Professional Documents
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UST Golden Notes 2011 - Sales
UST Golden Notes 2011 - Sales
SALES
Q:Whatisasale?
I.INTRODUCTION
A.DEFINITIONOFTHECONTRACTOFSALE
Q:Whatisacontractofsale?
A:Bythecontractofsale,oneofthecontracting
parties obligates himself to transfer the
ownershipofandtodeliveradeterminatething,
and the other to pay therefor a price certain in
moneyoritsequivalent.(Art.1458,NCC)
KINDSOFSALES
Q:Whatarethedifferentkindsofsales?
A:Asto:
1. Natureofthesubjectmatter:
a. Saleofrealproperty;
b. Saleofpersonalproperty
2. Valueofthethingsexchanged:
a. Commutativesale;
b. Aleatorysale
3. Whether the object is tangible or
intangible:
a. Sale of property (tangible or
corporeal);
Note:Atangibleobjectisalsocalled
choseinpossession
Validityordefectofthetransaction:
a. Valid
b. Rescissible
c. Voidable
d. Unenforceable
e. Void
Legalityoftheobject:
a. Licitobject
b.
4.
5.
6.
7.
8.
9.
b. Illicitobject
Presenceorabsenceofconditions:
a. Absolute
b. Conditional
Wholesaleorretail:
a. Wholesale
b. Retail
Proximateinducementforthesale:
a. Salebydescription
b. Salebysample
c. Salebydescriptionandsample
Whenthepriceistendered:
a. Cashsale
b. Saleoninstallmentplan
ASTOPRESENCEORABSENCEOFCONDITION
ABSOLUTESALE
Q:Whenisasaleabsolute?
Q:Whenisadeedofsaleconsideredabsolutein
nature?
A:Adeedofsaleisconsideredabsoluteinnature
where there is neither a stipulation in the deed
that title to the property sold is reserved in the
selleruntilthefullpaymentoftheprice,norone
givingthevendortherighttounilaterallyresolve
the contract the moment the buyer fails to pay
withinafixedperiod.
CONDITIONALSALE
Q:Whenisasaleconditional?
A:Itisconditionalwherethesalecontemplatesa
contingency,andingeneral,wherethecontractis
subject to certain conditions, usually in the case
of the vendee, the full payment of the agreed
purchasepriceandinthecaseofthevendor,the
fulfillmentofcertainwarranties.(DeLeon,p.15)
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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A:
CONDITIONALSALE
Onewheretheselleris
grantedtherightto
unilaterallyrescindthe
contractpredicatedon
thefulfillmentornon
fulfillment,asthecase
maybe,ofthe
prescribedcondition.
Contractexecuted
betweenthesellerand
thebuyer
ABSOLUTESALE
Onewherethetitleto
thepropertyisnot
reservedtotheselleror
ifthesellerisnot
grantedtherightto
rescindthecontract
basedonthefulfillment
ornonfulfillment,asthe
casemaybe,ofthe
prescribedcondition.
Contracts,firstthe
contracttosell(whichis
conditionalor
preparatorysale)and
second,thefinaldeedof
saleortheprincipal
contractwhichis
executedafterfull
paymentofthepurchase
price
Q:Whatistheeffectofthenonperformanceof
the condition or if the condition did not take
place?
Q:Inasalewithassumptionofmortgage,isthe
assumption of mortgage a condition without
which there will be no perfected contract of
sale?
A:Yes.Insaleswithassumptionofmortgage,the
assumption of mortgage is a condition to the
sellers consent so that without approval by the
mortgagee, no sale is perfected (Ramos v. Court
ofAppeals,G.R.No.108294Sept.15,1997)
230
B.ESSENTIALREQUISITES
OFACONTRACTOFSALE
Q:Whataretheelementsofacontractofsale?
A:ANE
1. Accidental elements dependent on
partiesstipulations;Examples:
a. Conditions
b. Interest
c. time&placeofpayment
d. penalty
3. Essentialelementsforvalidity:
a. Consent
b. Determinatesubjectmatter
c. Consideration
Q:Whatistheeffectand/orconsequenceofthe
absenceofconsentoftheownerinacontractof
saleofsaidproperty?
FORMALITIESREQUIRED
Q:Isthereaformalrequirementforthevalidity
ofacontractofsale?
A:
GR: No form is required. It is a consensual
contract.(Pineda,p.78)
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
Q: Are there instances where the Statute of
Frauds is not essential for the validity of a
contractofsale?
A:Yes.
1. When there is a note or memorandum
inwritingandsubscribedtobytheparty
orhisagent(containsessentialtermsof
thecontract);
2. When there has been partial
performance/execution (seller delivers
with the intent to transfer title/receives
price);
3. When there has been failure to object
to presentation of evidence aliunde as
to the existence of a contract without
beinginwritingandwhichiscoveredby
theStatuteofFrauds;
4. When sales are effected through
electroniccommerce.(Villanueva,p.92)
C.STAGESOFACONTRACTOFSALE
A:
1. Negotiation/Policitation
2. Perfection
3. Consummation
1.NEGOTIATION/PREPARATORY
A.OFFER
Q:Whataretherulesintheconceptionstage
abouttheoffer?
A:
OFFERIS
RULE
FLOATED
ANDITIS:
Offeris
floated
Priortoacceptance,maybe
withdrawnatwillbyofferorbutno
authoritytomodifyit
Witha
period
Mustbeacceptedwithintheperiod,
otherwise,extinguishedattheendof
periodandmaybewithdrawnatwill
byofferorbutmustnotbearbitrary,
otherwise,liablefordamages
Witha
condition
Extinguishedbyhappening/non
happeningofcondition
without
period/
condition
Continuestobevaliddependingupon
circumstancesoftime,placeand
person
Witha
counter
offer
Originalofferisextinguished
B.OPTIONCONTRACT
Q:Whatisanoptioncontract?
Q:Whatisthenatureofanoptioncontract?
A:Itisapreparatorycontractinwhichoneparty
grants to another, for a fixed period and at a
determined price, the privilege to buy or sell, or
todecidewhetherornottoenterintoaprincipal
contract. It binds the party who has given the
option not to enter into the principal contract
with any other person during the period
designated, and within that period, to enter into
suchcontractwiththeonewhomtheoptionwas
granted, if the latter should decide to use the
option.Itisaseparateanddistinctcontract.
Note:Iftheoptionisperfected,itdoesnotresultin
the perfection or consummation of the sale. (Diaz,
p.7)
Q:Whatistheperiodwithinwhichtoexercise
theoption?
A:
1. Withinthetermstipulated
2. Ifthereisnostipulation,thecourtmay
fixtheterm
Notes:Anactionforspecificperformancetoenforce
theoptiontopurchasemustbefiledwithin10years
fromthetimethecauseofactionaccrues.
The implied renewal of the lease on a monthto
monthbasisdidnothavetheeffectofextendingthe
life of the option to purchase which expired at the
endoftheoriginalleaseperiod.Thelessoriscorrect
inrefusingtosellonthegroundthattheoptionhad
expired.(2001BarQuestion)
Q:Howisanoptionexercised?
A:Anoticeofacceptancemustbecommunicated
toofferorevenwithoutactualpaymentaslongas
paymentisdeliveredintheconsummationstage.
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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Q:Whatistheeffectofaseparateconsideration
inanoptioncontract?
A:
1. Withseparateconsideration:
a. Contractisvalid
b. Offeror cannot withdraw offer
untilafterexpirationoftheoption
c. Is subject to rescission & damages
butnotspecificperformance
2. Withoutseparateconsideration:
a. the option contract is not deemed
perfected
b. offer may be withdrawn at any
timepriortoacceptance
Inwhichcase,iftheofferordoesnotperformhis
obligationsundertheperfectedcontract,heshall
be liable for all consequences arising from the
breach thereof based on any of the available
remedies such as specific performance, or
rescissionwithdamagesinbothcases.
C.RIGHTOFFIRSTREFUSAL
Q:Whatistherightoffirstrefusal?
Note:Adeedofsaleexecutedinfavorofa3rdparty
who cannot be deemed a purchaser in good faith,
and which is in violation of the right of first refusal
grantedtotheoptioneeisvalidbutrescissible.(Arts.
1380,1381[1])
232
Q:NDCandFirestoneenteredintoacontractof
lease wherein it is stipulated that Firestone has
the right of first refusal to purchase the leased
property "should lessor NDC decide to sell the
same. After the rumor that NDC will transfer
thelottoPUP,Firestoneinstitutedanactionfor
specific performance to compel NDC to sell the
property in its favor. PUP moved to intervene
arguing that the Memorandum issued by then
President Aquino ordered the transfer of the
whole NDC compound to the Government,
which in turn would convey it in favor of PUP.
CanFirestoneexerciseitsrightoffirstrefusal?
A:
a. The action filed by the lessee, for both
rescission of the offending sale and
specificperformanceoftherightoffirst
refusal which was violated, should
prosper.Therulingin(EquatorialRealty
Development, Inc. v. Mayfair Theater,
Inc.,G.R.No.106063,Nov.21,1996),a
case with similar facts, sustains both
rightsofactionbecausethebuyerinthe
subsequent sale knew the existence of
rightoffirstrefusal,hence,inbadfaith.
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
No. 109125, Dec. 2, 1994). The court
ruledthattherightoffirstrefusalisnot
foundeduponacontractbutonaquasi
delictual relationship covered by the
principlesofhumanrelationsandunjust
enrichment (Art 19, et seq. Civil Code).
Hence,theonlyactionthatwillprosper
according to the Supreme Court is an
action for damages in a proper forum
forthepurpose.(1998BarQuestion)
Note:Theofferofthepersoninwhosefavortheright
offirstrefusalwasgivenmustconformwiththesame
termsandconditionsasthosegiventotheofferee.
Q:AndresleasedhishousetoIrisforaperiodof
2years,attherateofP25,000monthly,payable
annuallyinadvance.Thecontractstipulatedthat
it may be renewed for another 2year period
upon mutual agreement of the parties. The
contractalsograntedIristherightoffirstrefusal
topurchasethepropertyatanytimeduringthe
lease, if Andres decides to sell the property at
the same price that the property is offered for
saletoathirdparty.Twentythreemonthsafter
executionoftheleasecontract,Andressoldthe
housetohismotherwhoisnotathirdparty.Iris
filedanactiontorescindthesaleandtocompel
Andres to sell the property to her at the same
price. Alternatively, she asked the court to
extend the lease for another two years on the
sameterms.
Q: Can Iris seek rescission of the sale of the
propertytoAndresmother?
A: Iris can seek rescission because pursuant to
EquatorialRealtyCo.v.MayfairTheaterrescission
isareliefallowedfortheprotectionofoneofthe
contracting parties and even third persons from
all injury and damage the contract of sale may
causeortheprotectionofsomeincompatibleand
preferredright.
Note:Itisapplicableonlytoexecutorycontractsand
not to contracts which are totally or partially
performed.
Q:Maytherightoffirstrefusalbewaived?
Inarightoffirstrefusal,whiletheobjectmaybe
determinate, the exercise of the right would be
dependent not only on the grantors eventual
intentiontoenterintoabindingjuridicalrelation
with another but also on terms, including the
price,thatareyettobefirmedup.(Diaz,p.54)
OPTION
CONTRACT
Principalcontract;
standsonitsown
Needs separate
consideration
Subjectmatter&price
mustbevalid
A:No,theextensionoftheleaseshouldbeupon
the mutual agreement of the parties. (2008 Bar
Question)
Q:Isitnecessarythattherightoffirstrefusalbe
embodiedinawrittencontract?
A:Yes,thegrantofsuchrightmustbeclearand
express.
Notconditional
Notsubject tospecific
performance
RIGHTOFFIRST
REFUSAL
Accessory;cannotstand
onitsown
Doesnotneedseparate
consideration
Theremustbesubject
matterbutpricenot
important
Conditional
Subjecttospecific
performance
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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D.POLICITATION/MUTUALPROMISETOBUY
ANDSELL/
Q:Whatispolicitation?
