1

CIVIL LAW
REVIEW II -
LAWON
SALES
Atty. Crisostomo Uribe - Course Outline (Dec.
!!"#
Donnell R. A$%ton & Recoletos 'e (%nil% - Colle$e
o) L%*

Art. 1458 (CC) By the contract of sale, one of

the contracting parties obligates himself to
transfer ownership of and to delier a
determinate thing, and the other to pay
therefor a price in money or its e!"ialent.
#hen one of the parties deliers a thing and
the other pays a price it constit"te a contract
of sale$
Not necess%rily. Not %ll 'eli+ery o) % t,in$ %n'
t,e concomit%nt -%yment o) % -rice constitute %
contr%ct o) s%le. It coul' be % contr%ct o) le%se.
W,%t is necess%ry is t,e intent o) t,e -%rties to
tr%ns)er o*ners,i- o+er t,e sub.ect m%tter o) t,e
contr%ct o) s%le.
Note/ S%le is % contr%ct %n' t,ere)ore0 t,e
-ro+ision on obli$%tions %n' contr%ct un'er t,e
ci+il co'e m%y $ener%lly %--ly.
#hat are the characteristics of a contract of
sale$
1. Consensu%l
. 1er)ecte' by meetin$ o) t,e min's %s to t,e
-rice %n' t,e ob.ect.
e2ce-t/ in c%ttle re$istr%tion 'ecree to
be % -er)ecte' contr%ct it re3uires to be in %
-ublic instrument0 re$istere' %n' % certi)ic%te
o) title be issue'.
4. It is % -rinci-%l contr%ct suc, t,%t it c%n st%n'
on its o*n )or its -er)ection %n' +%li'ity.
5. It is onerous *,ere bot, -%rties %re obli$e' to
$i+e somet,in$.
6. Commut%ti+e bec%use t,ere is e3ui+%lence o)
+%lue to be -er)orme' by bot, -%rties.
e2ce-t/ %le%tory contr%cts or s%le o)
,o-e. 7,e obli$%tion o) % -%rty *ill only %rise
u-on t,e ,%--enin$ o) % cert%in e+ent or
con'itions. 7,e -er)orm%nce o) one o) t,e
-%rties or bot, is contin$ent on t,e
occurrence o) % -%rticul%r e+ent.
e.$. s%le o) lotto tic8et is
contin$ent
u-on t,e numbers *oul' %--e%r in t,e 'r%*.
Insur%nce contr%cts.
9. Nomin%te contr%ct - ,%s % -%rticul%r
n%me to 'istin$uis, it )rom ot,ers.
As to n%ture/
1. mo+%ble or immo+%ble - 7,is is im-ort%nt
bec%use one must 'etermine t,e ob.ect o) t,e
s%le.
St%tute o) :r%u's/
%. mo+%ble
b. immo+%ble
(%ce'% L%*
Recto L%*
. A t,in$ or % ri$,t - im-ort%nt %s to t,e mo'e o)
'eli+ery.
4. V% l i ' 0 Vo i ' % b l e 0 Vo i ' 0 u n e n ) o r
c e % b l e
Rescissible etc.
#hat are the distinctions between absol"te
sale and conditional sale$
Absol"te %ale Conditional %ale
7,e seller 'oes not
reser+e ,is title o+er
t,e t,in$ sol'0
o*ners,i- -%sses
u-on 'eli+ery
*,et,er t,e buyer
,%s %ctu%lly -%i' %
sin$le cent%+o or
not.
Con'itions %re
im-ose' by t,e
seller in or'er t,%t
o*ners,i- *ill
-%ss.
O*ners,i-
%utom%tic%lly
-%sses )rom t,e
moment t,e
con'ition
,%--ene'.
Contract to sell
4
A recei-t *%s issue' by A to ; )or t,e sum o)
<68 %s -%rti%l -%yment )or % c%r0 t,e b%l%nce to
be -%i' %t t,e en' o) t,e mont,. Is t,is %
contr%ct o) s%le=
7,is is % contr%ct o) s%le. 7,is is not % contr%ct
to sell bec%use in % contr%ct to sell o*ners,i- is
reser+e' by t,e seller0 suc, t,%t 'es-ite 'eli+ery
to t,e buyer0 t,e buyer 'i' not %c3uire
o*ners,i- o+er t,e t,in$ u-on 'eli+ery.
In % contr%ct to sell0 u-on t,e ,%--enin$ o) t,e
con'ition or con'itions im-ose' by t,e seller0
o*ners,i- 'oes not %utom%tic%lly -%ss to t,e
buyer. 7,ou$, % contr%ct to sell is % s-eci%l )orm
o) % con'ition%l s%le0 it is % -eculi%r 8in' o) s%le
bec%use 'es-ite t,e ,%--enin$ o) %ll t,e
con'itions0 %n' 'es-ite %ctu%l 'eli+ery to t,e
buyer0 t,e buyer 'oes not %utom%tic%lly %c3uire
o*ners,i-.
U-on t,e ,%--enin$ o) t,e con'ition in %
contr%ct to sell0 t,e buyer is only $i+en t,e ri$,t
to com-el t,e seller to e2ecute % )in%l 'ee' o)
s%le.
&ation in payment
Art. 156 D%tion in -%yment0 *,ereby -ro-erty
is %lien%te' to t,e cre'itor in s%tis)%ction o) %
'ebt in money0 s,%ll be $o+erne' by t,e l%* on
s%les.
:or '%tion in -%yment to be $o+erne' by t,e l%*
on s%les it is re3uire' t,%t one o) t,e -re e2istin$
obli$%tion must be in money0 i) t,e ot,er
consi'er%tion is not in money co+ere' by '%tion
in -%yment0 it *ill not be $o+erne' by t,e l%* on
s%les0 suc, *ill be $o+erne' by t,e l%* on
no+%tion.
1r%ctic%lly t,ere is % c,%n$e in t,e ob.ect o) t,e
contr%ct. E2%m-le/ I) A o*es ; 1!!8 %n' A
*oul' o))er % c%r to V0 %n' i) ; %cce-ts0 suc,
*oul' be '%tion in -%yment. 7,is *oul' be
$o+erne' by t,e l%* on s%les bec%use t,e -re
e2sitin$ obli$%tion is in money.
>o*e+er0 i) A is obli$e' to 'eli+er % ,orse but
inste%' 'eli+ere' % c%r %n' ; %cce-ts0 t,is
*oul' be '%tion in -%yment but not un'er Art.
156 but by no+%tion by c,%n$in$ t,e ob.ect o)
t,e obli$%tion.
As to n%ture0 '%tion in -%yment is % s-eci%l )orm
o) -%yment0 *,ile s%les is % contr%ct.
In '%tion in -%yment t,ere must be % -re
e2istin$ obli$%tion. Since t,is is % s-eci%l )orm o)
-%yment0 t,ere ,%s to be %n obli$%tion. 7,ere is
no -re e2itin$ obli$%tion in % contr%ct o) s%le.
'assach"setts ("le
It is % rule *,ere % contr%ct *%s entere' into )or
% contr%ct )or % -iece o) *or8. :or e2%m-le0 %
-erson *,o entere' % store to buy s,oes0 but
since t,ere is no si?e t,%t *oul' )it suc, -erson0
t,e store o))ere' to m%8e % -%ir o) s,oes
s-eci%lly m%'e )or ,im. In % contr%ct o) s%le0 t,e
s,oes or'in%rily sol' %re )or t,e $ener%l m%r8et0
*,ile t,e s,oes s-eci%lly m%'e0 is % contr%ct )or
-iece o) *or8.
A obliged himself to delier to B a car wor)
*5+). B on the other hand, obliged himself to
delier to B a watch pl"s cash in the amo"nt
of 15+). #hat is the nat"re of the transaction
between A and B$
De-en'in$ on t,e intention o) t,e -%rties0 A %n'
; m%y consi'er %s one o) s%le or b%rter. I) t,e
intention o) t,e -%rties %re not cle%r b%se on t,e
%$reement0 t,e n%ture o) t,e contr%ct *oul'
'e-en' on t,e +%lue o) t,e *%tc,. I) t,e +%lue o)
t,e *%tc, is $re%ter t,%n 16!80 it *ill be b%rter0
but i) t,e +%lue o) t,e *%tc, is e3u%l or less t,%n
16!80 t,en it *oul' be s%le. 7,e +%lue ) t,e c%r
is irrele+%nt.
A gae B the e,cl"sie right to sell his denim
-eans, promising B *+. disco"nt on sales.
/oweer, it was stip"lated in their agreement
that B shall pay the price of this -eans 0+
days from deliery. After the -eans was
delier to B and before B co"ld sell the
-eans, the store was b"rned witho"t the fa"lt
of anyone. 1h"s, can B still be compelled to
pay the price of this -eans$
Un'er Art. 15990 in construin$ % contr%ct
cont%inin$ -ro+isions c,%r%cteristic o) bot, t,e
5
contr%ct o) s%le %n' o) t,e contr%ct o) %$ency to
sell0 t,e essenti%l cl%uses o) t,e *,ole
instrument s,%ll be consi'ere'.
I) %ssumin$ t,is is % contr%ct o) %$ency t,e
o*ners,i- 'oes not -%ss to ;0 t,e o*ner-seller
s,%ll be%r t,e loss %n' notin$ t,%t ; is not
ne$li$ent un'er t,e )%cts. I) ,o*e+er it is %
contr%ct o) s%le0 t,en o*ners,i- -%sses to ;0
%n' since ,e is t,e o*ner0 ,e be%rs t,e loss.
Since bot, %re c,%r%cteristic o) % contr%ct o)
s%le %n' %$ency0 t,e -ro+isions o) Art. 1599
,o*e+er s,%ll be %--lie'. >ere0 t,e essenti%l
cl%uses o) t,e *,ole instrument must be
in3uire' into. One o) t,e cl%uses or con'ition
%$ree' u-on by t,e -%rties is t,%t @; ,%' to -%y
t,e -rice *it,in 9! '%ys.A As suc,0 t,%t *oul'
m%8e t,e contr%ct %s one o) s%le %n' not o)
%$ency. 7,is is bec%use 9! '%ys )rom 'eli+ery0
*,et,er or not ; ,%s sol' t,ose .e%ns to ot,er
-ersons0 ,e is %lre%'y obli$e' to -%y t,e -rice.
