterday. /owe er, d"e to the fa"lt of the b"yer, he failed to get the goods

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from the sellers place. 1oday all these goods were lost or destroyed d"e to a fort"ito"s e ent. #ho will bear the loss$ Or'in%rily0 t,e buyer *,o *oul' obt%in -ossession )rom t,e seller. At t,%t time t,ere is yet no 'eli+ery bec%use t,e $oo's %re still *it, t,e seller. 7,e o*ner is still t,e seller but t,e o*ner *ill not be%r t,e loss bec%use t,e 'el%y in t,e 'eli+ery *%s 'ue to t,e )%ult o) t,e buyer. 3n another scenario, the goods are still with the seller, b"t it will be the seller who wo"ld bear the loss e en if the b"yer was already the owner. /ow co"ld the b"yer already be the owner if the seller is still in possession of the goods. 1he answer wo"ld be by reason of constr"cti e deli ery. 6hilippine law recogni>es not only physical or act"al b"t also constr"cti e deli ery. 4ne e,ample of constr"cti e deli ery, is the e,ec"tion of a p"blic doc"ment or instr"ment, ownership passed to the b"yer b"t possession is still with the seller. 3f it was the seller who was at fa"lt res"lting in the delay in the deli ery of the goods, of co"rse the b"yer will not bear the loss e en if he was the owner already at the time of the loss.

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