A:
GR: It is deemed perfected at the moment
there is meeting of minds upon the thing
which is the object of the contract and upon
theprice.(Art.1475,par.1)
XPN:Whenthesaleissubjecttoasuspensive
conditionbyvirtueoflaworstipulation.
Q: Spouses Raet and Mitra negotiated with
Gatusaboutthepossibilityofbuyinghisrightsto
certainunitsatasubdivisiondevelopedbyPhil
Ville for them to be qualified to obtain loans
fromGSIS.TheypaidanamountforwhichGatus
issued them receipts in her own name. GSIS
disapproved their loan application. PhilVille
advisedthemtoseekothersourcesoffinancing.
In the meantime, they were allowed to remain
inthesubjectpremises.Isthereaperfectedand
enforceable contract of sale or at least an
agreement to sell over the disputed housing
units?
A:None.Therewasnocontractofsaleperfected
between the private parties over the said
property,therebeingnomeetingofthemindsas
toterms,especiallyonthepricethereof.Atbest,
only a proposed contract to sell obtained which
did not even ripen into a perfected contract due
at the first instance to private respondents'
inability to secure approval of their GSIS housing
loans. As it were, petitioners and private
respondents have not hurdled the negotiation
phaseofacontract,whichistheperiodfromthe
time the prospective contracting parties indicate
234
A:No.Thereisaperfectedcontractofsaledueto
the second deed of sale in this case. The basic
characteristic of an absolutely simulated or
fictitiouscontractisthattheapparentcontractis
not really desired or intended to produce legal
effectsoralterthejuridicalsituationoftheparties
in any way. However, in this case, the parties
already undertook certain acts which were
directed towards fulfillment of their respective
covenantsundertheseconddeed,indicatingthat
they intended to give effect to their agreement.
Further, the fact that Severino executed the two
deeds, primarily so that Henry could eject the
tenant and enter into a loan/mortgage contract
with Philam Life, is a strong indication that he
intendedtotransferownershipofthepropertyto
Henry.Forwhy(HernandoR.Penalosav.Severino
Santos,G.R.No.133749,Aug.23,2001)
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
Q:Whenisanauctionsaleperfected?
Q:Whenisasaleofforeignexchangeconsidered
perfected?
A:Havingsteppedintotheshoesofthedeceased
with respect to the said contract, and being the
oneswhocontinuedtopaytheinstallmentsfrom
their own funds, As heirs became the lawful
ownersofthesaidlotinwhosefavorthedeedof
absolute sale should have been executed by
vendor PDS. (Dawson v. Register of Deeds of
QuezonCity,G.R.No.120600Sept.22,1998)
D.OBLIGATIONSCREATED
OBLIGATIONSOFTHEBUYER
Q:Whataretheobligationsofthebuyer?
A:
1. Paymentoftheprice
GR:Sellerisnotboundtodeliverunless
thepurchasepriceispaid
XPN: A period of payment has been
fixed
2. Acceptdeliveryofthingsold
3. Payforexpensesofdelivery
Q:Whataretheotherobligationsofthebuyer?
A:
1. To take care of the goods without the
obligation to return, where the goods
are delivered to the buyer and he
rightfullyrefusestoaccept;
Note:Thegoodsinthebuyerspossession
areatthesellersrisk.
2.
3.
To be liable as a depositary if he
voluntarilyconstitutedhimselfassuch;
To pay interest for the period between
delivery of the thing and the payment
ofthepriceinthefollowingcases:
a. shouldithavebeenstipulated;
b. shouldthethingsoldanddelivered
producesfruitsorincome;or
c. should he be in default, from the
time of judicial or extrajudicial
demand for the payment of the
price.
OBLIGATIONSOFTHESELLER
Q:Whataretheobligationsoftheseller?
A:DDTWTP
1. Deliverthethingsold;
2. Deliver fruits & accessions/accessories
accruingfromperfectionofsale;
3. Transfertheownership;
4. Warranties;
5. Takecareofthething,pendingdelivery,
withproperdiligence;
6. Payfortheexpensesofthedeedofsale
unless there is a stipulation to the
contrary
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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2.
E.CHARACTERISTICSOFACONTRACTOFSALE
A:
1. Consensual
2. Bilateral
3. GR:Commutative
F.DISTINCTIONSOFTHECONTRACTOFSALE
WITHOTHERCONTRACTS
Q:DistinguishSalefromthefollowing:
1. Donation.
SALE
DONATION
Onerous
Consensual
Gratuitous/onerous
Formalcontract
LawonSales
LawonDonation
236
Barter
SALE
BARTER
Considerationisgiving
Considerationis
ofmoneyaspayment
givingofathing
Ifconsiderationconsistspartyinmoney&partlyby
thinglookatmanifestintention;
IfintentionisnotclearArt.1468
Valueofthingismore
Valueofthingisequal
thanamountofmoney=
orlessthanamountof
Barter
money=Sale
Bothare governedbylawonsales
3.
AgencytoSell
SALE
Buyerpaysforprice
ofobject
Buyerbecomes
ownerofthing
Sellerwarrants
Notunilaterally
revocable
Sellerreceivesprofit
Realcontract
AGENCYTOSELL
Agentnotobligedtopay
forprice;must
accountforthe
proceedsofthesale.
Principalremainsthe
ownerevenifthe
objectdeliveredto
agent
Agentassumesnopersonal
liabilityaslongas
withinauthoritygiven
Mayberevoked
unilaterallyevenw/o
ground
Agentnotallowedtoprofit
Personalcontract
4.
DacionenPago
SALE
DACIONENPAGO
Nopreexisting
credit
Contractwherepropertyis
alienatedtoextinguishpre
existingcredit/debt
Buyerseller
relationship
Novatescreditordebtor
relationshipintosellerbuyer
5.
Lease
SALE
Obligationtoabsolutely
transferownershipof
thing
Considerationistheprice
Sellerneedstobeownerof
thingtotransfer
ownership.
Note:Leasewithoptionto
buyreallyacontractof
salebutdesignatedas
leaseinname.
LEASE
Useofthingisfor
specifiedperiodonly
withobligationto
return
Considerationisthe
rental
Lessorneednotbe
owner
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
G.CONTRACTTOSELL
Q:Whatisacontracttosell?
A: It is one form of conditional sale where
ownership or title is retained by the seller until
thefulfillmentofapositivesuspensivecondition,
normally the payment of the purchase price by
thebuyerinthemanneragreedupon.(Gomezv.
CA,et.al.,G.R.120747,Sept.21,2000)
Note:Conditionalor
preparatorysale
Thereisonlyone
contractexecuted
2.Thedeedofabsolute
betweenthesellerand
sale
thebuyer.
Note:Theprincipal
contractisexecuted
afterfullpaymentofthe
purchaseprice.
Paymentasacondition
Fullpaymentofthe
priceisapositive
Nonpaymentofthe
suspensivecondition.
priceisaresolutory
Note:Failuretofully
condition.Vendorloses
paythepriceisnota
ownershipoverthe
breachbutanevent
propertyandcannot
thatpreventsthe
recoverituntiland
obligationofthevendor
unlessthecontractis
toconveytitlefrom
resolvedorrescinded.
becomingeffective.
Remediesavailable
1. Specific
1. Resolution
2. Performance
2. Damages
3. Rescission
4. Damages
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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Q:Whataretheinstanceswhenwhatisinvolved
isacontracttosell?
A:
1. Wheresubjectmatterisindeterminate
2. Saleoffuturegoods
3. Stipulation that deed of sale &
corresponding certificate of sale would
beissuedonlyafterfullpayment
II.PARTIESTOACONTRACTOFSALE
Q:Whoarethepartiestoacontractofsale?
A:
1. Selleronewhosellsandtransfersthe
thingandownershiptothebuyer
2. Buyer one who buys the thing upon
payment of the consideration agreed
upon
A.CAPACITYOFTHEPARTIES
Q:Whomayenterintoacontractofsale?
A:
GR:Anypersonwhohascapacitytocontract
or enter into obligations, may enter into a
contractofsale,whetheraspartyselleroras
partybuyer.
XPN:
1. Minors, insane and demented persons
and deafmutes who do not know how
towrite
2. Persons under a state of drunkenness
orduringhypnoticspell
3. Husband and wife sale by and
betweenspouses
Note:Contractsofsaleenteredbysuchlegally
incapacitated persons are merely voidable,
subject to annulment or ratification. However,
the action for annulment cannot be instituted
by the person who is capacitated since he is
disqualified from alleging the incapacity of the
personwithwhomhecontracts.
However,statusofprohibitedsalesbetween
spousesisnotmerelyvoidable,butnulland
void.
XPNtoXPN:
238
a.
whenaseparationofpropertywas
agreed upon in the marriage
settlements;or
b. when there has been a judicial
separation of property agreed
uponbetweenthem
B.ABSOLUTEINCAPACITY
Q:Whoarethoseabsolutelyincapacitatedto
enterintoacontractofsale?
A:
1. Unemancipatedminors(Art.1327,NCC);
2. Insaneordementedpersons,anddeaf
mutes who do not know how to write
(Art.1327,NCC)
A:
GR:heincapacitatedpersonisnotobligedto
makeanyrestitution.
XPN:insofarashehasbeenbenefitedbythe
thing or price received by him. (Art. 1399,
NCC)
C.RELATIVEINCAPACITY
A:
1. Spouses(Art.1490,NCC)
2. Agents, Guardians, Executors and
Administrators, Public Officers and
Employees, Court Officers and
Employees, and others specially
disqualifiedbylaw.(Art.1491,NCC)
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
Q:Whatisthestatusofthefollowingcontracts
ofsale?
A:
1. Thatenteredintobyminors:
a. Merely voidable, subject to
annulmentorratification
b. Action for annulment cannot be
instituted by the person who is
capacitatedsinceheisdisqualified
from alleging the incapacity of the
person with whom he contracts
(withpartialrestitutioninsofaras
the minor is benefited) where
necessaries are sold and delivered
toaminororotherpersonwithout
capacity to act, he must pay a
reasonableprice(Art.1489)
2. Saleby&betweenspouses(Art.1490):
a. Statusofprohibitedsalesbetween
spouses:
GR:Nullandvoid
ii.
b.
When a separation of
property was agreed upon in
themarriagesettlements;or
When there has been a
judicialseparationofproperty
agreeduponbetweenthem
Reasons:
i. Preventdefraudingcreditors
ii. Avoid
situation
where
dominant spouse takes
advantage over the weaker
spouse
iii. Avoid circumvention on
prohibition of donation
betweenspouses
rd
Contractofsalewith3 parties:
GR: Under the law on sales, it
would seem that a spouse may,
without the consent of the other
spouse,
enter
into
sales
transactions in the regular or
normal pursuit of their profession,
vocationortrade.(inrelationwith
Art.73,FamilyCode)
3.
Q:Whohastherighttoassailthevalidityofthe
transactionbetweenspouses?
A:Thefollowingaretheonlypersonswhocan
questionthesalebetweenspouses:
1. The heirs of either of the spouses who
havebeenprejudiced;
2. Priorcreditors;and
3. The State when it comes to the
paymentofthepropertaxesdueonthe
transactions
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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Q:Whoarethepersonswithrelativeincapacitytobethevendeeinacontractofsale?
A:AGECOP
RELATIVELY
INCAPACITATEDTOBUY
PROPERTIESINVOLVED
Propertyentrustedtothemfor
administrationorsale
XPN:Whenprincipalgavehis
consent
Propertyofthewardduring
periodofguardianship
Agents
STATUSOFSALE
Voidable
Note:Contractsenteredby
guardianinbehalfofwardare
rescissibleifwardsufferslesion
bymorethanofthevalueof
property.