;ein$ % contr%ct o) s%le t,ere)or %n' t,ere
,%+in$ % 'eli+ery0 o*ners,i- -%sses to t,e
buyer. >ence0 t,e buyer be%rs t,e loss.
7,ere)ore ,e c%nnot be com-elle' to -%y t,e
-rice o) t,e .e%ns.
2ssential elements of a contract of sale$
1. Consent o) t,e contr%ctin$ -%rties
. O b . e c t o r s u b . e c t m % t t e r * , i
c , i s % 'etermin%te t,in$ or 'etermin%te
sub.ect m%tter (m%y eit,er be % t,in$ or ri$,t#.
Ser+ice c%nnot be % sub.ect m%tter o) %
contr%ct o) s%le.
4. C%use or consi'er%tion
As to t,e seller/ t,e -rice in money or
its e3ui+%lent.
#hat is the effect of a contract of sale when
there is no consent gien by one or both of
the parties$
I) consent is not $i+en by one or bot, o) t,e
-%rties0 t,e contr%ct is +oi' bec%use one o) t,e
essenti%l elements is l%c8in$. Un'er t,e l%*0 it is
consi'ere' %s % )ictitious contr%ct. A )ictitious
contr%ct *oul' norm%lly be t,%t @t,e si$n%ture o)
t,e -%rties in t,e s%le *%s )or$e'. I) t,e
si$n%ture o) t,e seller *%s )or$e'0 t,%t *oul' be
% )ictitious contr%ct. 7,e %lle$e' seller *ill not
,%+e -%rtici-%tion in t,e e2ecution o) t,e
contr%ct.

%im"lated Contract
>Ere t,e -%rties %ctu%lly ,%+e -%rtici-%tion.
7,ey (t,e -%rties# +olunt%rily si$n t,e 'ee' o)
s%le0 ,o*e+er t,ey 'o not inten' to be boun' by
t,e terms o) t,e contr%ct0 or t,ey m%y inten' to
be boun' but not un'er % contr%ct o) s%le but on
some ot,er contr%ct.
Bin's o) simul%te' contr%cts
1. Absolutely simul%te' Contr%cts - >ere0 t,e
-%rties 'o not *%nt to be boun' by t,e
contr%ct0 t,e common re%son is to 'e)r%u'
cre'itors. :or e2%m-le0 t,e 'ebtor *ol' sell
,is rem%inin$ -ro-erties in % simul%te'
contr%ct to m%8e it %--e%r t,%t ,e ,%s no
-ro-erty0 t,%t m%y be re%c,e' by ,is
cre'itors.
. Rel%ti+ely simul%te' contr%cts - >ere it m%y
%--e%r to be in % +%li' 'ee' o) s%le but t,ey
%ctu%lly inten' to enter into %not,er contr%ct
suc, t,%t it is %ctu%lly % 'on%tion or to
circum+ent t,e -ro+isions o) t,e le$itime.
3f consent is gien, wo"ld it mean that the
contract is alid$
Not necess%rily0 bec%use *,en consent is $i+en
by %n inc%-%cit%te' -erson0 suc, is +oi' or
+oi'%ble %s t,e c%se m%y be. 7,is is bec%use
t,ere %re s-eci)ic rules )ollo*e' 'e-en'in$ on
t,e b%sis o) inc%-%city.
#hat are the )inds of incapacity
1. Absolute inc%-%city - A -%rty c%nnot +%li'ly
$i+e consent to %ny contr%ct.
. Rel%ti+e inc%-%city - 7,e -%rty is -ro,ibite' in
enterin$ into s-eci)ic contr%cts or s-eci)ic
-ersons or t,in$s.
6
%. S%le bet*een s-ouses - 7,e SC *oul'
consistently consi'er t,is contr%ct %s +oi'0
e2ce-t/
%1. *,en t,e s-ouses in t,eir m%rri%$e
settlement0 %n' %$ree' t,ey constitute
com-lete se-%r%tion o) -ro-erty. 7,ey
c%n enter into % contr%ct o) s%le *it,
e%c, ot,er.
%. E+en i) t,ey 'i' not e2ecute %
m%rri%$e settlement0 i) 'urin$ t,eir m%rri%$e
obt%ine' % .u'ici%l 'ecl%r%tion o) com-lete
se-%r%tion o) -ro-erty.
%. s%le by -ersons mentione' un'er Art. 15"10
n%mely/
b1. 7,e $u%r'i%n0 t,e -ro-erty o) t,e
-erson or -ersons *,o m%y be un'er
,is $u%r'i%ns,i-C
b . A $ e n t s 0 t , e - r o - e r t y *
, o s e % ' m i n i s t r % t i o n o r s % l e m % y
, % + e b e e n entruste' to t,em0 unless t,e
consent o)
t,e -rinci-%l ,%s been $i+enC
b40 E2ecutors %n' %'ministr%tors0 t,e
- r o - e r t y o ) t , e e s t % t e u n '
e r
%'ministr%tionC
b5. 1ublic o))icers %n' em-loyees0 t,e
- r o - e r t y o ) t , e S t % t e o r o )
% n y s u b ' i + i s i o n t , e r e o ) 0 o r o )
% n y $o+ernment-o*ne' or controlle'
cor-or%tion0 or institution0 t,e
%'ministr%tion o) *,ic, ,%s been
intruste' to t,emC t,is -ro+ision s,%ll
%--ly to .u'$es %n' $o+ernment
e2-erts *,o0 in %ny m%nner *,%tsoe+er0 t%8e
-%rt in t,e s%leC
b 6 . D u s t i c e s 0 . u ' $ e s 0 - r o s
e c u t i n $ %ttorneys0 cler8s o) su-erior %n'
in)erior courts0 %n' ot,er o))icers %n'
em-loyees connecte' *it, t,e
%'ministr%tion o) .ustice0 t,e -ro-erty
%n' ri$,ts in liti$%tion or le+ie' u-on %n
e2ecution be)ore t,e court *it,in *,ose
.uris'iction or territory t,ey e2ercise
t,eir res-ecti+e )unctionsC t,is -ro,ibition
inclu'es t,e %ct o) %c3uirin$ by %ssi$nment %n'
s,%ll %--ly to l%*yers0 *it, res-ect to t,e
-ro-erty %n' ri$,ts *,ic, m%y be t,e
9
ob.ect o) %ny liti$%tion in *,ic, t,ey m%y
t%8e -%rt by +irtue o) t,eir -ro)ession.
b9. Any ot,ers s-eci%lly 'is3u%li)ie' by
l%*.
c. Aliens %re -ro,ibite' )rom %c3uirin$ -ri+%te
l%n's by -urc,%se0 e2ce-t/
c1. )ormer n%tur%l born citi?ens
Note/ E+en i ) consent i s $i+en by one
c%-%cit%te' but suc, consent is +iti%te' consent0
t,e contr%ct is merely +oi'%ble eit,er by )r%u'0
mist%8e0 intimi'%tion0 un'ue in)luence %n'
+iolence.
I) t,e -%rty $i+in$ consent is in t,e n%me o)
%not,er -erson0 but *it,out t,e %ut,ority o) suc,
-erson or %ut,ority o) t,e l%*0 suc, contr%ct
s,%ll be unen)orce%ble.
1wo )inds of capacity
1. Duri'ic%l c%-%city
It is t,e )itness to be t,e sub.ect o) le$%l
rel%tions.
I) t,e -%rty ,%s no .uri'ic%l c%-%city0 t,e
contr%ct is 'e)initely +oi'.
All li+in$ n%tur%l -ersons ,%+e .uri'ic%l
c%-%city.
An %lle$e' cor-or%tion *,ic, ,%s not
been re$istere' *it, t,e SEC ,%s no
.uri'ic%l c%-%city.
. C%-%city to %ct
It is t,e -o*er to 'o %cts *it, le$%l
e))ects.
Wit,out c%-%city to %ct0 norm%lly t,e
contr%ct s,%ll be +oi'%ble.
1%rticul%r restriction *it, res-ect to
c%-%city to %ct is minority or ins%nity0 'e%)
mutes *,o 'oes not 8no* ,o* to re%' %n'
*rite or -ersons su))erin$ )rom
<
ci+il inter'iction.
> o * e + e r0 i ) s u c , m i n o r % c t
u % l l y misre-resente' %s to ,is %$e0 ,e *ill
be boun' to suc, contr%ct0 un'er t,e -rinci-le
o) esto--el.
Note t,%t *,en s%le o) items *,ic, %re
necess%ry *oul' bin' t,%t minor0 but
not %s to t,e %ctu%l contr%ct -rice but
only t,e re%son%ble -rice o) t,ose
items.
4b-ect of %"b-ect matter of a contract of sale
(determinate thing or right)
1. 7,in$ - Re3uisites o) s%les %s to t,in$s/
%. 7,e t,in$ must be *it,in t,e commerce o)
men0 suc, %s s%le o) n%+i$%ble ri+ers0 s%le o)
c%'%+ers0 s%le o) intern%l or$%ns.
. (ust be licit (not -ro,ibite' by l%*#
4. 7,ey must be 'etermin%te
S%le o) % c%r %n' s%le o) % mitsubis,i
l%ncer $l2 )orest bl%c8 !!< mo'el.
A t,in$ is consi'ere' 'etermin%te only
*,en it is -%rticul%rly 'esi$n%te' or
-,ysic%lly se$re$%te' )rom %ll ot,ers
o) t,e s%me cl%ss.
S%le o) % c%r s,%ll be +oi'0 but t,e s%le
o) % mitsubis,i l%ncer $l2 )orest bl%c8
!!< mo'el is % +%li' s%le bec%use
un'er Art. 159! (# o) t,e ne* ci+il co'e
-ro+i'es t,%t t,e re3uisite t,%t % t,in$ be
'etermin%te is s%tis)ie' i) %t t,e time t,e
contr%ct is entere' into0 t,e t,in$ is c%-%ble o)
bein$ m%'e
'etermin%te *it,out t,e necessity o) %
ne* or )urt,er %$reement bet*een t,e
-%rties.