Guardian
Executorsand
administrators
Propertyoftheestateunder
administration
Courtofficersand
employees
Propertyandrightsinlitigationor
leviedupononexecutionbefore
thecourtundertheirjurisdiction
Othersspecially
disqualifiedbylaw
Pubicofficersand
employees
PropertyoftheStateentrustedto
themforadministration
Void
RATIFICATION
Canberatifiedafterthe
inhibitionhasceased
Reason:theonlywrongthat
subsistsistheprivatewrong
totheward,principalor
estate;andcanbecondoned
bytheprivateparties
themselves
Cannotberatified
Reason:Itisaprivatewrong.
(Villanueva,LawonSales,p.
3031)
Note:Prohibitionsareapplicabletosalesinlegalredemption,compromisesandrenunciations.
InthecaseofRubiasv.Batiller(51SCRA120),itsoughttodeclarethedifferenceinthenullitybetweencontracts
enteredintobyguardians,agents,administratorsandexecutors,fromthecontractsenteredintobyjudges,judicial
officers,fiscalsandlawyers.
240
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
D.SPECIALDISQUALIFICATIONS
Q:Whoarethosepersonsspeciallydisqualified
bylawtoenterintocontractsofsale?
A:ALIENUnOS
1. ALIENswhoaredisqualifiedtopurchase
privateagriculturallands(Art.XIISecs.3
&7)
2. Unpaid seller having a right of lien or
havingstoppedthegoodsintransitu,is
prohibitedfrombuyingthegoodseither
directlyorindirectlyintheresaleofthe
same at public/private sale which he
maymake(Art.1533[5];Art.1476[4])
3. The Officer holding the execution or
deputy cannot become a purchaser or
be interested directly or indirectly on
any purchase at an execution. (Sec. 21
Rule39,RulesofCourt)
4. In Sale by auction, seller cannot bid
unless notice has been given that such
saleissubjecttoarighttobidinbehalf
oftheseller.(Art.1476)
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
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III.SUBJECTMATTEROFSALE
A.REQUISITESOFAVALIDSUBJECTMATTER
Q:Whataretherequisitesofaproperobjectof
sale?
A:
1. Things
a. Determinateordeterminable
b. Lawful (licit), otherwise contract is
void
c. Should not be impossible (within
thecommerceofmen)
2. Rights
GR:Mustbetransmissible.
XPN:
a. Futureinheritance
b. Service cannot be the object of
sale. They are not determinate
things and no transfer of
ownershipisavailablebutitcanbe
theobjectofcertaincontractssuch
uas contract for a piece of work.
(Pineda,Sales,2002ed.,p.13)
Q:RodriguezfirstpurchasedaportionofaLotA
consisting of 345 square meters located in the
middle of Lot B, which has a total area of 854
square meters, from Juan. He then purchased
another portion of said lot. As shown in the
receipt, the late Juan received P500.00 from
Rodriguez as "advance payment for the
residential lot adjoining his previously paid lot
onthreesidesexceptingonthefrontage.Juans
heirs now contests the validity of the
subsequent sale, alleging that the object is not
determinateordeterminable.Decide.
242
Note:Wherelandissoldforalumpsumandnotso
much per unit of measure or number, the
boundaries of the land stated in the contract
determinetheeffectsandscopeofthesale,notthe
areathereof.Thevendorsareobligatedtodeliverall
the land included within the boundaries, regardless
of whether the real area should be greater or
smaller than that recited in the deed. This is
particularly true where the area is described as
"humigitkumulang,"thatis,moreorless.(Semirav.
CA,G.R.No.76031,Mar.2,1994)
Q:Canrightsbetheobjectsofsale?
A:Yes,iftheyaretransmissible.(Art.1347)
B.PARTICULARKINDS
Q:Whatmaybeobjectsofsale?
A:
1. Existing Goods owned/ possessed by
selleratthetimeofperfection
3.
4.
SaleofUndividedInterestorShare
a. Sole owner may sell an
undividedinterest.(Art.1463)
Ex.Afractionorpercentageof
suchproperty
b. Saleofanundividedshareina
specific mass of fungible
goods makes the buyer a co
owner of the entire mass in
proportion to the amount he
bought.(Art.1464)
c. A coowner cannot sell more
than his share (Yturralde v.
CA)
SaleofThingsinLitigation
a. Sale of things under litigation
isrescissibleifenteredintoby
the defendant , without the
approvalofthelitigantsorthe
court(Art.1381)
b. Norescissionisallowedwhere
the thing is legally in the
rd
possession of a 3 person
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
5.
6.
IV.OBLIGATIONOFTHESELLER
TOTRANSFEROWNERSHIP
Q:Shouldthesellerbetheowneratthetimeof
perfectionofthecontract?
A:
GR:No.Sellermusthavetherighttotransfer
ownership at the time of delivery or
consummation stage. He need not be the
owner at the time of perfection of the
contract.
XPN:Foreclosuresalewhereinthemortgagor
shouldbetheabsoluteowner.
A.SALEBYAPERSONWHODOESNOTOWNTHE
THINGSOLD
Q:Whatisthestatusofasalebyapersonwho
doesnotownthethingsubjectofthesale?
A:Itdependsuponthestageofthesale.
1. When seller is not owner at perfection
stagethesaleisvalid.
Ownershipofthesubjectmatterbythe
seller at this stage is not an essential
requirementforthevalidityofsale.Itis
necessary at the time of delivery.
Hence,avalidcontractofsalecancover
subjectmatterthatisnotyetexistingor
even a thing having only a potential
existence at the time of perfection; or
even a thing subject to a resolutory
condition.
Note:Ifthesellerlateracquirestitlethereto
anddeliversit,titlepassesbyoperationof
law.
2.
Note:Nemodatquodnonhabetyou
cannotgivewhatyoudonothave,properly
applicabletotheconsummationofasale.
A:
GR: The buyer requires no better title to the
goods than the seller had; caveat emptor
(buyerbeware).
XPN:
1. Estoppel when the owner of the
goodsisbyhisconductprecludedfrom
denyingthesellersauthoritytosell
2. When the contrary is provided for in
recordinglaws
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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3.
4.
5.
6.
7.
Whenthesaleismadeunderstatutory
power of sale or under the order of a
courtofcompetentjurisdiction
When the sale is made in a merchants
store in accordance with the Code of
Commerceandspeciallaws
When a person who is not the owner
sells and delivers a thing, and
subsequentlyacquiredtitlethereto
When the seller has a voidable title
whichhasnotbeenavoidedatthetime
ofthesale
Salebycoownerofthewholeproperty
oradefiniteportionthereof
Specialrightsofunpaidseller
8.
A:
1. Sale of a thing having potential
existence(Art.1461,NCC)
2. Saleoffuturegoods(Art.1462,NCC)
3. Contract for the delivery at a certain
price of an article, which the seller in
the ordinary course of business
manufactures/procuresforthegeneral
market,whetherthesameisonhandat
thetimeornot(Art.1467,NCC)
B.SALEBYAPERONHAVINGAVOIDABLETITLE
Q:Whatistheeffectofasalemadebytheseller
withvoidabletitleovertheobject?
A:
1. Perfectionstage:validbuyeracquires
titleofgoods
2. Consummationstage:validIfthetitle
hasnotyetbeenavoidedatthetimeof
saleandthebuyermustbuythegoods
underthefollowingconditions:
a. Ingoodfaith
b. Forvalue
c. Withoutnoticeofsellersdefectof
title
EMPTIOREISPERATAE
Saleofthinghaving
potentialexistence
Uncertaintyisw/regard
toquantity&quality
Contractdealsw/future
thing
Saleisvalidonlyifthe
expectedthingwill
exist.
244
EMPTIOSPEI
Saleofmerehopeor
expectancy
Uncertaintyisw/regard
toexistenceofthing
Contractdealsw/
presentthinghope
orexpectancy
Saleisvalideventhough
expectedthingdoes
notcomeinto
existenceaslongas
thehopeitselfvalidly
existed.(eg.lotto)
Note:ThepresumptionisEmptioReiSperatae
V.PRICE
A.MEANINGOFPRICE
Q:Whatisaprice?
B.REQUISITESFORAVALIDPRICE
Q:Whataretherequisitesofprice?
A:Mustbe:
1. Real
2. Inmoneyoritsequivalent
3. Certain or ascertainable at the time of
theperfectionofthecontract
C.HOWPRICEISDETERMINED
Q:Whenispricecertain?
A:
1. Ifthereisastipulation
2. If it be with reference to another thing
certain
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
3.
4.
Note:Ifthepriceisbasedonestimates,itis
uncertain.
D.GROSSINADEQUACYOFTHEPRICE
Q:Whatistheeffectofgrossinadequacyof
price?
A:
GR:Itdoesnotaffectthevalidityofthesaleif
itisfixedingoodfaithandwithoutfraud
XPN:CoRDS
1. If Consent is vitiated (may be annulled
orpresumedtobeequitablemortgage)
2. If the parties intended a Donation or
someotheract/contract
3. IfthepriceissolowastobeShocking
totheconscience
4. If in the event of Resale, a better price
canbeobtained
Note:
GR:Thevalidityofthesaleisnotnecessarilyaffected
wherethelawgivestheownertherighttoredeem
because the lesser the price, the easier it is for the
ownertoeffectredemption.
XPN:Whilethereisnodisputethatmereinadequacy
ofthepricepersewillnotsetasideajudicialsaleof
realproperty,nevertheless,wheretheinadequacyof
the price is purely shocking to the conscience, such
thatthemindrevoltsatitandsuchthatareasonable
manwouldneitherdirectlyorindirectlybelikelyto
consenttoit,thesamewillbesetaside.(Cometav.
CA351SCRA294)
Q:Whatistheeffectifthepriceissimulated?
A:
GR:Contractofsaleisvoid.
XPN:Theactmaybeshowntohavebeenin
realityadonationorsomeotheractor
contract.
Q:Whatisconsideredreasonableprice?
A:Generallythemarketpriceatthetimeand
placefixedbythecontractorbylawforthe
deliveryofthegoods.
A:None.Itisnottheactofpaymentofpricethat
determines the validity of a contract of sale.
Payment of the price has nothing to do with the
perfection of the contract, as it goes into the
performance of the contract. Failure to pay the
consideration is different from lack of
consideration. Failure to pay such results in a
righttodemandthefulfillmentorcancellationof
theobligationunderanexistingvalidcontract.On
theotherhand,lackofconsiderationpreventsthe
existence of a valid contract. (Sps. Bernardo
Buenaventura and Consolacion Joaqui v. CA, GR
No.126376,Nov.20,2003)
Q:Ispaymentofthepurchasepriceessentialto
transferownership?
A:Unlessthecontractcontainsastipulationthat
ownership of the thingsold shall not pass to the
purchaser until he has fully paid the price,
ownershipofthethingsoldshallbetransferredto
the vendee upon the actual or constructive
deliverythereof.(Diaz,p.48)
E.WHENNOPRICEISAGREEDUPONBYTHE
PARTIES
Q:Whatistheeffectoffailuretodeterminethe
price?
A:
1. Where contract is executory
ineffective
2. Where the thing has been delivered to
and appropriated by the buyer the
buyer must pay a reasonable price
therefore
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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F.MANNEROFPAYMENT
A:
Q:Whatistheeffectoffailuretodeterminethe
price?
A:
1. Where contract is executory
ineffective
2. Where the thing has been delivered to
and appropriated by the buyer the
buyer must pay a reasonable price
therefore
246
FAILURETOPAY
LACKOF
CONSIDERATION
CONSIDERATION
Astovalidityofcontractofsale
Itisnottheactofpayment
ofpricethatdetermines
thevalidityofacontractof
sale.
Lackofconsideration
preventsthe
Note:Paymentoftheprice
existenceofavalid
hasnothingtodowiththe
contract.
perfectionofthecontract.