3f A and B agreed that A wo"ld sell and
transfer ownership oer a palay that wo"ld
be harested in a specific rice field and in a
specific season. /oweer, "pon the arrial of
the period nothing has been harested. #hat
is the stat"s of the sale$ %ince nothing has
been harested, wo"ld the contract be
considered oid$ 'ay the seller be held
liable for damages$
7,in$s ,%+in$ t,e -otenti%l e2istence m%y be
t,e ob.ect o) % +%li' s%le. As lon$ %s t,e t,e 4
essenti%l re3uisites o) % contr%ct o) s%le is
-resent0 t,en t,ere is % +%li' contr%ct o) s%le.
7,e seller m%y not be li%ble )or '%m%$es
bec%use t,ere %re e2cuses )or non -er)orm%nce
o) obli$%tion bec%use it *%s 'ue to )ortuitous
e+ent0 %s suc, it is e2cuse'. I) ,o*e+er0 t,e
)%ilure to -ro'uce -%l%y is t,rou$, ne$li$ence0
,e is li%ble.
%ale of a lotto tic)et is it a alid sale$
I) be)ore t,e 'r%* suc, is % +%li' s%le o) t,e
tic8et *,et,er t,e *innin$ numbers %--e%re' or
not.
I) %)ter t,e 'r%*0 *oul' 'e-en' on *,et,er it is %
*innin$ or % losin$ tic8et. S%le o) % +%in ,o-e is
% +oi' s%le %s in t,e l%tter c%se.
3n an agreement between A and B where A
sold a parcel of land to B, with a right to
rep"rchase within 1 year. 4n the third
month,, B sold the same parcel of land to C.
4n the 11th month, A offered to rep"rchase
the land. #ho had the better right between A
and C$ or, will the sale between B and C be a
alid sale noting that the sale is with a right
to rep"rchase$
S%le is % consensu%l contr%ct. As lon$ %s t,ere
is % meetin$ o) t,e min's %s to t,e ob.ect %n' %s
to t,e -rice0 t,en t,ere is % +%li' %n' -er)ecte'
s%le. 7,is is % +%li' s%le e+en i) t,e ob.ect o) t,e
s%le is *it, % ri$,t to re-urc,%se. :urt,er0 un'er
Art. 1596 7,in$s sub.ect to % resolutory
con'ition m%y be t,e ob.ect o) t,e contr%ct o)
s%le. Note/ It is t,e o*ners,i- o) % t,in$ *,ic,
c%n be t,e sub.ect o) % resolutory con'ition %n'
not t,e t,in$.
Since0 A ,%' t,e ri$,t to re-urc,%se0 A ,%' t,e
better ri$,t. >o*e+er0 *,en C is % innocent
-urc,%ser )or +%lue %s *,en t,ere is no
%nnot%tion %t t,e b%c8 o) t,e title o) t,e -%rcel o)
l%n' t,%t it is sub.ect to % ri$,t to re-urc,%se0
%n' in suc, c%se C *ill ,%+e % better ri$,t.
E
%ale of a right is otherwise )nown as$
Assi$nment o) % ri$,t.
3s assignment of a right a sale$
Not necess%rily. I) t,e %sssi$nment is *it, %
+%lu%ble consi'er%tion0 it is % s%le0 i) $r%tuitous
or by '%tion in -%yment it is not % s%le %s it is
not )or consi'er%tion. E2%m-les %re s%le o) %
cre'it or s%le o) s,%res o) stoc8 %re consi'ere'
consi'ere' %s ri$,ts.
: u r t , e r m o r e 0 t , e r i $ , t m u s t n o
t b e instr%nsmissible. :or % ri$,t to be t,e
ob.ect o) % contr%ct o) s%le0 t,e s%me must not
be instr%nsmissible. Un'er t,e l%* t,e only t,ree
$ener%l re%sons *,y % ri$,t m%y not be
tr%nsmissble %re 1# by n%ture0 #by sti-ul%tion0
4#l%*.
Ri$,ts *,ic, %re -urely -erson%l c%nnot be %
sub.ect o) s%le by n%ture %re intr%nsmissible0
ri$,ts *,ere -erson%l 3u%li)ic%tions o) % -erson
%re consi'ere'. Wit, res-ect to sti-ul%tions0
t,ey m%y be tr%nsmissible by n%ture but by
s t i - u l % t i o n t , e y m % y b e c o n s i '
e r e ' instr%nsmissible. Suble%se o) % -ro-erty
m%y be tr%nsmistte' to %not,er but by
sti-ul%tion0 it c%nnot be 'one %n' ,ence
instr%nsmissible. In -%rtners,i-0 t,e ri$,ts in %
s-eci)ic -ro-erty0 *,ere t,e l%* re3uires t,%t
%ssi$nment c%nnot be 'one *it,out t,e consent
o) %ll t,e -%rtners0 t,e %ssi$nment o) one c%nnot
be 'one *it,out t,e consent o) %ll t,e -%rtners.
3s the sale of rights perfected by mere
consent$
Fes. ;y mere meetin$ o) t,e min's0 %n' *it,out
t,e e2ecution o) % s-eci)ic instrument0 t,e s%le
s,%ll be +%li'. >o*e+er0 to bin' t,ir' -ersons
suc, s%le must be recor'e' in t,e re$istry o)
-ro-erty.
3n a deed of sale, where the price stated in
the deed was 1++ lapad (1+,+++ yen) 5 1
million yen, as s"ch the sale not being in
6hilippine peso, a alid sale$ Can the seller
compel the b"yer to pay in that c"rrency$
7,%t *oul' be % +%li' s%le e+en i) t,e currency
is not 1,ili--ine currency0 %s t,e l%* re3uires
only t,%t it be in money or it m%y e+en be its
e3ui+%lent li8e -romissory notes0 or letters o)
cre'it.
I) t,e contr%ct *oul' be entere' into %)ter RA
6" *%s re-e%le' by RA E1E4 in 1""90 t,en t,e
seller c%n be com-elle' to -%y in % currency
ot,er t,%n 1,ili--ine -eso. Ot,er*ise
t,e seller c%nnot com-el t,e buyer to -% in
.%-%nese currency.
Can there be a alid payment in 1+,+++ 1
peso coins$
Fes0 but t,e seller c%nnot be com-elle' to
%cce-t bec%use un'er 1,ili--ine l%* 1 -eso
coins only ,%+e le$%l ten'er -o*er u- to 6!
-esos.
%ale of shares of stoc)s al"ed at 5+++ b"t
there was no date as to the al"e of the
shares
7,e -rice must be cert%in %s one o) t,e
re3uirement in or'er t,%t t,e s%le s,%ll be +%li'.
7,e '%te is +ery m%teri%l bec%use t,e +%lue o)
t,e s,%res c,%n$es 'e-en'in$ on t,e '%te.
E+en i) t,e '%te ,%s been )i2e' but t,e time ,%s
not been consi'ere' suc, %s t,e o-enin$ %n'
closin$ *it, res-ect to suc, e2c,%n$e *oul'
%))ect t,e +%li'ity o) t,e s%le. ;ec%use i) t,e
+%lue u-on t,e o-enin$ is 6! -esos but in t,e
closin$ it is only 4" -esos0 t,en suc, is not
cert%in *,en t,e time is not consi'ere'.
#ho can fi, the price of the sale$
It is best t,%t t,e -%rties s,%ll %$ree %s to t,e
-rice o) t,e s%le0 but t,e -%rties m%y %$ree %s to
*,o m%y )i2 t,e -rice.
'ay the sale be perfected if one of the
parties is designated to fi, the price$
It is +%li' -ro+i'e' t,e -erson 'esi$n%te' to )i2
t,e -rice0 t,e -rice )i2e' must be %cce-te' by
t,e ot,er -%rty. As to t,e -rice0 i) one o) t,e
-%rties 'esi$n%te' )i2e' it %t 1 million but t,e
ot,er -%rty 'i' not %cce-t0 t,ere is no -er)ecte'
"
contr%ct o) s%le0 bec%use t,e l%tter 'i' not
%cce-t0 t,ere bein$ no meetin$ o) t,e min's.
'ay a third person be tas)ed by the original
parties to fi,ed the price$
It is +oi' *,en t,e t,ir' -erson 'oes not *%nt to
)i2 t,e -rice or un%ble to )i2 t,e -rice.
I) suc, t,ir' -erson *%s %ble to )i2 t,e -rice but
it is too ,i$, or it is too lo* %n' t,ere is )r%u'
em-loye'0 t,e contr%ct is not +oi'0 t,e reme'y
o) suc, -%rty is to $o to court to )i2 t,e -rice.
'ay a sale be alid if the price of a car is
al"ed at 1 peso$
Fes0 bec%use un'er t,e l%* $ross in%'e3u%cy
%s to t,e -rice 'oes not in+%li'%te t,e contr%ct0
e2ce-t %s ot,er*ise -ro+i'e' by l%*.
An e2%m-le o) t,is e2ce-tion is t,%t o) lesion
*,ere suc, *oul' in+%li'%te t,e contr%ct o) s%le
un'er Art. 14E1 *,ere t,e $u%r'i%n sells t,e
-ro-erty o) t,e *%r' %n' t,ere is lesion o) more
t,%n 6G o) t,e +%lue o) suc, t,in$ suc,
contr%ct is rescissible. I) t,e buyer s,oul' be t,e
$u%r'i%n Art. 15E1 s,oul' %--ly %n' t,e contr%ct
s,%ll be +oi'.
I) t,ere is % $ross in%'e3u%cy %n' t,e -%rties
inten' %not,er contr%ct0 t,en suc, *oul' be %
simul%te' s%le0 %n' %s suc, t,e contr%ct s,%ll
be +oi'0 %s *,en t,e re%l -ur-ose o) t,e s%le is
'on%tion.
3s there a need for deliery in order that a
contract of sale be perfected$
As % consensu%l contr%ct t,ere is no nee' )or
'eli+ery in or'er t,%t % contr%ct o) s%le *ill be
-er)ecte'. 7,e only 3uestion is ,ere t,e time
*,en t,e contr%ct is -er)ecte'.
4ption sale
An o-tion s%le is -er)ecte' u-on t,e )%ll o) t,e
,%mmer or %ny ot,er custom%ry m%nner by
*,ic, t,e s%me m%y be consi'ere' -er)ecte'.
;e)ore t,e )%ll o) t,e ,%mmer0 t,e buyer *,o
m%'e ,is bi' m%y %ctu%lly *it,'r%* ,is bi'.
Wit, res-ect to t,e %uctioneer0 ,e m%y *it,'r%*
%s % rule0 be)ore t,e )%ll o) t,e ,%mmer. Unless
t,e bi''in$ ,%s been %nnounce' to be *it,out
reser+e' %s )%r %s t,e %uctioneer is concerne'.
4ption contracts
In t,e c%se o) S%nc,e? +s. Ri$os0 Ri$os o))ere'
to sell % -%rcel o) l%n' to S%nc,e? )or % cert%in
-rice0 %n' Ri$os $%+e S%nc,e? ye%rs *it,in
*,ic, to 'eci'e *,et,er ,e *ill buy it or not. In
o-tions t,e o-tionee or o))eree ,e is not boun'
to -urc,%se0 but ,e ,%s t,e o-tion. 7,ere)ore
S%nc,e? ,%s t,e o-tion on *,et,er to buy t,e
l%n' or not. ;e)ore t,e l%-se o) t,e ye%r
-erio'0 S%nc,e? tol' Ri$os t,%t ,e is buyin$ t,e
l%n'0 but Ri$os re)use' to sell it %n' s%i' t,%t ,e
*%s not boun' by t,is %$reement bec%use t,ere
*%s no o-tion money $i+en by S%nc,e? )or l%c8
o) consi'er%tion.
;ut t,e SC s%i' t,%t since S%nc,e? t,e o))eree
%cce-te' t,e o))er %n' consi'ere' to buy *it,in
t,e -erio' be)ore t,e o))er *%s *it,'r%*n %
-er)ecte' contr%ct o) s%le *%s cre%te' e+en
*it,out t,e o-tion money $i+en by t,e o))eree.
In t,is c%se t,ere *%s no o-tion contr%ct0 %n'
t,is is merely %n o-tion %$reement *,ereby
*,%t *%s $i+en is merely %n o))er on t,e -%rt o)
R i $ o s 0 t , e r e ) o r e b e ) o r e t , e o -
t i o n * % s *it,'r%*n re$%r'less *,et,er %n
o-tion money is $i+en0 % -er)ecte' contr%ct o)
s%le *%s cre%te'.
Assumin$ t,ere *%s o-tion money0 be)ore t,e
o))eree 'eci'e to buy t,e o))error *it,'r%* on
t,e 9t, mont,0 but on t,e 1!t, mont, t,e o))eree
'eci'e' t,%t t,e o))eror no* *%nt to buy. C%n
t,e o))eree com-el t,e seller to sell t,e o))er
,%+in$ been *it,'r%*n be)ore it *%s %cce-te'=
No. 7,e %ction )or s-eci)ic -er)orm%nce *ill not
-ros-er bec%use t,e o))eree *,o 'eci'e' to
buy0 *,en t,e o))error *it,'r%* t,e s%me0 t,ere
is no more o))er to be consi'ere'.
;ut t,e o))eree c%n cl%im )or '%m%$es bec%use
t,e o))error is boun' to $i+e t,e o))eree ye%rs
*it,in *,ic, to 'eci'e. >e is li%ble not un'er %
-er)ecte' contr%ct o) s%le but on % -er)ecte'
contr%ct to o))er.
1!
4ption money disting"ished from earnest
money
O-tion money is not consi'ere' -%rt o) t,e
-riceC e%rnest money is consi'ere' %s -%rt o)
t,e -rice but %lso consi'ere' %s -roo) o) %
-er)ecte' contr%ct o) s%le.
Note ,o*e+er0 %s 'eci'e' by t,e SC0 *,en t,e
o-tion money *ill be tre%te' by t,e -%rties %s
-%rt o) t,e -rice0 t,e s%me s,%ll be bin'in$
bet*een t,e -%rties. Wit,out sti-ul%tion0 it is not
consi'ere' -%rt o) t,e -rice. O-tion money is %
consi'er%tion )or t,e o-tion.
2arnest money
E%rnest money m%y be c%lle' by %ny ot,er
n%me but i) it is consi'ere' by t,e -%rties %s -%rt
o) t,e -rice0 suc, *oul' be consi'ere' %s
e%rnest money.
>o*e+er0 e+en i) t,ere is e%rnest money0 it 'oes
not me%n t,%t t,ere is %lre%'y % -er)ecte'
contr%ct o) s%le. I) it is merely % -roo) o) %
-er)ecte' contr%ct o) s%le. E+en i) t,ere is
e%rnest money $i+en0 i) t,e contr%ctin$ -%rties
,%+e not %$ree' %s to t,e tot%l %mount o) t,e
-urc,%se -rice0 t,en t,ere *ill ne+er be %
contr%ct o) s%le.
E+en t,ou$, t,ey ,%+e %$ree' %s to t,e tot%l
%mount o) t,e -rice %n' %n e%rnest money is
$i+en0 %n' *ere %ble to %$ree %s to t,e tot%l
%mount o) t,e -rice0 but not %s to t,e ob.ect t,en
t,ere *ill be no -er)ecte' contr%ct o) s%le.
E%rnest money is not t,e only re3uirement in %
-er)ecte' contr%ct o) s%le.
1here is a perfected sale by the mere
meeting of the minds, does it mean that it is
already enforceable$
Not t,%t u-on -er)ection t,e -%rties to suc,
contr%ct0 t,e -%rties %lre%'y ,%+e t,e ri$,t to
com-el t,e -%rties to -er)orm t,eir res-ecti+e
obli$%tions. ;ut -er)ection is sub.ect to
)orm%lities re3uire' by l%* li8e t,e st%tute o)
)r%u's.
7,ere m%y be % meetin$ o) t,e min's0 but t,e
s%me s,%ll be unen)orce%ble.
As % rule0 t,ere is no %ctu%l )orm %s -ro+i'e' in
Art. 15E4 t,%t % contr%ct o) s%le m%y be in
*ritin$0 or by *or' o) mout,0 or -%rtly in *ritin$
%n' -%rtly by *or' o) mout, 0 or m%y be in)erre'
)rom t,e con'uct o) t,e -%rties )or %s lon$ %s t,e
essenti%l re3uisites %re -resent. ;ut ,o*e+er0
*,en t,e l%* itsel) -ro+i'es )or % -%rticul%r )orm
t,en t,e s%me must be com-lie' *it, in or'er
)or it to be en)orce%ble0 suc, %s t,e st%tute o)
)r%u's %n' t,e c%ttle re$istr%tion 'ecree.
%tat"te of 7ra"ds
In s%le o) % -%rcel o) l%n' *,ic, is not in *ritin$0
is % +%li' contr%ct but unen)orce%ble.
I) t,e ob.ect o) t,e s%le is % mo+%ble0 t,e +%lue
o) t,e -rice %$ree' u-on must be consi'ere'
%n' not t,e %ctu%l +%lue o) t,e -rice must be
consi'ere'. I) t,e -rice is %t le%st 6!! -esos %n'
t,e s%me is not in *ritin$0 t,e s%me is
unen)orce%ble. E+en i) t,e -rice is less t,%n 6!!
-esos t,e s%me must be in *ritin$ *,en t,e
s%me is not to be -er)orme' *it,in 1 ye%r.
In t,e c%se o) 1%re'es +s. A3uino0 1%re'es ,ere
*%s % -ros-ecti+e buyer %n' A3uino *%s t,e
o*ner o) % -%rcel o) l%n'. 7,e ne$oti%tion *%s
m%'e t,rou$, letters %n' tele$r%ms. Ultim%tely
t,e o*ner m%'e % letter si$ne' by ,im to
1%re'es st%tin$ t,%t ,e %n' ,is *i)e %lre%'y
%$ree' to sell t,e l%n' %t t,e s-eci)ic -rice.
>o*e+er0 t,e e2ecution o) t,e s%le s,%ll be
m%'e u-on %rri+%l o) 1%re'es in 1%l%*%n0 %s
t,e l%tter is )rom Nort,ern Lu?on. W,en 1%re'es
%rri+e' in 1%l%*%n0 t,e seller s%i' t,%t ,e *%s
no lon$er intereste' in sellin$ t,e l%n'. >ence0
1%re'es )ile' %n %ction to com-el A3uino to sell
t,e l%n'. A3uinoHs 'e)ense on t,e ot,er ,%n'
*%s ,e St%tute o) :r%u's0 since t,ere *%s no
'ee' o) s%le0 t,ere *%s no -er)ecte' contr%ct o)
s%le. 7,e SC rule' t,%t t,e contr%ct *%s no
lon$er co+ere' by t,e st%tute o) )r%u's since
t,ere *%s %lre%'y % letter. Un'er t,e l%*0
s-eci)ic%lly un'er Art. 15!4 e+en i) t,e contr%ct
'oes not com-ly *it, t,e st%tute o) )r%u's0 t,e
s%me s,%ll be en)orce%ble %n' no lon$er
co+ere' un'er t,e o-er%tion o) t,e st%tute o)
)r%u's *,en t,e s%me *%s m%'e t,rou$, some
note or memor%n'um0 be in *ritin$0 %n'
subscribe' by t,e -%rty c,%r$e'0 or by ,is
11
%$ent. >ence0 A3uino c%n be com-elle' to
e2ecute % )in%l 'ee' o) s%le.