Instead,itgoesintothe
performanceofthe
contract.
Astoresultantright
Failuretopaythe
Thecontractofsaleis
considerationresultsina
nullandvoidand
righttodemandthe
producesnoeffect
fulfillmentorcancellation
whatsoever
oftheobligationunderan
existingvalidcontract.
G.EARNESTMONEYVISAVISOPTIONMONEYY
OPTIONMONEY
Q:Whatisanoptionmoney?
A:Thedistinctconsiderationincaseofanoption
contract. It does not form part of the purchase
price hence, it cannot be recovered if the buyer
didnotcontinuewiththesale.
Q:Whenispaymentconsideredoptionmoney?
A:Paymentisconsideredoptionmoneywhenitis
given as a separate and distinct consideration
from the purchase price. Consideration in an
option contract may be anything or undertaking
ofvalue.
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
EARNESTMONEY
Q:Whatisanearnestmoneyorarras?
A:Itformspartofthepurchasepricewhichmay
bedeductedfromthetotalprice.Italsoservesas
a proof of the perfection of the contract of sale.
The rule is no more than a disputable
presumption and prevails only in the absence of
contrary or rebuttable evidence. (PNB v CA, 262
SCRA464,1996)
Note:Optionmoneymaybecomeearnestmoneyif
thepartiessoagree.
A:
OPTIONMONEY
Moneygivenas
distinct
considerationfor
anoptioncontract
Appliestoasale
notyetperfected
Prospectivebuyeris
notrequiredto
buy.
Ifbuyerdoesnot
decidetobuy,it
cannotbe
recovered.
EARNESTMONEY
Formspartofthe
purchaseprice
Givenonlywhenthereis
alreadyasale
Whengiven,thebuyeris
boundtopaythe
balance.
Ifsaledidnotmaterialize,
itmustbereturned.
(Villanueva,p.87,
Pineda,p.77)
Simeonsuddenlyhasachangeofheart,claiming
that the deal is disadvantageous to him as he
hasfoundoutthatthepropertycanfetchthree
times the agreed purchase price. Bert seeks
specific performance but Simeon contends that
he has merely given Bert an option to buy and
nothing more and offers to return the option
moneywhichBertrefusestoaccept.
A:
1. Bert's action for specific performance
will prosper because there was a
binding agreement of sale, not just an
optioncontract.Thesalewasperfected
upon acceptance by Simeon of 10% of
the agreed price. This amount is in
reality an earnest money which, under
Art. 1482, "shall be considered as part
of the price and as proof of the
perfection of the contract." (Topacio v.
CA, G.R. No. 102606, July 3, 1992;
VillongcoRealtyv.Bormaheco,G.R.No.
L26872,July25,1975).
VI.FORMATIONOFCONTRACTOFSALE
Note:seeIntroduction,StagesofContractofSale
pp.230234
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VII.TRANSFEROFOWNERSHIP
A.MANNEROFTRANSFER
Q:Whatistheeffectofdelivery?
A:
GR:Title/ownershipistransferred
XPN:Contraryisstipulatedasinthecaseof:
1. Pactum reservatii in domini
agreement that ownership will remain
with seller until full payment of price
(Contracttosell);
2. Saleonacceptance/approval;
3. Saleonreturn;
4. There is implied reservation of
ownership;
Note:Sellerbearsexpensesofdelivery.
Theregistrationcertificatesignedbythespouses
does not conclusively prove that constructive
delivery was made nor that ownership has been
transferred to the respondent spouses. Like the
receipt and the invoice, the signing of the said
documentswasqualifiedbythefactthatitwasa
requirement of Union Motor for the sale and
financingcontracttobeapproved.Inallformsof
delivery, it is necessary that the act of delivery,
whether constructive or actual, should be
coupledwiththeintentionofdeliveringthething.
The act, without the intention, is insufficient.
Inasmuch as there was neither physical nor
constructive delivery of a determinate thing, (in
248
Q:Howmaythebuyeracceptthedeliveryofthe
thingsold?
A:
1. Express he intimates to sellerthat he
hasaccepted
2. Implied
a. Buyer does not act inconsistent
with ownership of seller after
delivery
b. Retainswithoutintimatingtoseller
thathehasrejected
UnderArt.1588,whenthebuyersrefusaltoaccept
the goods is without just cause, the title thereto
passes to him from the moment they are placed at
hisdisposal.(Villanueva,p.117)
Q:Ispaymentofthepurchasepriceessentialto
transferownership?
A:Unlessthecontractcontainsastipulationthat
ownership of the thingsold shall not pass to the
purchaser until he has fully paid the price,
ownershipofthethingsoldshallbetransferredto
the vendee upon the actual or constructive
deliverythereof.(Diaz,p.48)
A:
1. Goods must be delivered in full except
whenstipulated
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
2.
Whennotexaminedbythebuyeritis
notaccepteduntilexaminedoratleast
hadreasonabletimetoexamine
Q:Whenmaythebuyersuspendpaymentofthe
price?
A:
GR:
1. If he is disturbed in the possession or
ownershipofthethingbought
2. If he has wellgrounded fear that his
possession or ownership would be
disturbed by a vindicatory action or
foreclosureofmortgage.
XPN:
1. Sellergivessecurityforthereturnofthe
priceinapropercase;
2. A stipulation that notwithstanding any
suchcontingency,thebuyermustmake
payment;
3. Disturbance or danger is caused by the
seller;
4. If the disturbance is a mere act of
trespass;
5. Uponfullpaymentoftheprice.
B.WHENDELIVERYDOESNOTTRANSFERTITLE
Q:Whendoesdeliverydoesnottransfertitle?
A:
1. SaleonTrial,Approval,orSatisfaction
2. When there is an EXPRESS
RESERVATION
a. If it was stipulated that
ownership shall not pass to
the purchaser until he has
fullypaidtheprice(Art.1478)
3. When there is an IMPLIED
RESERVATION
a. a. When goods are shipped,
but the bill of lading states
that goods are deliverable to
the seller or his agent, or to
the order of the seller or his
agent
b. b. When the bill of lading is
retained by the seller or his
agent
c.
SALEONTRIAL,APPROVALORSATISFACTION
Q:Whatissaleontrial,approvalorsatisfaction?
A:
Title
RiskofLoss
Remainswithseller
GR:Bornebyseller
XPN:
1. Buyerisatfault
2. Buyeragreedto
beartheloss
Astotrial
GR:Buyermustgivegoodsa
trial
XPN:Buyerneednotdosoif
itisevidentthatitcannot
performthework.
Whenperiod
withinwhichbuyer
mustsignifyhis
acceptanceruns
Itrunsonlywhenalltheparts
essentialfortheoperationof
theobjecthasbeendelivered
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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Validityof
stipulationthata
3rdpersonmust
satisfyapprovalor
satisfaction
Ifthesaleismade
toabuyerwhois
anexpertonthe
objectpurchased
b.
GR:Thereispresumptionofdelivery
XPN:
a. Contrarystipulation;
b. When at the time of execution,
subject matter was not subject to
thecontrolofseller;
c. Seller has no capacity to deliver at
timeofexecution;
d. Such capacity should subsist for a
reasonable time after execution of
instrument.
rd
Valid,providedthe3 person
isingoodfath
Generally,itcannotbe
consideredasaleonapproval
C.KINDSOFDELIVERY
Q:Whatarethedifferentkindsofdelivery?
A:
1. Actual thing sold is placed under the
controlandpossessionofbuyer/agent;
2. Constructive does not confer physical
possession of the thing, but by
constructionoflaw,isequivalenttoacts
ofrealdelivery.
Requisites:
a. The seller must have control over
thething
b. The buyer must be put under
control
c. Theremustbeintentiontodeliver
the thing for purposes of
ownership
i. TradicionSymbolicadelivery
of
certain
symbols
representingthething
ii. Tradicion Instrumental
delivery of the instrument of
conveyance.
iii. Traditio Longa Manu
Delivery of thing by mere
agreement;whensellerpoints
to the property without need
ofactuallydelivering
iv. TradicionBreviManuBefore
contractofsale,thewouldbe
buyer was already in
possession of the wouldbe
subjectmatterofsale
v. ConstitutumPossessoriumat
the time of perfection of
contract, seller continues to
have possession merely as a
holder
250
A:Yes.Atradingcontractisacontractforthesale
of products for future delivery, in which either
seller or buyer may elect to make or demand
delivery of goods agreed to be bought and sold,
but where no such delivery is actually made. In
this case, no actual delivery of goods and
commodity was intended and ever made by the
parties. In the realities of the transaction, the
parties merely speculated on the rise and fall in
thepriceofthegoods/commoditysubjectmatter
of the transaction. If Susans speculation was
correct, she would be the winner and OCP, the
loser,soOCPwouldhavetopayherthe"margin".
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
Butifshewaswronginherspeculationthenshe
would emergeas the loser andOCP, the winner.
OCP would then keep the money or collect the
difference from her. This is clearly a form of
gambling provided for with unmistakable
certainty under Article 2018. (Onapal Phils.
Commodities,Inc.vs.CAandSusanChua,G.R.No.
90707,Feb.1,1993)
Q:Candeliverybeeffectedthroughacarrier?
A:
GR:Yes,ifthesellerisauthorized.Deliveryto
carrierisdeliverytothebuyer.
XPN:
1. Acontraryintentionappears
2. Impliedreservationofownershipunder
Art.1503,pars1,2,3.
Q:Whatarethekindsofdeliverytocarrier?
A:
1. FAS(FreeAlongSide)whengoodsare
delivered alongside the ship, there is
alreadydeliverytothebuyer
2.
3.
4.
A:
1. To enter on behalf of the buyer into
such contract reasonable under the
circumstances;
2. To give notice to the buyer regarding
necessityofinsuringthegoods.
Q:Whereistheplaceofdelivery?
A:
1. Thatagreedupon
2. Placedeterminedbyusageoftrade
3. Sellersplaceofbusiness
4. Sellersresidence
5. In case of specific goods, where they
canbefound
Q:Whenshouldtheobjectbedelivered?
A:
1. Stipulatedtime
2. Ifthereisnone,atareasonablehour.
A:
1. Goods must be delivered in full except
whenstipulated
2. Whennotexaminedbythebuyeritis
notaccepteduntilexaminedoratleast
hadreasonabletimetoexamine
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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A:
1. Ifthebuyerhasnotpaidtheprice;
2. Noperiodforpaymenthasbeenfixedin
thecontract;
3. A period for payment has been fixed in
the contract but the buyer has lost the
righttomakeuseofthetime.
D.DOUBLESALE
Q:Whenisthereadoublesale?
Note:Requisites:
1. Samesubjectmatter
2. Sameimmediateseller
3. Twoormoredifferentbuyers
4. Bothsalesarevalid
Q:Whatistheruleondoublesale?
A:Firstintime,priorityinright
Note:RuleonDoubleSaleregardingimmovables:
GR:ApplyArt.1544
XPN: Sale of registered lands apply Torrens
System
A:
c. MovableOwnerwhoisfirsttopossess
ingoodfaith
d. Immovable
d. Firsttoregisteringoodfaith
e. No inscription, first to possess in
goodfaith
f. No inscription & no possession in
good faith Person who presents
oldesttitleingoodfaith
E.PROPERTYREGISTRATIONDECREE
252
Q:Explaintheprincipleofpriustempore,potior
jure.
A:Knowledgebythefirstbuyerofthesecondsale
cannotdefeatthefirstbuyersrightsexceptwhen
the second buyer first registers in good faith the
secondsale.Conversely,knowledgegainedbythe
second buyer of the first sale defeats his rights
evenifheisfirsttoregister,sincesuchknowledge
taints his registration with bad faith to merit the
nd
protection of Art. 1544 (2 par.), the second
realty buyer must act in good faith in registering
hisdeedofsale.(Diaz,p.125)
Note:Whereonesaleisabsoluteandtheotherisa
pacto de retro transaction where the period to
redeemhasnotyetexpired,Art.1544willnotapply.