3n a deed of sale there can be 1++8s ob
obligations of the endors beca"se of the
stip"lation. 1here are only few obligations
imposed by law to the endors, and these
are9
1. 7,e obli$%tion to tr%ns)er o*ners,i-
. 7,e obli$%tion to 'eli+er
4. 7,e obli$%tion to *%rr%nt t,e t,in$
5. 7,e obli$%tion to t%8e c%re o) t,e t,in$ sol'
*it, t,e 'ili$ence o) % $oo' )%t,er o) t,e
)%mily )rom t,e time o) -er)ection u-to t,e
time o) 'eli+ery.
6. 7,e obli$%tions to -%y t,e c%-it%l $%ins t%2
9. 7,e obli$%tions to 'eli+er t,e )ruits
4bligations to delier the fr"its
A sale of a mango plantation between A and
B, A agreed to delier to B the fr"its only
after 0 months from the perfection of the
sale. &espite the arrial of the period, the
seller too) him 1 month to delier the fr"its
to the b"yer. A howeer, sold the fr"its to a
third person : in good faith. Can B recoer
the fr"its from :$ #hat are the remedies of
the b"yer as against the seller$
Un'er t,e l%* un'er Art. 164<0 7,e +en'or is
boun' to 'eli+er t,e t,in$ sol' %n' its
%ccessions %n' %ccessories in t,e con'ition in
*,ic, t,ey *ere u-on t,e -er)ection o) t,e
contr%ct.
All t,e )ruits s,%ll -ert%in to t,e +en'ee )rom t,e
'%y on *,ic, t,e contr%ct *%s -er)ecte'.
Art. 164< ,o*e+er s,oul' be consi'ere' in
rel%tion to Art. 1195 *,ic, -ro+i'es t,%t @t,e
cre'itor ,%s % ri$,t to t,e )ruits o) t,e t,in$ )rom
t,e time t,e obli$%tion to 'eli+er it %rises.
>o*e+er0 ,e s,%ll %c3uire no re%l ri$,t o+er it
until t,e s%me ,%s been 'eli+ere' to ,imA.
:rom t,e )ore$oin$ t,ere)ore t,e +en'or %ctu%lly
,%s ri$,ts to t,e )ruits but not )rom t,e time o)
-er)ection. ; is only entitle' to t,e )ruits o) t,e
t,in$ )rom t,e en' o) t,e 9 mont, -erio' b%se
on t,eir %$reement bec%use until suc, time
t,ere is no obli$%tion to 'eli+er *,ic, %rise.
Secon'ly0 t,e buyer c%nnot com-el t,e buyer to
recei+e t,e )ruits bec%use ,e s,%ll not %c3uire
re%l ri$,ts o+er suc, )ruits until t,e 'eli+ery o)
t,e t,in$. 7,e buyerHs reme'y is $oin$ %)ter t,e
seller.
4bligation to ta)e care of the thing
7,e -remise in t,is 8in' o) obli$%tion o) t,e
seller is % 'etermin%te t,in$. I) t,e t,in$ sol' is %
$eneric t,in$0 t,ere is not,in$ to be t%8en c%re
o)0 it *ill become 'etermin%te only u-on 'eli+ery.
One scen%rio *,ere t,e seller 'oes not ,%+e t,e
obli$%tion to t%8e c%re o) t,e t,in$ )rom t,e time
o) -er)ection0 *,en t,e buyer %lre%'y *%s in
-ossession o) t,e t,in$ %t t,e time o) -er)ection.
4bligation to pay e,penses or capital gains
ta,
7,rou$, sti-ul%tion0 t,e -%rties c%n %$ree %s to
*,o is $oin$ to -%y t,e t%2.
'ay a person sell something which does not
belong to him$ (Bar ;"estion)
Fes. O*ners,i- o+er % t,in$ is not % re3uisite in
or'er )or % s%le to become +%li'. ;ut i) t,e seller
'oes not o*n t,e t,in$ ,e m%y ,%+e % -roblem
i n - e r ) o r m i n $ , i s o b l i $ % t i o n t o
t r % n s ) e r o*ners,i-. 7,e -roblem %ctu%lly is
*,et,er or not t,e buyer %c3uire o*ners,i- o+er
t,e t,in$ sol' by t,e -erson sellin$ *,o 'oes
not o*n t,e t,in$. 7,us0 only t,ose -ersons
*,o ,%+e t,e ri$,t to sell c%n tr%ns)er
o*ners,i-.
7,e o*ner or e+en i) not t,e o*ner % -erson ,%s
been $i+en %ut,ority by t,e o*ner0 t,ere)ore ,e
*ill ,%+e t,e ri$,t to sell0 or t,e l%* %ut,ori?es %
-erson t,e -o*er to sell (%rt. 16!6 st%tutory
-o*er to sell# (e.$. t,e not%ry -ublic0 t,e
-le'$ee un'er -le'$e0 un'er t,e mort$%$e l%*
t,e li3ui'%tors ,%+e %ut,ority to sell0 t,e
$u%r'i%n0 recei+ers etc#0 t,ose *,o ,%+e t,e
%ut,ority o) t,e court (s,eri)) in %n e2ecution
s%le or )oreclosure s%le#.
1
'ay the b"yer act"ally ac!"ire ownership
oer the thing sold if the seller has no right
to sell$
Un'er Art. 16!6 t,e buyer 'oes not %c3uire
better title t,%n *,%t t,e seller ,%'. I) t,e seller
is neit,er t,e o*ner or 'oes not ,%+e %ut,ority
to sell0 t,e buyer %c3uires no better title t,%n
*,%t t,e seller ,%'. As %n e2ce-tion0 t,e buyer
c%n %c3uire better title t,%n *,%t t,e seller ,%'0
e+en i) t,e seller is not t,e o*ner or 'oes not
,%+e t,e ri$,t to sell0 *,en/
%. by esto--el in -%it - by t,e -rinci-le o)
esto--el % -erson *ill be -reclu'e' )rom
'enyin$ t,%t % -erson ,%s %ut,ority to sell by
t,e o*ners %cts or re-resent%tions. 7,is
esto--el is ot,er *ise 8no*n %s esto--el in
-%it (e3uit%ble 8in' o) esto--el#.
%. esto--el by 'ee' (tec,nic%l esto--el#-Art.
1545. W,en % -erson *,o is not t,e o*ner o)
% t,in$ sells or %lien%tes %n' 'eli+ers it0 %n'
l%ter t,e seller or $r%ntor %c3uires title
t,ereto0 suc, title -%sses by o-er%tion o) l%*
to t,e buyer or $r%ntee.
%. Esto--el by recor' (tec,nic%l esto--el#-
%. A s%le by %n %--%rent o*ner -
%. 1urc,%ses )rom % merc,%nt store
A and B are co<owners of a parcel of land. A
and B sold it to : erbally. : sold the land for
15+,+++ to =. #o"ld = be considered to hae
ac!"ired ownership oer the parcel of land$
Un'er Art. 1545 or ot,er*ise 8no*n %s esto--el
by 'ee' or tec,nic%l esto--el. W,en t,e seller
*,o *%s not t,e o*ner %t t,e time o) t,e s%le
%c3uire' o*ners,i-0 %utom%tic%lly o*ners,i-
-%sses to t,e buyer by o-er%tion o) l%*.
>o*e+er0 un'er Art. 1545 'oes not %--ly
bec%use t,e l%* re3uires t,e 'eli+ery o) t,e
-%rcel o) l%n' to I t,e buyer0 %n' un'er t,e
)%cts %rt. 1545 *oul' not %--ly bec%use 1. t,ere
*%s no s,o*in$ t,%t t,ere *%s 'eli+eryJ-%yment
%lre%'y 'ue to t,e +erb%l n%ture o) t,e s%le
,ence unen)orce%ble. >ence it coul' not be s%i'
t,%t by o-er%tion o) l%*0 F li8e*ise %c3uire'
o*ners,i- by esto--el by 'ee'.
%ale by the nephew of the owner of a parcel
of land. %ince the nephew co"ld not delier
the land to the b"yer, the b"yer filed a
complaint for estafa. 3n this criminal case, for
the acc"sed to be ac!"itted, he as)ed his
"ncle to testify that he act"ally had the
a"thority to sell. #hen the "ncle testified in
co"rt, the nephew was ac!"itted beca"se
after all, he had the a"thority to sell. After the
ac!"ittal of the nephew and the b"yer
demanded from the "ncle for the deliery,
the "ncle ref"sed for in reality he said that
he did not a"thori>ed his nephew. %o when a
ciil case was filed to compel the "ncle to
delier and transfer ownership oer the
thing, will that action prosper$
Fes0 bec%use t,e o*ner c%nnot be %llo*e' no*
t,%t ,is ne-,e* *%s not %ut,ori?e' *,en ,e
testi)ie' in court t,%t ,e $%+e suc, %ut,ority.
7,is is consi'ere' %s esto--el by recor' %n'
%lso consi'ere' tec,nic%l esto--el.
&isc"ss ?%ale by an apparent owner@$
As -ro+i'e' by )%ctors %ct0 recor'in$ l%*s0 %n'
ot,er l%*s *,ic, en%ble t,e %--%rent o*ner o)
$oo's to 'is-ose o) t,em %s i) ,e *ere t,e re%l
o*ner.
Ander the 7actors (an old name for agent)
Act, een if the agent has no right to sell a
specific thing a third person may act"ally
ac!"ire ownership beca"se he can only rely
on the power of attorney as written. 3f for
e,ample an agent thro"gh a special power of
attorney was gien the power to p"rchase a
car, howeer in the erbal instr"ction the
agent was a"thori>ed to sell that car only to
o n e o f t h e m e m b e r s o f a c e r t
a i n organi>ation. B"t the agent sold the car
to a person other than to a member of the
organi>ation as directed by the principal.
#o"ld that b"yer ac!"ire ownership een if
the agent has no right to sell to that b"yer$
Fes. Un'er Art 1"!! so )%r %s t,ir' -ersons %re
concerne'0 t,ey only ,%+e to rely on t,e S1A %s
*ritten e+en i) t,e seller %$ent *%s not
14
%ut,ori?e' %s instructe'0 t,e buyer %c3uire
o*ners,i- o+er t,e t,in$ sub.ect o) t,e s%le.
1he elder brother 'ig"el 'apalo donated
half of his land to his yo"nger brother
beca"se the latter was abo"t to get married.
3nstead of the yo"nger brother as)ed his
elder brother to sign a deed of donation, he
as)ed the latter to sign a deed of sale not
only half of the land b"t the entire parcel of
land. /e was therefore able to register the
property in his name. After 1+ years,
howeer, he sold this entire parcel of land to
the Barcisos. 4bio"sly, the yo"nger brother
is not a"thori>ed to sell with respect to the
other half, beca"se what was only gien is
only half of the land. B"t the Barcisos
claimed that they bo"ght the land on an
apparent owner beca"se the entire property
was registered in the ame of the seller. &id
the Barcisos ac!"ired ownership beca"se
they bo"ght the entire property from an
apparent owner$
Not necess%rily0 bec%use t,e seller must not
only be %n %--%rent o*ner but buyer must %lso
be % buyer in $oo' )%it,. 7,e buyers in t,is c%se
is not in $oo' )%it, bec%use be)ore t,ey bou$,t
t,e l%n'0 t,ey *ent )irst to t,e ,ouse o) (i$uel
(%$-%lo to in3uire on *,et,er ,e (youn$er
brot,er# *oul' %llo* ,is youn$er brot,er to sell
t,%t -%rcel o) l%n'. 7,ere)ore t,ey %re in b%'
)%it, bec%use t,ey 8ne* %n' bec%use (i$uel
%lso ,%' t,e ri$,t to t,e ,%l) -ortion o) t,e l%n'
*,en t,ey bou$,t t,e entire -%rcel o) l%n'.
7,ere)ore t,ey 'i' not %c3uire o*ners,i- o+er
t,e entire -%rcel o) l%n' ((%-%lo +s. (%-%lo#
1he owner of a parcel of land coered by a
1C1 or 4C1, mortgaged a parcel of land to
the creditor and deliered the 1C1 or 4C1.
1his mortgagee forged the signat"re of the
owner in a deed of sale. 1h"s, he was able to
register the property in his name with that
forged deed. 1hereafter, the mortgagee who
was a b"yer in the forged deed, sold that
land to a third person who had no )nowledge
of the transaction between the mortgagor A
and mortgagee B. &id the mortgagee
ac!"ired ownership$ &id the b"yer ac!"ired
the property oer the parcel of land$ #hen
can a b"yer said to be in good faith$
7,e mort$%$ee 'i' not %c3uire o*ners,i- by
+irtue o) % 'ee' o) s%le. A )or$e' 'ee' is % +oi'
instrument %n' c%nnot be t,e source o) % +%li'
title to t,e buyer. 7,is )or$e' 'ee' ,o*e+er0 c%n
be t,e root o) % +%li' title un'er t,e mirror
-rinci-le *,en t,e buyer bou$,t it )rom t,e
mort$%$ee in *,ose n%me it *%s re$istere'0
%n' relie' on t,e 7C70 t,en i) ,e %c3uire' t,e
-ro-erty in $oo' )%it,0 t,en ,e ,%' %c3uire'
o*ners,i- o+er t,e -%rcel o) l%n' un'er Art.
16!6 in rel%tion to 1D 16"0 *,en t,e buyer
bou$,t % -%rcel o) l%n' relyin$ on t,e 7C7 %lone
%n' buyin$ it in $oo' )%it, t,en ,e *ill ,%+e %
better ri$,t t,%n t,e o*ner.
;y t,e mere )%ct t,%t t,e buyer 'i' not 8no* t,e
e2ecution o) t,e time o) t,e 'ee' necess%rily
me%n ,e is %lre%'y % buyer in $oo' )%it,= Not
necess%rily bec%use t,e l%* re3uires t,%t ,e
,%' )ully -%i' *it,out 8no*le'$e o) 'e)ect in t,e
title o) t,e seller. >e m%y ,%+e %c3uire'
8no*le'$e %)ter t,e e2ecution o) t,e 'ee' o)
s%le but be)ore -%yment0 ,e c%n no lon$er be
consi'ere' % buyer in $oo' )%it,.
C1he owner of a parcel of land entr"sted the
secretary to ta)e hold of the 1C1 only for
safe)eeping. 1h"s the secretary forged the
signat"re of his boss in a deed of sale. 1h"s
he was able to register the property in his
name, and sold this parcel of land to a third
person, and s"ch person is considered to be
i n g o o d f a i t h , t h e n h e h a s a c
! " i r e d ownership oer the thing sold een
if the seller had nor right to sell. 1his is
beca"se the b"yer bo"ght it from an
apparent owner who disposed of the thing as
if it was really owned by him.
CAnder the Bew Ciil Code on negotiable
doc"ments of title, if goods are coered by a
negotiable doc"ment of title and there was a
n e g o t i a t i o n o f t h i s d o c " m e n t
a s a conse!"ence of a sale, if the b"yer
bo"ght the good in good faith and for al"e,
he will be protected "nder the law, and
ac!"ire ownership oer the goods een if the
seller do not hae the right to sell. 1he seller
may hae ac!"ired oer the doc"ment of title
thro"gh iolence, b"t if it is negotiable
doc"ment of title especially if it is a bearer
15
instr"ment, then the b"yer may ac!"ire
ownership oer the goods een if the seller
had no right to sell.
% " n b r o t h e r s w a s t h e o w n e r
o f t h e refrigerator (they are engaged in
the b"siness of selling refrigerators) and
sold it to Dope> in an installment basis.
As stip"lated %"n brothers resered
ownership oer the refrigerator "ntil f"ll
payment. 1he b"yer Dope> paid only E++ and
the remaining balance to be paid on a
monthly basis. /oweer, Dope> sold the
refrigerator to Felasco the ery ne,t day in
his store to Co Cang Chi". %"n brothers after
learning of the s a l e , fi l e d a n a c t i o n
t o r e c o e r t h e refrigerator. #o"ld the
action prosper$ &id Co Cang Chi" ac!"ired
ownership oer the refrigerator$ Can %"n
brothers recoer the refrigerator by
reimb"rsing the price paid by Co Cang Chi"$
As to Vel%sco0 t,e rule un'er Art. 16!6 is t,%t
t,e buyer c%nnot %c3uire better title t,%n *,%t
t,e seller ,%'.
As to Co C%n$ C,iu0 ,e %c3uire' o*ners,i-
o+er t,e re)ri$er%tor bec%use ,e bou$,t it in %
merc,%nt store. Un'er 16!6 l%st -%r%$r%-,0 i)
t,e o*ner bou$,t t,e t,in$ in $oo' )%it, )rom %
merc,%nt store ,e %c3uires o*ners,i- o+er t,e
t,in$. Note0 ,e must ,%+e no 8no*le'$e o) t,e
'e)ect in t,e title o) t,e $oo's.
As to t,e issue on *,et,er Sun ;rot,ers reco+er
t,e re)ri$er%tor )rom Co C%n$ C,i u by
reimbursin$ t,e -rice -%i'. 7,e SC ,el' t,%t
Sun brot,ers c%nnot. 7,is is bec%use un'er Art
16!60 t,e o*ners,i- o) t,e buyer *,o bou$,t
t,%t t,in$ in t,e merc,%nt store %n' in $oo' )%it,
%n' )or +%lue0 is %bsolute in c,%r%cter.
Art. 66" 'oes not %--ly to t,is scrn%rio bec%use
Sun ;ros. *%s not unl%*)ully 'e-ri+e' nor is t,e
t,in$ lost. I) t,e t,in$ *%s lost or t,e o*ner is
unl%*)ully 'e-ri+e'0 suc, o*ner c%n reco+er t,e
s%me e+en i) it *%s sol t,rou$, % -ublic s%le or
in % merc,%nt store but suc, o*ner must
reimburse t,e -erson *,o bou$,t in in $oo'
)%it, %n' )or +%lue. (Sun brot,ers %n' com-%ny
+s. Dose Vel%sco %n' Co C%n$ C,u#
Art. 559. The possession of movable property acquired in
good faith is equivalent to a title. Nevertheless, one who
has lost any movable or has been unlawfully deprived
thereof may recover it from the person in possession of the
same.
If the possessor of a movable lost or which the owner has
been unlawfully deprived, has acquired it in good faith at a
public sale, the owner cannot obtain its return without
reimbursing the price paid therefor. !"!a#
4ne painting owned by A was stolen from
her. Dater on she noticed that the painting
was in the room of B, and as)ed how he
ac!"ired the painting, he said that he
ac!"ired the same in a gallery a"ction. Can
the owner of the painting from whom the
painting was stolen recoer the same from
B$
A $%llery %uction is not % -ublic s%le. Since it is
not % -ublic s%le0 t,e o*ner c%n reco+er t,e
-ro-erty e+en *it,out reimbursement.
I) it is % -ublic s%le0 t,e o*ner c%n reco+er t,e
-%intin$ -ro+i'e' t,e o*ner reimburses t,e
buyer o) t,e -rice -%i' in t,%t s%le.
A diamond ring was robbed in a b"s, and
this same diamond ring has become the
ob-ect of a p"blic sale of a pawnshop. Can
the owner recoer the ring from the b"yer in
the p"blic sale initiated by the pawnshop$
Fes0 i) t,e buyer is in $oo' )%it,0 %n' so lon$ t,e
o*ner is *illin$ to reimburse t,e buyer o) t,e
-rice -%i' in t,%t s%le0 ,e m%y reco+er t,e
s%me.
Can the owner recoer a thing from the
b"yer who bo"ght in a merchant store$
No. 7,e o*ner c%nnot reco+er t,e t,in$ )rom t,e
buyer e+en i) t,e s%me *%s lost or t,e o*ner
*%s unl%*)ully 'e-ri+e' t,ereo)0 %n' e+en i) t,e
o*ner *is,es to reimburse t,e buyer )or t,e
-rice -%i'. As % m%tter o) ri$,t0 t,e buyer in
$oo' )%it, %c3uires %bsolute title o+er t,e t,in$.