(Pineda,p.223)
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
WasDehlmaapurchaseringoodfaith?
Q:WhoasbetweenDehlmaandXYZBankhasa
betterrighttothehouseandlot?
A:BetweenDehlmaandthebank,theformerhas
abetterrighttothehouseandlot.
Q:Whoownsthemovablesinsidethehouse?
Q:Doespriorregistrationbythesecondbuyerof
a property subject of a double sale confer
ownership or preferred right in his favor over
thatofthefirstbuyer?
VIII.RISKOFLOSS
Q:Whenisathingconsideredlost?
A:Itisunderstoodthatthethingislostwhenit:
1. perishes,or
2. goesoutofcommerce,or
3. disappears in such a way that its
existence is unknown or cannot be
nd
recovered.(Art.1189,2 par.)
Q:Whatisdeterioration?
Q:Whobearstheriskoflossordeterioration?
A:
BEFORE
PERFECTION
AT
PERFECTION
AFTER
PERFECTION
BUT
BEFORE
DELIVERY
AFTER
DELIVERY
Resperitdomino
Contractshallbewithoutany
effectthesellerbearstheloss
sincethebuyerisrelievedofhis
obligationunderthecontract
TwoViews:
Paras:Buyer,except:
1. whenobjectsoldconsistsof
fungiblegoodsforapricefixed
2. whensellerisguiltyoffraud,
negligence,default,or
violationofcontractualterms;
or
3. whenobjectsoldisgeneric.
Tolentino:Seller;
Deterioration & fruits Buyer
bearsloss
Resperitdomino
Buyerbecomestheownerso
buyerbearsriskofloss
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
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VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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A:
1. Totallosscontractisvoid&inexistent
2. Partial loss buyer may elect between
withdrawing from the contract or
demanding the remaining part, paying
itsproportionateprice
E.WhenOwnershipisTransferred
SeeTransferofOwnership.p.247
IX.DOCUMENTSOFTITLE
Q:WhatisaDocumentofTitle?
A:
1. Evidence of possession or control of
goodsdescribedtherein
2. Medium of transferring title and
possession over the goods described
therein without having to effect actual
delivery(Villanueva,2009ed.)
3. Thecustodyofanegotiablewarehouse
receipts issued to the order of the
owner,ortobearer,isarepresentation
of title upon which bona fide
purchasersforvalueareentitledtorely
,despitebreachesoftrustorviolations
of agreement on the part of the
apparent owner (Siy Cong Bieng v.
HSBC,56Phil598)
NegotiableDocumentsofTitle
Q:WhatisaNegotiableDocumentofTitle?
254
A:
1. Owner
2. Persontowhomthepossessionpr
custodyofthedocumenthasbeen
entrustedbytheowner
a. If bailee undertakes to
deliverthegoodstosuch
person
b. If document is in such
form that it may be
negotiatedbydelivery.
NonNegotiableDocumentsofTitle
Q:WhatareNonnegotiabledocumentsoftitle?
A:
1. They are delivered only to a
specifiedperson
2. Carrierwillnotdeliverthegoodsto
any holder of the document or to
whom such document may have
beenendorsedbytheconsignee
3. Must present the deed of sale or
donationinhisfavour
A:
1. GenuinessoftheDocument
2. Legalrighttonegotiateortransfer
3. No knowledge of fact which would
impair the validity or worth of the
document
4. Right to transfer Title to the goods and
merchantability or fitness for a
particular purpose, whenever such
warranties would have been implied
had the contract transfer the goods
withoutadocument.
RulesRegardingLevyandGarnishmentofGoods
A:Heacquires:
1. Titletothegoods,subjecttotheterms
ofanyagreementwiththetransferor;
2. Right to notify the bailee who issued
the document of the transfer thereof,
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
and thereby to acquire the direct
obligation of such bailee to hold
possession of the goods for him
according to the terms of the
document.
Q:Howmaythetransferorscreditordefeatthe
aforementionedrightsofthetransferee?
A:
GR: No, the goods cannot be attached,
garnished or levied upon while they are in
thebaileespossession.
XPN:
1. When the document is first
surrendered;or
2.Whenitsnegotiationisenjoined.
Note:Thebaileeshallinnocasebecompelled
to deliver the actual possession of the goods
untilthedocumentis:
1.Surrenderedtohim;or
2.Impoundedbythecourt.
(Art.1519,NCC)
X.REMEDIESOFANUNPAIDSELLER
A.DEFINITIONOFUNPAIDSELLER
Q:Whoisanunpaidseller?
A:Thesellerofgoodsisdeemedtobeanunpaid
sellereither:
1. when the whole of the price has not
beenpaidortendered;or
2. when a bill of exchange or other
negotiable instrument has been
received as conditional payment, and
the condition on which it was received
has been broken by reason of the
dishonor of the instrument, the
insolvencyofthebuyer,orotherwise.
Note:Itincludesanagentofthesellertowhomthe
bill of lading has been indorsed, or consignor or
agentwhohashimselfpaid,orisdirectlyresponsible
for the price, or any other person who is in the
positionofaseller.
B.REMEDIESOFUNPAIDSELLER
Q:WhataretheremediesofanUnpaidSeller?
A:
I.
Ordinary
1. ActionforPrice
Exercisedwhen:
a. ownershiphaspassedtobuyer;
b. priceispayableonadaycertain
c. goods cannot readily be resold for
reasonable price and Art. 1596 is
inapplicable
II.
Special
Note:Whenpartofgoodsdelivered,may
stillexerciserightongoodsundelivered
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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2.
StoppageinTransitu
Requisites:ISENTU
a. Insolventbuyer
b. Seller must Surrender the
negotiabledocumentoftitle,ifany
c. Seller must bear the Expenses of
delivery of the goods after the
exerciseoftheright.
d. Seller must either actually take
possession of the goods sold or
give Notice of his claim to the
carrier or other person in
possession
e. GoodsmustbeinTransit
f. Unpaidseller
3.
SpecialRighttoReselltheGoods
Exercisedwhen:
a. Goodsareperishable,
b. Stipulated the right of resale in
caseofdefault,or
c. Buyer in default for unreasonable
time
4.
SpecialRighttoRescind
Requisites:
a. Expressly stipulated OR buyer is in
defaultforunreasonabletime
b. Noticeneededtobegivenbyseller
tobuyer
Q:Whataretheinstanceswhenpossessorylien
islost?
A:
1. Seller delivers without reserving
ownership in goods or right to possess
them
2. Buyer or agent lawfully obtains
possessionofgoods
3. Waiver
Note:Sellerloseslienwhenhepartswithgoods(but
still,stoppageintransitucanbeexercised)
Q:Whatistherightofstoppageintransitu?
A:Thesellermayresumepossessionofthegoods
at any time while they are in transit, and he will
thenbecomeentitledtothesamerightsinregard
to the goods as he would have had if he had
never parted with the possession. (Art. 1530,
NCC)
256
Q:Whenaregoodsconsideredtobeintransit?
A:
1. After delivery to a carrier or other
baileeandbeforethebuyerorhisagent
takesdeliveryofthem;and
2. If the goods are rejected by the buyer,
and the carrier or other bailee
continues in possession of them. (Art.
1531,par.1)
A:
1. Afterdeliverytothebuyerorhisagent
2. Ifthebuyer/agentobtainspossessionof
the goods at a point before the
destinationoriginallyfixed;
3. Ifthecarrierorthebaileeacknowledges
thatheholdsthegoodsinbehalfofthe
buyer/hisagent;
4. If the carrier or bailee wrongfully
refuses to deliver the goods to the
buyerorhisagent.(Villanueva,p.181)
XI.PERFORMANCEOFCONTRACT
A.SALEOFPERSONALPROPERTY.
RULESONSALEOFPERSONALPROPERTY.
INSTALLMENTSALESLAW
Q:WhatistheInstallmentSalesLaw?
Q:TowhatdoestheRectoLawapply?
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
Q:Whatarethealternativeremediesincaseof
saleofpersonalpropertyininstallments?
A:
1. Specific Performance: Exact fulfillment
shouldthebuyerfailtopay
Deemedchosenwhen:
a. Noticeofrescissionissent
b. Takespossessionofsubjectmatter
ofsale
c. Filesactionforrescission
B.SALEOFREALPROPERTY.
RULESONSALEOFREALPROPERTY
REALTYINSTALLMENTBUYERACT
Q:WhatistheRealtyInstallmentBuyerAct?
Note:Thepurposeofthelawistoprotectbuyersin
installmentagainstoppressiveconditions.
Q:Whataretherightsgrantedtobuyers?
A:
1. Buyerpaidatleast2yearsinstallment
a. Pay w/o interest the balance
withingraceperiodof1monthfor
everyyearofinstallmentpayment.
Grace period to be exercised once
every5years.
b. When no payment cancelled;
buyer entitled to 50% of what he
has paid + 5% for every year but
not exceeding 90% of payments
made
Note:Cancellationtobeeffected30
daysfromnotice&uponpaymentof
cashsurrendervalue.
2.
Buyerpaidlessthan2yearsinstallment
a. Grace period is not less than 60
daysfromduedate
b. Cancellation if failure to pay w/in
60daysgrace
c. 30 days notice before final
cancellation
Note:buyercanstillpayw/inthe30
daysperiodwithinterest.
Q:Whataretheotherrightsgrantedtoabuyer?
A:
1. Sellorassignrightstoanother
2. Reinstate contract by updating within
30daysbeforeandcancellation
3. DeedofSaletobedonebynotarialact
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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4.
5.
Note:Appliestocontractsevenbeforethelawwas
enacted.Stipulationtothecontraryisvoid
Q:WhatarethesocalledMacedaandRecto
laws in connection with sales on installments?
Givethemostimportantfeaturesoneachlaw.
Ifthecontractiscancelled,thesellershall
refund to the buyer the cash surrender
value equivalent to fifty percent (50%) of
the total payments made, and after five
years of installments, an additional five
percent(5%)everyyearbutnottoexceed
ninety percent (90%) of the total
paymentsmade.
258
A:
1. Assuming that the land is a
residential subdivision project under
P.D. No. 957 (The Subdivision and
Condominium
Buyers
Protective
Decree), DEVLAND's action is not
properbecauseunderSection23ofsaid
Decree,noinstallmentpaymentshallbe
forfeited to the owner or developer
when the buyer, after due notice,
desistsfromfurtherpaymentduetothe
failure of the ownerdeveloper to
develop the subdivision according to
theapprovedplansandwithinthetime
limitforcomplyingwiththesame.
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
XII.WARRANTIES
Q:Whatisawarranty?
Note:Mayeitherbeexpressorimplied.
Q:Whatistheeffectofabreachofwarranty?
A:Buyermay:
1. Refusetoproceedwiththecontract;or
2. Proceed with the contract; waive the
condition.
Note:Iftheconditionisinthenaturethatitshould
happen, the nonperformance may be treated as a
breachofwarranty.
A:
i.
Express
ii.
Implied
B.IMPLIEDWARRANTIES
Q:Whatareimpliedwarranties?
A:Warrantiesdeemedincludedinallcontractsof
salebyoperationoflaw.(Art.1547)
2. Warrantyagainsteviction
Requisites:JPENS
a. BuyerisEvictedinwholeorinpart
fromthesubjectmatterofsale
b. FinalJudgment
c. Basis of eviction is a right Prior to
saleoractimputabletoseller
d. Seller has been Summoned in the
suit for eviction at the instance of
buyer; or made 3rd party
defendant through 3rd party
complaintbroughtbybuyer
e. Nowaiveronthepartofthebuyer
3.
A.EXPRESSWARRANTIES
Q:Whatareexpresswarranties?
A:AIR
1. It must be an Affirmation of fact
relatingtothesubjectmatterofsale
2. Natural tendency is to Induce buyer to
purchasesubjectmatter
3. Buyer purchases the subject matter
Relyingthereon
Q:Whatistheliabilityofthesellerforbreachof
expresswarranties?
A:Thesellerisliablefordamages.(Villanueva,p.
249)
Requisites:
a. immovable sold is encumbered
with nonapparent burden or
servitude not mentioned in the
agreement
b. nature of nonapparent servitude
or burden is such that it must be
presumed that the buyer would
not have acquired it had he been
awarethereof
4.
WarrantyagainstHiddenDefects
Requisites:HENNAS
a. DefectisimportantorSerious
i. The thing sold is unfit for the
usewhichitisintended
ii. Diminishesitsfitnessforsuch
use or to such an extent that
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b.
c.
d.
e.
f.
Q:Whenisimpliedwarrantynotapplicable?
A:ASAP
1. Asisandwhereissale
2. Saleofsecondhandarticles
3. Salebyvirtueofauthorityinfactorlaw
4. Sale at public auction for tax
delinquency
C.EFFECTSOFWAIVEROFIMPLIEDWARRANTIES
Q:Whataretheeffectsofwaiverofanimplied
warranty?
A:
1. Seller in bad faith & there is waiver
againstevictionvoid
2. When buyer w/o knowledge of a
particular
risk,
made
general
renunciation of warranty is not a
waiverbutmerelylimitsliabilityofseller
incaseofeviction
3. When buyer with knowledge of risk of
eviction assumed its consequences &
made a waiver seller not liable
(applicable only to waiver of warranty
againsteviction)
WARRANTYAGAINSTEVICTION
Q:Whatisawarrantyagainsteviction?
260
A:Itcoversevictionbyafinaljudgmentbasedon
arightpriortothesaleoranactimputabletothe
vendor,thevendeeisdeprivedofthewholeorof
apartofthethingpurchased.
1. Thereturnofthevaluewhichthething
soldhadatthetimeoftheeviction,be
itgreaterorlesserthanthepriceofthe
sale
2. The income or fruits, if he has been
ordered to deliver them to the party
whowonthesuitagainsthim
3. The costs of suit which caused the
eviction,and,inapropercase,thoseof
suit brought against the vendor for the
waranty
4. The expenses of contract if buyer has
paidthem
5. The damages and interests and
ornamental expenses if sale was made
inbadfaith.
Note:Vendorisliableforanyhiddendefectevenif
heisnotaware.(CaveatVenditor)
Purchasermustbeawareofthetitleofthevendor.
(CaveatEmptor)
Q:Whataretherightsofbuyerincaseofpartial
eviction?
A:
1. Restitution (with obligation to return
thethingw/ootherencumbrancesthan
thosewhichithadwhenheacquiredit)
2. Enforcement of warranty against
eviction(Paras,p.153andArt.1556)
WARRANTYAGAINSTHIDDENDEFECT
Q:Whatisahiddendefect?
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
Note:Sellerdoesnotwarrantpatentdefect;Caveat
emptor(buyerbeware)
Q:Whatisaredhibitorydefect?
Q:Whatisaredhibitorydefectonanimals?
A:Ifthehiddendefectofanimals,evenincasea
professionalinspectionhasbeenmade,shouldbe
of such a nature that expert knowledge is not
sufficient to discover it, the defect shall be
consideredasredhibitory.
Q:Whenisthesaleofanimalvoid?
A:Thesaleisvoidifanimalis:
1. Sufferingfromcontagiousdiseases;
2. Unfit for the use or service for which
theywerepurchasedasindicatedinthe
contract
A:Ifthehiddendefectswhichthethingsoldmay
have:
1. Renderitunfitfortheuseforwhichitis
intended,or
2. Diminishitsfitnessforsuchusetosuch
an extent that, had the vendee been
aware thereof, he would not have
acquireditorwouldhavegivenalower
priceforit.(Art.1561)
A:Thesellerisresponsibletothevendeeforany
hidden faults or defects in the thing sold, even
thoughhewasnotawarethereof.
A:
1. For patent defects or those which are
visible,or
2. Even for those which are not visible if
thebuyerisanexpertwho,byreasonof
his trade or profession, should have
knownthem(Art.1561),or
3.
Ifthecontraryhasbeenstipulated,and
thevendorwasnotawareofthehidden
faults or defects in the thing sold. (Art.
1566)
Q:Whataretheremediesofthebuyerincaseof
saleofthingswithhiddendefects?
A:Thevendeemayelectbetween:
1. Withdrawingfromthecontract,or
2. Demanding a proportionate reduction
of the price, with damages in either
case.
theleaseagreement. Hence,respondentscannot
be held liable for the alleged warranty against
hidden defects. (Jon and Marissa De Ysasi v.
Arturo and Estela Arceo, G.R. No. 136586, Nov.
22,2001)
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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IMPLIEDWARRANTIESINCASEOFSALEOF
GOODS
A:
1. Warrantyoffitness
GR:Noimpliedwarranty
XPN:
a. Buyer manifests to the seller the
particular purpose for which the
goodsarerequired;and
b. Buyer relies upon the sellers skill
orjudgment
CAVEATEMPTOR
Q:Whatdoestheprincipleofcaveatemptor
mean?
A:
1. Salesofanimals(Art.1574)
2. Doublesales(Art.1544)
3. Insheriffssales(Art.1570)
4. Taxsales(Art.1547,lastparagraph)
Note:Intheabovesales,thereisnowarrantyoftitle
or quality on the part of the seller. The purchaser
whobuyswithoutcheckingthetitleofthevendoris
assumingallrisksofeviction.
Insheriffssales,thesheriffdoesnotguaranteethe
title to real property and it is not incumbent upon
him to place the buyer in possession of such
property.(Pinedasales,p.275)
262
Q:Doescaveatemptorapplyinjudicialsales?
A:Yes.Thepurchaserinajudicialsaleacquiresno
higher or better title or right than that of the
judgmentdebtor.Ifithappensthatthejudgment
debtorhasnoright,interest,orlienonandtothe
property sold, the purchaser acquires none.
(Pinedasales,p.280)
D.REMEDIESINCASEOFBREACHOFWARRANTY
Q:Whataretheremediesofthebuyerincaseof
breachofwarranty?
A:
1. Accept goods & set up breach of
warranty by way of recoupment in
diminutionorextinctionortheprice.
2. Acceptgoods&maintainactionagainst
sellerfordamages
3. Refuse to accept goods & maintain
actionagainstsellerfordamages
4. Rescind contract of sale & refuse to
receive goods/return them when
alreadyreceived.
Thevendeemayalsoaskfortheannulmentofthe
contract upon proof of error or fraud, in which
case the ordinary rule on obligations shall be
applicable. Under the law on obligations,
responsibilityarisingfromfraudisdemandablein
all obligations and any waiver of an action for
future fraud is void. Responsibility arising from
negligence is also demandable in any obligation,
butsuchliabilitymayberegulatedbythecourts,
accordingtothecircumstances.
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
rule, bar the applicability of the law on quasi
delict, the liability may itself be deemed to arise
from quasidelict, i.e., the acts which breaks the
contract may also be a quasidelict. (CocaCola
Bottlers Philippines, Inc. v. CA, G.R. No. 110295,
Oct.18,1993)
E.CONDITIONVISVISWARRANTY
Theotherpartymay:
1. Refusetoproceedwiththecontract
2. Proceed w/ contract, waiving the
performanceofthecondition
A:
CONDITION
Purportstothe
existenceofobligation
Mustbestipulatedto
formpartofthe
obligation
Mayattachitselfto
obligationofsellerto
deliverpossession&
transfer
WARRANTY
Purportstothe
performanceof
obligation
Neednotbestipulated;
mayformpartof
obligationbyprovision
oflaw
Relatestothesubject
matteritselforto
obligationoftheseller
astothesubjectmatter
ofthesale
XIII.BREACHOFCONTRACT
A.REMEDIESOFTHESELLER
Note:seeRectoandMacedaLaw(XI.Performanceof
Contract)p.258
B.REMEDIESOFTHEBUYER
Q:Whataretheremediesofthebuyer?
A:
I.
Immovablesingeneral
1. Disturbed in possession or with
reasonablegroundstofeardisturbance
Suspendpayment
2. Incaseofsubdivisionorcondoprojects
Ifrealestatedeveloperfailstocomply
with obligation according to approved
plan:
a. Rescind
b. Suspend payment until seller
complies
II.
Movables
1. Failure of seller to deliver Action for
specificperformancewithoutgivingthe
sellertheoptionofretainingthegoods
onpaymentsofdamages
2. Breach of sellers warranty The buyer
may, at his election, avail of the
followingremedies:
a. Accept goods & set up breach of
warrantybywayofrecoupmentin
diminution or extinction or the
price.
b. Accept goods & maintain action
againstsellerfordamages
c. RefusetoAcceptgoods&maintain
actionagainstsellerfordamages
d. Rescind contract of sale & refuse
to receive goods/return them
whenalreadyreceived.
3.
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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XIV.EXTINGUISHMENTOFSALE
A.CAUSESOFEXTINGUISHMENT
A:Acontractofsaleisextinguishedby:
B.REDEMPTION
Q:Whatisredemption?
Q:Whatarethekindsofredemption?
A:
1. Legal
2. Conventional
Q:Shouldtherighttoredeembeincorporatedin
everycontractofsale?
A:Therightofthevendortoredeem/repurchase
must appear in the same instrument. However,
partiesmaystipulateontherightofrepurchasein
a separate document but in this case, it is valid
only between the parties and not against third
persons.(Pineda,p.333)
264
A:
PREEMPTION
Arisesbeforesale
Rescissioninapplicable
Actionisdirectedagainst
prospectiveseller
REDEMPTION
Arisesaftersale
Therecanberescission
oforiginalsale
Actionisdirected
againstbuyer
B.PERIODOFREDEMPTION
Q:Whatistheperiodofredemption?
A:
1. No period agreed upon 4 years from
dateofcontract
2. When there is agreement should not
exceed 10 years; but if it exceeded,
validonlyforthefirst10years.
3. When period to redeem has expired &
there has been a previous suit on the
nature of the contract seller still has
30 days from final judgment on the
basis that contract was a sale with
pactoderetro:
Note:Tenderofpaymentissufficientbutitisnotin
itself a payment that relieves the seller from his
liabilitytopaytheredemptionprice.
A:
1. Right of legal preemption or
redemptionshallbeexercisedwithin30
daysfromwrittennoticebythebuyer
deed of sale not to be recorded in
Registry
of
Property
unless
accompaniedbyaffidavitthatbuyerhas
givennoticetoredemptioners
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
D.EXERCISEOFTHERIGHTTOREDEEM
Q:Whatistheeffectoffailuretoredeem?
A:Theremustbejudicialorderbeforeownership
of real property is consolidated to the buyer a
retro.
TRUSTDESONTORT
Q:Whatisatrustdesontort?
Q:Doconstructivetrustsariseonlyoutoffraud
orduress?
A:No.Aconstructivetrust,otherwiseknownasa
trustexmaleficio,atrustexdelicto,atrustdeson
tort,aninvoluntarytrust,oranimpliedtrust,isa
trustbyoperationoflawwhicharisescontraryto
intention and in invitum, against one who, by
fraud, actual or constructive, by duress or abuse
ofconfidence,bycommissionofwrong,orbyany
form of unconscionable conduct, artifice,
concealment, or questionable means, or who in
any way against equity and good conscience,
either has obtained or holds the legal right to
propertywhichheoughtnot,inequityandgood
conscience, hold and enjoy. It has been broadly
ruled that a breach of confidence, although in
business or social relations, rendering an
acquisition or retention of property by one
person unconscionable against another, raises a
constructivetrust.Itisraisedbyequityinrespect
ofproperty,whichhasbeenacquiredbyfraud,or
where, although acquired originally without
fraud, it is against equity that it should be
retained by the person holding it. (Arlegui v. CA
G.R.No.126437,Mar.6,2002)
D.CONVENTIONALREDEMPTION
Q:Whatisconventionalredemption?