/ow is transfer of ownership oer a thing
effected$
It is e))ecte' by 'eli+ery0 %ctu%l or constructi+e.
16
2erytime there is deliery, the b"yer
ac!"ires ownership "pon deliery$
Not necess%rily. 7,is is not %n %bsolute t,%t
u-on 'eli+ery %s % conse3uence o) s%le0 t,ere is
tr%ns)er o) o*ners,i-. 7,ere %re 8in's o) s%le
t,%t 'es-ite 'eli+ery0 t,e buyer 'oes not %c3uire
o*ners,i-. E2%m-les o) *,ic, %re/
%. Con'ition%l s%le - >ere o*ners,i- is reser+e'
by t,e seller0 suc, t,%t 'es-ite 'eli+ery
o*ners,i- 'oes not -%ss to t,e buyer. 7,e
buyer 'oes not %c3uire o*ners,i- u-on
'eli+ery but r%t,er u-on t,e ,%--enin$ o) t,e
con'ition (usu%lly u-on )ull -%yment o) t,e
-rice#.
%. A s%le on 7ri%l0 s%le on s%tis)%ction or s%le on
%--ro+%l - U-on 'eli+ery0 e+en i) t,ere is no
%ctu%l 'eli+ery0 t,ere is no tr%ns)er o)
o*ners,i- %t t,e time o) 'eli+ery. 7,e buyer
*ill %c3uire o*ners,i- o+er t,e t,in$ sol'
*,en t,e buyer si$ni)ies ,is %cce-t%nce or
%--ro+%l o+er t,e t,in$ sol'. E+en I) ,e 'oes
not si$ni)y ,is %--ro+%l o*ners,i- m%y still
-%ss to ,im i)/ 1# t,ere is % -erio' %$ree'
u-on by t,e -%rties *it, *,ic, to 'eci'e %n'
u-on l%-se o) t,e -erio' ,e ,%' im-lie'ly
%cce-te' or # e+en be)ore t,e l%-se o) %
-erio'0 ,e m%y be consi'ere' %s to ,%+e
im-lie'ly %cce-te' i) ,e 'i' %n %ct *,erein ,e
*oul' be consi'ere' to ,%+e %'o-te' t,e
t r % n s % c t i o n t , e n o * n e r s , i - *
o u l ' b e consi'ere' to ,%+e -%ss on t,e
buyer (e.$. e+en i) ,e ,%s 1! '%ys *it,in
*,ic, to 'eci'e0 %)ter t*o '%ys ,o*e+er )rom
'eli+ery0 ,e sol' t,e c%r to %not,er# 4# t,ere
m%y be no -erio' t,e buyer is 'eeme' to
,%+e %cce-te' %)ter t,e l%-se o) %
re%son%ble time. W,%t is r e % s o n % b l e
t i m e * i l l ' e - e n ' o n t , e
circumst%nces surroun'in$ t,e s%le0 t,e
-ur-ose o) t,e s%le0 or t,e n%ture o) t,e t,in$
sol'.
3n %ale or (et"rn, ownership passes to the
b"yer "pon deliery$
In t,is 8in' o) s%le o*ners,i- -%sses to t,e
buyer u-on 'eli+ery. >o*e+er in t,is 8in' o)
s%le0 t,e buyer is $i+en t,e ri$,t to reimburse
t,e title b%c8 to t,e seller.
A c%r *%s sol' %t 16!0!!!0 <60!!! *%s -%i' %t
t,e e2ecution o) t,e 'ee' o) s%le0 t,e b%l%nce
-%y%ble on % mont,ly b%sis. 7,e c%r *%s
'eli+ere' to t,e buyer. >o*e+er0 be)ore ,e coul'
-%y t,e b%l%nce0 t,e c%r *%s 'estroye'0 c%n t,e
buyer still be com-elle' to -%y t,e b%l%nce=
>e c%n still be com-elle' to -%y t,e b%l%nce.
7,is is bec%use u-on 'eli+ery o) t,e c%r to t,e
buyer0 t,ere bein$ no retention or reser+%tion o)
o*ners,i- by t,e seller0 o*ners,i- -%sses to t,e
buyer. Un'er Art 16!50 res -erit 'omino rule0 t,e
o*ner be%rs t,e loss.
3n sale on approal, who bears the loss$
7,e seller %n' not t,e buyer e+en i) t,ere is no
'eli+ery0 bec%use t,e o*ner is still t,e seller.
Un'er t,e res -erit 'omino rule0 t,e o*ner be%rs
t,e loss.
A set of A'GA( was sold to 1abora on
installment basis. 4n the day these boo)s
were deliered to the office of Atty. 1abora,
the entire bloc) where the office of the latter
is located was b"rned together with the
A'GA(. Atty 1abora ref"sed to pay the
balance despite demand by lawyer8s co.
Dawyer8s co therefore filed a case. 1wo
defenses were raised 1) res perit domino r"le
beca"se there is a stip"lation in the contract
that the seller shall retain ownership oer the
boo)s "ntil f"ll payment, and if lawyers co
was the owner then it sho"ld bear the loss.
3s the arg"ment correct$
No. I) t,ere *%s % sti-ul%tion in t,e contr%ct t,%t
o*ners,i- s,%ll be ret%ine' by l%*yers co until
)ull -%yment *%s m%'e0 t,ere *%s %lso %
sti-ul%tion t,%t t,e ris8 o) loss s,%ll -ert%in to
t,e buyer %t t,e time t,e boo8s *ere 'eli+ere'
*,%te+er t,e c%use o) t,e loss. 7,is is %n
e2ce-tion to t,e res -erit 'omino rule.
Ass"ming there was no stip"lation that the
ris) of loss shall pertain to the b"yer "pon
deliery, may the b"yer still be held to
answer for the loss$
Un'er Art. 16!50 *,en t,e o*ner reser+e' t,e
title to t,e -ro-erty only to secure t,e -%yment
19
o) t,e -rice o) t,e buyer0 t,en by l%*0 ris8 o) loss
s,%ll only -ert%in to t,e buyer. 7,is is 8no*n %s
% security title. 7,ere)ore0 e+en i) t,e buyer 'i'
not %c3uire title u-on 'eli+ery0 ,e be%rs t,e loss.
#heneer there is delay in the deliery of the
thing sold, who bears the loss$
It 'e-en's *,o m%y be %t )%ult )or t,e 'el%y in
t,e 'eli+ery. It m%y be t,e seller or t,e buyer.
3f for e,ample, there is a stip"lation that the
b"yer m"st retriee the goods on the
wareho"se of the seller on a specific date.
4n that date agreed "pon, the seller
demanded the b"yer to get the goods at the
wareho"se. &espite s"ch, the b"yer failed to
o b t a i n t h e g o o d s . 1 h e n e , t d
a y, t h e wareho"se was b"rned. #ho then
shall bear the loss$
>ere t,e seller *%s still t,e o*ner0 ,o*e+er0 t,e
buyer *%s %lre%'y in 'el%y in retrie+in$ t,e
$oo's0 ,ence0 un'er Art. 16!50 t,e buyer be%rs
t,e loss0 %s %n e2ce-tion to t,e res -erit 'omino
rule.
3f the seller is the one at fa"lt, who bears the
loss$
7,e -remise ,ere0 t,e o*ners,i- s,oul' ,%+e
been -%sse' to t,e buyer but t,e $oo's %re still
*it, t,e seller (t,is coul' ,%--en by constructi+e
'eli+ery but -,ysic%l -ossession is still *it, t,e
seller#0 e+en so0 t,e seller s,%ll be%r t,e loss
bec%use ,e *%s t,e one %t )%ult )or t,e 'el%y in
t,e 'eli+ery o) t,e t,in$ sol' 'es-ite 'em%n' by
t,e buyer.
An owner of a registered land sold the land
to B. B did not register the sale. A few days
thereafter, A sold again the same parcel of
land to C, who this time registered the sale.
#ho between B and C hae a better right to
this parcel of land$
It 'e-en's on *,et,er or not C re$ister t,e s%le
in $oo' )%it,.
Note/ In Art. 1655 -ert%inin$ to 'ouble s%les0 %s
to *,ic, rule to %--ly *oul' 'e-en' on t,e
n%ture o) t,e t,in$ sol' *,et,er it is immo+%ble
or % % mo+%ble. I) it is % s%le o) % mo+%ble.
I) t,e t,in$ sol' is % mo+%ble0 t,e )irst -erson
*,o too8 -ossession o+er t,e t,in$ s,%ll ,%+e %
better ri$,t.
I) t,e t,in$ sol' is %n immo+%ble0 t,e buyer *,o
)irst re$ister in $oo' )%it, *ill ,%+e t,e better
ri$,t0 i) t,ere *%s no re$istr%tion0 t,en t,e
-erson *,o )irst too8 -ossession0 i) no one is in
-ossession t,en it *ill be t,e buyer *it, t,e
ol'est title in $oo' )%it,. Koo' )%it, ,ere 'oes
not -ert%in to 8no*le'$e o) % 'e)ect o) title o)
t,e secon' buyer since ,e is t,e )irst buyer0
$oo' )%it, ,ere me%ns ,e ,%s no 8no*le'$e o)
t,e 'e)ect on t,e title o) t,e seller.
3f a thing is sold to two or more persons,
what will be the effect of9 1) the first b"yer
was the first to register with )nowledge of
the second saleH *) the second b"yer was the
first to register with )nowledge of the first
sale. #ho will hae a better right in these to
scenarios$
1. In t,e )irst scen%rio0 ,is 8no*le'$e o) t,e
secon' s%le 'oes not m%8e ,im % re$istr%nt in
b%' )%it,. Bno*le'$e s,oul' -ert%in to one
*,ic, is -rior s%le in or'er to m%8e one %
re$istr%nt in b%' )%it,. >ence0 ,ere ,e ,%s %
better ri$,t.
. As to t,e secon' scen%rio0 ,e is consi'ere' %
re$istr%nt in b%' )%it, bec%use o) ,is -rior
8no*le'$e o) % )ormer s%le. >ence0 ,e *ill
not ,%+e % better ri$,t.