E.LEGALREDEMPTION
Q:Whatislegalredemption?
Q:Whataretheinstancesoflegalredemption?
A:
1. Sale of a coowner of his share to a
stranger(Art.1620)
2. Whenacreditorotherincorporealright
inlitigationissold(Art.1634)
3. Saleofanheirofhishereditaryrightsto
astranger(Art.1088)
4. Sale of adjacent rural lands not
exceeding1hectare(Art.1621)
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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5.
A:
1. Redemptionofhomesteads
2. Redemptionintaxsales
3. Redemptionbyjudgmentdebtor
4. Redemptioninextrajudicialforeclosure
5. Redemption in judicial foreclosure of
mortgage
Q:Whendoeslegalredemptionperiodbeginto
run?
C.EQUITABLEMORTGAGE
Q:Whatisanequitablemortgage?
A:Onewhichlackstheproperformalities,formor
wordsorotherrequisitesprescribedbylawfora
mortgage,butshowstheintentionoftheparties
to make the property subject of the contract as
security for a debt and contains nothing
impossibleorcontrarytolaw
Q:Whataretheessentialrequisitesofequitable
mortgage?
A:
1. Partiesenteredintoacontractofsale
2. Their intention was to secure an
existingdebtbywayofamortgage.
266
4.
5.
6.
7.
Remedyisreformation.
Anequitablemortgageisonewhichalthoughlacking
in some formality, or form or words, or other
requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real
propertyassecurityforadebt,andcontainsnothing
impossibleorcontrarytolaw.
A:Mereinadequacyofthepriceisnotsufficient.
The price must be grossly inadequate, or purely
shockingtotheconscience.(Diaz,p.186)
Q:Xtransferredthreeparcelsoflandinfavorof
Y. The transaction was embodied in two Deeds
of Absolute Sale for the price of P240, 000. The
titles of said lots were transferred to Y.
However, X failed to vacate and turn over the
purchased lots. This prompted Y to file an
ejectment suit against X. X claimed that the
transactions entered between them were not
actually sales, but an equitable mortgage. Does
the transaction involve an absolute sale or an
equitablemortgageofrealproperty?
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
the parties, as shown not necessarily by the
terminology used in the contract but by all the
surrounding circumstances, such as the relative
situations of the parties at that time; the
attitudes, acts, conduct, and declarations of the
parties; the negotiations between them leading
to the deed; and generally, all pertinent facts
having a tendency to fix and determine the real
nature of their design and understanding. As
such, documentary and parol evidence may be
submittedandadmittedtoprovetheintentionof
theparties.(SpsAustriav.SpsGonzales,G.R.No.
147321,Jan.21,2004)
A:No.Theinstanceswhenacontract,regardless
of its nomenclature, may be presumed to be an
equitable mortgage are enumerated in Art. 1602
of the Civil Code. Here, none of those
circumstances were present. The original
transactionwasaloan.Ceballosfailedtopaythe
loan; consequently, the parties entered into
anotheragreementtheassailed,dulynotarized
DeedofAbsoluteSale,whichsupersededtheloan
document. Ceballos had the burden of proving
that she did not intend to sell the property and
that Mercado did not intend to buy it; and that
the new agreement did not embody the true
intention of the parties. (Ceballos v. Intestate
Estate of the Late Emigdio Mercado, G.R. No.
155856,May28,2004)
Q:Eulaliawasengagedinthebusinessofbuying
and selling large cattle. In order to secure the
financialcapitalsheadvancedforheremployees
(biyaheros) she required them to surrender TCT
of their properties and to execute the
corresponding Deeds of Sale in her favor.
Domeng Bandong was not required to post any
security but when Eulalia discovered that he
incurred shortage in cattle procurement
operation,hewasrequiredtoexecuteadeedof
saleoveraparceloflandinfavorofEulalia.She
soldthepropertytohergrandnieceJocelynwho
thereafter instituted an action for ejectment
against the Spouses Bandong. To assert their
right, Spouses Bandong filed an action for
annulment of sale against Eulalia and Jocelyn
allegingthattherewasnosaleintendedbutonly
equitable mortgage for the purpose of securing
theshortageincurredbyDomengintheamount
ofP70,000.00whileemployedasbiyaheroby
Eulalia.WasthedeedofsalebetweenDomeng
and Eulalia a contract of sale or an equitable
mortgage?
G.DISTINGUISHEDFROM
OPTIONTOBUY
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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Note:SCheldthatinthiscase,therewasnosale
a retro and that the right of repurchase is not a
rightgrantedthesellerbythebuyerinaseparate
instrument. Such right is reserved by the vendor
inthesameinstrumentofthesaleasoneofthe
stipulationsinthecontract.
XV.LAWONSALEOFSUBDIVISIONAND
CONDOMINIUM(PD957)
SCOPEOFAPPLICATION
Q:Aresalesordispositionsofsubdivisionlotsor
condominiumunitspriortotheeffectivityofthe
decree exempt from compliance with the
requirementsstatedtherein?
A: No. It shall be incumbent upon the owner or
developer of the subdivision or condominium
project to complete compliance with his or its
obligations as provided in the decree within two
yearsfromthedateofeffectivityoftheDecree,
unless otherwise extended by the Authority or
unlessanadequateperformancebondisfiled.
Note: Failure of the owner or developer to comply
with the obligations under this and the preceding
provisions shall constitute a violation punishable
underSections38and39oftheDecree.
DEFINITIONOFTERMS
Q: How is sale or sell defined under the
Decree?
A:Shallinclude:
1.
2.
3.
4.
5.
6.
268
7.
8.
9.
solicitationofasale;
offer to sell, directly or by an agent, or
by a circular, letter, advertisement or
otherwise;and
a. privilege given to a member of a
cooperative, corporation, partnership,
oranyassociationand/or
b.theissuanceofacertificateorreceipt
evidencing or giving the right of
participation in, or right to, any land in
consideration of payment of the
membershipfeeordues.(Deemedsale)
Q:Whatisasubdivisionlot?
A: Any of the lots, whether residential,
commercial, industrial, or recreational, in a
subdivisionproject.
Q:Whatisacomplexsubdivisionplan?
A:Asubdivisionplanofaregisteredlandwherein
astreet,passagewayoropenspaceisdelineated
ontheplan.
Q:Whatisacondominiumproject?
A:Theentireparcelofrealpropertydividedorto
bedividedprimarilyforresidentialpurposesinto
condominium units, including all structures
thereon.
Q:Whatisacondominiumunit?
A: A part of the condominium project intended
for any type of independent use or ownership,
includingoneormoreroomsorspaceslocatedin
oneormorefloors(orpartofpartsoffloors)ina
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
buildingorbuildingsandsuchaccessoriesasmay
beappendedthereto.
Q:Definethefollowingterms:
3.
1.
2.
3.
4.
5.
Owner.
A:Registeredownerofthelandsubject
of a subdivision or a condominium
project.
Developer.
A: person who develops or improves
thesubdivisionprojectorcondominium
project for and in behalf of the owner
thereof.
Dealer.
A: any person directly engaged as
principal in the business of buying,
selling or exchanging real estate
whether on a fulltime or parttime
basis.
Broker.
A: any person who, for commission or
other compensation, undertakes to sell
or negotiate the sale of a real estate
belongingtoanother.
Salesman.
A: person regularly employed by a
brokertoperform,forandinhisbehalf,
any or all functions of a real estate
broker.
REGISTRATIONANDLICENSETOSELL
Q:Uponwhatagencyisexclusivejurisdictionto
regulaterealestatetradeandbusinessvested?
4.
5.
thebuildingorbuildingsincludedinthe
condominium project in accordance
with the National Building Code (R.A.
No.6541).
The subdivision plan, as so approved,
shallthenbesubmittedtothe Director
ofLandsforapproval.
In case of complex subdivision plans,
court approval shall no longer be
required.
The condominium plan as likewise so
approved, shall be submitted to the
RegisterofDeedsoftheprovinceorcity
inwhichthepropertyliesandthesame
shall be acted upon subject to the
conditions and in accordance with the
procedureprescribedinSection4ofthe
CondominiumAct(R.A.No.4726).
A:NationalHousingAuthority
Q:Whatmustaregisteredownerofaparcelof
landdoifhewishestoconvertsaidpropertyinto
asubdivisionorcondominiumproject?
A:Heshall:
1.
2.
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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Q:Whenmayalicensetosellorregistrationofa
subdivisionorcondominiumprojectberevoked?
A: The Authority may, motu proprio or upon
verified complaint filed by a buyer of a
subdivision lot or condominium unit, revoke the
registration of any subdivision project or
condominium project and the license to sell any
subdivision lot or condominium unit in said
projectbyissuinganordertothiseffect,withhis
findings in respect thereto, if upon examination
into the affairs of the owner or dealer during a
hearing, it shall appear there is satisfactory
evidencethatthesaidownerordealer:
1.
2.
2.
3.
Q:Whenmayalicensetosellbesuspended?
A:
1.
2.
270
Uponverifiedcomplaintbyabuyerofa
subdivisionlotoracondominiumunitin
anyinterestedparty,theAuthoritymay,
in its discretion, immediately suspend
the owner's or dealer's license to sell
pending investigation and hearing of
thecase.
TheNHAmaymotupropriosuspendthe
license to sell if, in its opinion, any
information in the registration
statement filed by the owner or dealer
is or has become misleading, incorrect,
inadequateorincompleteorthesaleor
offering for a sale of the subdivision or
condominiumprojectmayworkortend
3.
4.
5.
6.
isinsolvent;or
hasviolatedanyoftheprovisionsofthis
Decree or any applicable rule or
regulation of the Authority, or any
undertaking of his/its performance
bond;or
has been or is engaged or is about to
engageinfraudulenttransactions;or
hasmadeanymisrepresentationinany
prospectus, brochure, circular or other
literature about the subdivision project
or condominium project that has been
distributedtoprospectivebuyers;or
isofbadbusinessrepute;or
does not conduct his business in
accordance with law or sound business
principles.
Note:Wheretheownerordealerisapartnership
or corporation or an unincorporated association,
it shall be sufficient cause for cancellation of its
registrationcertificateanditslicensetosell,ifany
member of such partnership or any officer or
director of such corporation or association has
beenguiltyofanyactoromissionwhichwouldbe
cause for refusing or revoking the registration of
anindividualdealer,brokerorsalesman.
DEALERS,BROKERSAMDSALESMEN
Q: What is the duration of the registration of
dealers,brokersandsalesmen?
A: On the thirtyfirst day of December of each
year.
However, in the case of salesmen, their
registration shall also cease upon termination of
theiremploymentwithadealerorbroker.
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
Note: Renewal of registration for the succeeding
year shall be granted upon written application
therefore made not less than thirty nor more than
sixty days before the first day of the ensuing year
and upon payment of the prescribed fee, without
the necessity of filing further statements or
information, unless specifically required by the
Authority.
2.
mustbepresentedinsuchmannerthat
will not tend to mislead or deceive the
public.
The owner or developer shall
answerable and liable for the facilities,
improvements, infrastructures or other
forms of development represented or
promised in brochures, advertisements
and
other
sales
propaganda
disseminated by the owner or
developer or his agents and the same
shall form part of the sales warranties
enforceable against said owner or
developer,jointlyandseverally.
violatedanyprovisionofthisDecreeor
anyruleorregulationmadehereunder;
or
made a material false statement in his
applicationforregistration;or
been guilty of a fraudulent act in
connection with any sale of a
subdivisionlotorcondominiumunit;or
demonstrated his unworthiness to
transact the business of dealer, broker,
orsalesman,asthecasemaybe.
1.
2.
3.
4.
A:
ALTERATIONINAPPROVEDSUBDIVISIONPLAN
Q:Whatistheruleiftheownerdesirestomake
alterationsintheapprovedsubdivisionplan?
A:
GR: No owner or developer shall change or
altertheroads,openspaces,infrastructures,
facilitiesforpublicuseand/orotherformof
subdivisiondevelopmentascontainedinthe
approved
subdivision
plan
and/or
representedinitsadvertisements
XPN: If he has obtained the permission of
the Authority and the written conformity or
consent of the duly organized homeowners
association, or in the absence of the latter,
by the majority of the lot buyers in the
subdivision.
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
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TAKEOVERDEVELOPMENT
RIGHTSANDREMEDIESOFABUYER
Q:Maypaymentmadebyabuyerbeforfeitedin
favor of the owner or developer in case the
buyer desists from further payment due to the
failureoftheownerordevelopertodevelopthe
subdivisionorcondominiumprojectaccordingto
theapprovedplanwithinthetimelimitprovided
for such? What is the buyers remedy in this
case?
A:No,suchforfeitureisnotallowed.Suchbuyer
may, at his option, be reimbursed the total
amount paid including amortization interests but
excluding delinquency interests, with interest
thereonatthelegalrate.
Q:Doesadefaultingbuyerhaveanyrightunder
theDecree?
A:Yes.Therightsofthebuyerintheeventofthis
failure to pay the installments due for reasons
otherthanthefailureoftheownerordeveloper
to develop the project shall be governed by
RepublicActNo.6552.
Where the transaction or contract was entered
into prior to the effectivity of Republic Act No.
6552 on August 26, 1972, the defaulting buyer
shall be entitled to the corresponding refund
based on the installments paid after the
effectivity of the law in the absence of any
provisioninthecontracttothecontrary.
Q: What is the owner or developers obligation
in case the lot bought and fullypaid by the
buyerismortgaged?
A:Intheeventamortgageoverthelotorunitis
outstanding at the time of the issuance of the
title to the buyer, the owner or developer shall
redeem the mortgage or the corresponding
portion thereof within six months from such
issuanceinorderthatthetitleoveranyfullypaid
lot or unit may be secured and delivered to the
buyerinaccordanceherewith.
Q: May the parties waive compliance with the
decree?
A: No. Any condition, stipulation, or provision in
contract of sale whereby any person waives
compliancewithanyprovisionoftheDecreeorof
anyruleorregulationissuedthereundershallbe
void.
272
Q: When can
Development?
there
be
TakeOver
XVI.THECONDOMINIUMACT(RA4726)
PRELIMINARIES
Q:Whatisacondominium?
Note:Itmayinclude,inaddition,aseparateinterest
inotherportionsofsuchrealproperty.
Q:Whatcomprisesarealrightincondominium?
Q:Whatisacondominiumunit?
Q:Whatisacondominiumproject?
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
Q:Whatarecommonareas?
Q:Whatismeantbytodividerealproperty?
A:Transferorconveyanceofaunitorapartment,
officeorstoreorotherspacethereinshallinclude
the transfer or conveyance of the undivided
interests in the common areas or, in a proper
case, the membership or shareholdings in the
condominiumcorporation
A:
1. Asregardsindividuals:
GR:None.
2. Asregardscorporations:
Where the common areas in a
condominium project are held by a
corporation, no transfer or conveyance
of a unit shall be valid if the
concomitant
transfer
of
the
appurtenant
membership
or
stockholding in the corporation will
cause the alien interest in such
corporation to exceed the limits
imposedbyexistinglaws.
corporation
shall
constitute
managementbodyoftheproject.
the
2.
3.
4.
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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5.
6.
7.
unitandthecommonareasaresubject
tosucheasements.
A:
GR: Common areas shall remain
undivided,andthereshallbenojudicial
partitionthereof.
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2.
3.
4.
5.
theprojecthasbeeninexistencein
excess of fifty years, that it is
obsolete and uneconomic, and
that condominium owners holding
in aggregate more than fifty
percent interest in the common
areas are opposed to repair or
restoration or remodeling or
modernizingoftheproject;or
theconditionsforsuchpartitionby
sale set forth in the declaration of
restrictions, duly registered in
accordance with the terms of the
Act,havebeenmet.
A:TheRegisterofDeedsmay,attherequestofall
thecondominiumownersanduponsurrenderof
all their "condominium owner's" copies, cancel
thecertificatesoftitleofthepropertyandissuea
new one in the name of said condominium
ownersasproindivisocoownersthereof.
A:
1. Liberally, to facilitate the operation of
theproject
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
2.
DECLARATIONOFRESTRICTIONS
Suchrestrictionsshallconstitutealienuponeach
condominium in the project, and shall insure to
andbindallcondominiumownersintheproject.
Note:Suchliens,unlessotherwiseprovided,
may be enforced by any condominium
ownerintheprojectorbythemanagement
bodyofsuchproject.
A:Thedeclarationofrestrictionsshallprovidefor
themanagementoftheprojectbyanyoneofthe
followingmanagementbodies:
1. acondominiumcorporation,
2. an association of the condominium
owners,
3. a board of governors elected by
condominiumowners,or
4. a management agent elected by the
owners or by the board named in the
declaration.
5. votingmajorities,
6. quorums,
7. notices,
8. meetingdate,and
9. other rules governing such body or
bodies.
1. Astoanysuchmanagementbody;
a. For the powers thereof, including
powertoenforcetheprovisionsof
thedeclarationsofrestrictions;
b. For maintenance of insurance
policies, insuring condominium
owners against loss by fire,
casualty, liability, workmen's
compensation and other insurable
c.
d.
e.
f.
g.
h.
i.
2.
3.
4.
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
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F
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275
5.
6.
Note:Suchrighttopartitionordissolution
maybeconditionedupon:
a. failure of the condominium owners
torebuildwithinacertainperiod;
b. specified inadequacy of insurance
proceeds;
c. specified percentage of damage to
thebuilding;
d. adecisionofanarbitrator;or
e. upon any other reasonable
condition.
A:TheRegisterofDeedsshallenterandannotate
thedeclarationofrestrictionsuponthecertificate
of title covering the land included within the
project,ifthelandispatentedorregisteredunder
theLandRegistrationorCadastralActs.
POWERSOFANDRESTRICTIONSUPON
MANAGEMENTBODY
Q:Whataretherestrictionsimposedbythelaw
upon corporations which is also the
managementbodyofthecondominiumproject?
A:Therestrictionsareasfollows:
276
Q:Maythemanagementbodymayacquireand
hold, for the benefit of the condominium
owners, tangible and intangible personal
property and dispose of the same by sale or
otherwise?
CONDOMINIUMCORPORATIONS
Q:Whatisacondominiumcorporation?
Membership
Q:Whataretherulesregardingmembershipina
condominiumcorporation?
Note:Whenamemberorstockholderceasestoown
a unit in the project in which the condominium
corporation owns or holds the common areas, he
shall automatically cease to be a member or
stockholderofthecondominiumcorporation.
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
Q: May a condominium corporation sell,
exchange, lease or otherwise dispose of the
common areas owned or held by it in the
condominiumproject?
A:
GR:Duringitsexistence,itcannotdoso.
XPN:Ifauthorizedbytheaffirmativevoteof
allthestockholdersormembers.
A:
GR:Notavailable.Thelawprovidesthatthe
bylaws of a condominium corporation shall
provide that a stockholder or member shall
not be entitled to demand payment of his
sharesorinterestinthosecaseswheresuch
right is granted under the Corporation Law
xxx
XPN:Ifsaidstockholderormemberconsents
tosellhisseparateinterestintheprojectto
the corporation or to any purchaser of the
corporation'schoicewhoshallalsobuyfrom
the corporation the dissenting member or
stockholder'sinterest.
DissolutionandLiquidation
A:
1. The common areas owned or held by
the corporation shall, by way of
liquidation, be transferred proindiviso
andinproportiontotheirinterestinthe
corporation to the members or
stockholders thereof, subject to the
2.
A:Acondominiumcorporationmaybevoluntarily
dissolvedonly:
1. when the enabling or the master deed
of the project in which the
condominium corporation owns or
holdsthecommonareaisrevoked;and
2. uponashowingthat:
a. three years after damage or
destructiontotheprojectinwhich
the corporation owns or holds the
common areas, which damage or
destructionrendersamaterialpart
thereof unfit for its use prior
thereto, the project has not been
rebuilt or repaired substantially to
its state prior to its damage or
destruction;or
c. theprojecthasbeeninexistencein
excess of fifty years, that it is
obsolete and uneconomical, and
thatmorethanfiftypercentofthe
members of the corporation, if
nonstock, or the stockholders
representing more than fifty
percent of the capital stock
entitled to vote, if a stock
corporation, are opposed to the
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
V
ICE
C
HAIRFOR
A
DMINISTRATIONAND
F
INANCE
:
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277
repairorrestorationorremodeling
ormodernizingoftheproject;or
d.
e.
A:
GR:Thecorporationshallbedeemedtohold
apowerofattorneyfromallthemembersor
stockholders to sell and dispose of their
separateinterestsintheproject.
XPN: Unless otherwise provided for in the
declarationofrestrictions
A:Liquidationofthecorporationshallbeeffected
byasaleoftheentireprojectasifthecorporation
ownedthewholethereof,subjecttotherightsof
278
Q:WhatshouldtheCourtdoif,inanactionfor
partition of a condominium project or for the
dissolution of condominium corporation on the
ground that the project or a material part
thereof has been condemned or expropriated,
the Court findsthat theconditionsprovided for
intheCondominiumActorinthedeclarationof
restrictionshavenotbeenmet?
Assessment,NoticethereofandLienCreated
Q:Whoshouldpayforanassessmentuponany
condominium made in accordance with a duly
registereddeclarationofrestrictions?
A:Itisanobligationoftheownerthereofatthe
timetheassessmentismade.
A:Thenotice:
1. is to be registered with the Register of
Deeds of the city or province where
suchcondominiumprojectislocated.
2. shallstatethefollowing:
a. amount of such assessment and
suchotherchargesthereonasmay
beauthorizedbythedeclarationof
restrictions,
b. a description of the condominium
unit against which same has been
assessed,and
CIVILLAWTEAM:
ADVISER:ATTY.ELMERT.RABUYA;SUBJECTHEAD:ALFREDOB.DIMAFELIXII;
ASST.SUBJECTHEADS:KARENFELIZG.SUPNAD,LAMBERTOL.SANTOSIII;MEMBERS:PAULELBERTE.AMON,ALSTONANARNA,OZANJ.
FULLEROS,CECILIOM.JIMENO,JR.,ISMAELSARANGAYA,JR.;CONTRIBUTORS:LOISERAEG.NAVAL,MONICAJUCOM
SALES
c.
3.
Q:Whataretherulesasregardstheliencreated
incaseofunpaidassessments,etc?
A:
GR: Such lien shall be superior to all other
liens registered subsequent to the
registrationofsaidnoticeofassessment
XPNs:
1. realpropertytaxliensaresuperior;
2. whendeclarationofrestrictionsprovide
for the subordination thereof to any
otherliensandencumbrances.
A:
GR: No, the management body shall have
powertobidatforeclosuresale.
A:
1. If with the consent of or at the request
ofacondominiumownerorhisagentor
hiscontractororsubcontractor:
GR: it shall not be the basis of a lien
against the condominium of any other
condominiumowner
XPN:suchotherownershaveexpressly
consented to or requested the
performanceofsuchlabororfurnishing
ofsuchmaterialsorservices.
2.
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII
UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
Facultad de Derecho Civil
V
ICE
C
HAIRFOR
A
DMINISTRATIONAND
F
INANCE
:
J
EANELLE
C.
L
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VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ
279