3f a person bo"ght the thing witho"t
)nowledge of the prior sale and registered
the same, wo"ld that mean he is a registrant
in good faith$
Not necess%rily. 7,is is bec%use ,e m%y ,%+e
%c3uire' 8no*le'$e -rior to t,e re$istr%tion. but
%)ter buyin$. W,%t is re3uire' by l%* is not %
buyer in $oo' )%it,0 but % re$istr%nt in $oo' )%it,.
;%utist% +s. Sioson
1he owner sold a registered parcel of land to
B who did not register, neither did he too)
physical possession. After the sale they
e,ec"ted a lease agreement in which the
1<
b"yer is now the lessor and that the seller
became the lessee. /ence, the seller
contin"ed to be in possession of the land
not as a concept of an owner b"t of a lessee.
After the sale and the contract of lease, A
sold this parcel of land to C, who also did
not register the same, and this time C too)
physical possession. #ho between B and C
had a better right$
; *oul' ,%+e % better ri$,t bec%use *,en ;
e2ecute' % le%se contr%ct *it, A0 ; is in
contem-l%tion o) l%* in -ossession o) t,e
-ro-erty0 *,ic, is le$%l -ossession0 ,e ob+iously
is t,ere)ore % -ossessor in $oo' )%it,0 t,e )irst
*,o too8 -ossession in $oo' )%it,. 7,ou$, C
,%' -,ysic%l -ossession o+er t,e -ro-erty0 ,e is
consi'ere' to be t,e one secon' in -ossession.
; t,ere)ore *%s consi'ere' to ,%+e % better
ri$,t.
Note/ Le$%l -ossession is su))icient to 'etermine
%s to *,o ,%+e % better ri$,t bet*een t*o
-ersons.
C%rumb% +s. CA
%ale of a parcel of land to B who too)
possession of the land. /oweer, this seller
a -"dgment debtor to one of his creditor.
Beca"se of a -"dgment in faor of a creditor
C, the parcel of land had become the s"b-ect
of an e,ec"tion sale. 1hen the b"yer became
C who registered the sale. #ho will hae a
better right between B and C and C had no
)nowledge of the first sale$
; *oul' ,%+e % better ri$,t bec%use t,is -%rcel
o) l%n' *%s re$istere' un'er t,e 7orrens
System. Art.1655 'oes not %--ly to unre$istere'
l%n's. Only t,ose l%n's *,ic, %re re$istere'
un'er t,e 7orrens System c%n be co+ere' by
t,e -ro+isions o) Art. 1655.
It coul' be notice' t,%t C ,%' re$istere' t,e
l%n'0 but t,e s%me is not co+ere' un'er t,e
torrens system bec%use0 t,ere is %not,er
system o) re$istr%tion o) unre$istere' l%n's.
7,ere is % 'i))erent boo8 co+ere' by t,is 8in' o)
re$istr%tion0 ,ence0 Art 1655 *oul' not %--ly.
7,ere)ore0 i) ARt. 1655 *oul' not %--ly0 ; *oul'
,%+e % better ri$,t bec%use t,ere *%s %ctu%l
'eli+ery to ,im. 7,er)ore0 un'er t,e $ener%l rule0
u-on 'eli+ery0 o*ners,i- -%sses to t,e buyer.
W,en o*ners,i- ,%' -%sse' to t,e buyer *,en
t,e -ro-erty *%s sol' in t,e e2ecution s%le0 t,e
buyer *oul' not $et %nyt,in$ )rom t,e e2ecution
s%le bec%use ,e merely ste-s into t,e s,oes o)
t,e .u'$ment 'ebtor. Since t,e .u'$ment 'ebtor
,%' no o*ners,i- o+er t,e l%n' %t t,e time o)
s%le0 t,e ,e 'i' not %c3uire o*ners,i- by +irtue
o) t,%t s%le.
Note/ 7o 'etermine t,%t t,e l%n' is un'er t,e
torrens system0 t,e o*ners,i- is -ro+en by
7C7Hs or OC7Hs0 ot,er*ise i) -roo) o) o*ners,i-
%re mere t%2 'ecl%r%tions0 it *ill not be
consi'ere' %s re$istere' l%n'.
Obli$%tion to 'eli+er to ob.ect o) t,e s%le
In t,is obli$%tion one must 'istin$uis, )irst t,e
sub.ect m%tter o) t,e s%le *,et,er it is % t,in$ or
% ri$,t.
4wnership passes "pon meeting of the
minds as a conse!"ence of sale$
:%lse0 t,ere must be 'eli+ery.
As to deliery of things as a conse!"ence of
sale )nown as tradition, there are two modes
recogni>ed by law, what are these$
1. Actu%l - (%teri%l 'eli+ery or re%l 'eli+ery
7o ,%+e % +%li' %ctu%l 'eli+ery t,e t,in$
must be sub.ect to -ossessio n %n'
control o) t,e +en'ee.
I) t,e t,in$ sol' *%s 'eli+ere' to % t,ir'
-erson0 t,ere m%y stil l be %ctu%l
' e l i + e r y * , e n s u c , t , i r ' - e r s o
n , % s %ut,ority to recei+e )rom t,e +en'ee.
As suc,
,e becomes %n %$ent o) t,e +en'ee0
t,us0 t,ere is %ctu%l 'eli+ery.
. Constructi+e 'eli+ery
%. ;y t,e e2ecution o) % -ublic instrument (i) t,e
contr%ry intention 'oes not %--e%r on t,e
'ocument# by t,e mere e2ecution o) t,e
1E
-ublic instrument0 t,%t is %lre%'y e3ui+%lent to
'eli+ery. >ence0 o*ners,i- -%sses to t,e
buyer.
%. Deli+ery o) Beys (7r%'icion Symbolic%#
%. ;y mere consent or %$reement o) t,e -%rties
-ro+i'e' %t t,e time o) t,e s%leC -ossession o)
t,e $oo's c%nnot be tr%ns)erre' to t,e buyer
(e.$. *,en t,e t,in$ *%s t,e sub.ect m%tter o)
t,e le%se0 bec%use be)ore e2-ir%tion o) t,e
le%se t,e t,in$ c%nnot be tr%ns)erre' to t,e
buyer#.
%. 7r%'icion ;re+i (%nu - >ere0 t,e buyer *%s
%lre%'y in -ossession t,e -ro-erty0 but t,ere
is % c,%n$e %s to t,e st%tus o) -ossession
suc, %s t,%t o) % lessee0 'e-osit%ry or %$ent
to -ossession in t,e conce-t o) %n o*ner.
%. 7r%'icion Constitutum 1ossesorium - >ere
t,e seller *oul' still continue to be in
-ossession o) t,e t,in$ %)ter t,e s%le but no
lon$er in t,e conce-t o) %n o*ner but in
%not,er c%-%city.
1he original owner here, : I = whose
properties are fi,t"res in a salon, while J I
& was a -"dgment creditor of : I =. Beca"se
of -"dgment rendered by a co"rt in faor of
J, the sheriff leied "pon the properties of :
and = which was still in the latter8s physical
p o s s e s s i o n . 1 h i s e , e c " t i o n s
a l e w a s !"estioned by A I B on the
premise that these goods were already sold
to them prior to the ley. /ence, if these
goods were sold to them prior to the ley,
ownership already passed to A I B, and
as s"ch there is nothing more to be
leied "pon. B"t the d e b t o r w a s e r
y m " c h i n p h y s i c a l possession.
'ay A I B be considered as owners of
the land despite them not being in act"al
physical possession of the good sold, and
ma)e them to hae a better right oer the
-"dgment creditors oer an e,ec"tion sale$
E+en i) t,ere *%s no -,ysic%l -ossession %n'
t,ere *%s no %ctu%l 'eli+ery0 t,ere m%y be %
constructi+e 'eli+ery by t,e e2ecution o) % -ublic
instrument. Un)ortun%tely in t,is c%se0 t,e 'ee'
o) s%le *%s merely in % -ri+%te instrument.
In or'er )or t,e o*ners,i- to -%ss0 it ,%' to be in
% -ublic instrument (constructi+e 'eli+ery#.
3f for e,ample the seller and the b"yer
p"rs"ant to their agreement deliered the
goods to a common carrier, "pon deliery of
the goods to a common carrier, wo"ld that
res"lt in transfer of ownership immediately$
I) 'eli+ery to t,e common c%rrier is 'eli+ery to
t,e buyer0 t,en o*ners,i- -%sses to t,e buyer
u-on 'eli+ery to t,e common c%rrier. Suc, is %
$ener%l rule0 t,e e2ce-tions %re/
1. i) t,ere *%s sti-ul%tion t,%t o*ners,i- *ill not
-%ss to t,e buyer until )ull -%yment.
. E+en i) t,e 'ee' o) s%le 'oes not -ro+i'e )or
suc, sti-ul%tion0 t,e seller m%y ,%+e obt%ine'
% bill o) l%'in$ *,ic, -ro+i'es t,%t t,e $oo's
%re 'eli+er%ble to t,e seller ,imsel) or ,is
%$ent. 7,us 'es-ite 'eli+ery o) t,e $oo's to
t,e s,i-0 t,ere is no tr%ns)er o) o*ners,i-
bec%use it *oul' still be t,e seller *,o *oul'
,%+e t,e ri$,t to obt%in t,e $oo's )rom t,e
common c%rrier.
Bin' s o ) Deli+er y o ) Incor-ore% l -ro-ertie s
(Lu%si 7 r%'icion#
#hat are the three modes of delieries as to
rights$
1. E2ecution o) % -ublic instrumentC ()rom t,e
'eli+ery o) certi)ic%tes0 o*ners,i- -%sses#
. Use by t,e +en'ee o) ,is ri$,ts *it, t,e
+en'ors consent (e.$. in s%les o) s,%res o)
stoc80 t,e +en'ee m%y not %l*%ys necess%rily
,%+e t,e ri$,t to e2ercise t,e stoc8,ol'ers
ri$,ts o+er t,e s,%re0 t,e buyer c%n only
e2ercise suc, ri$,t *it, t,e consent o) t,e
+en'or#.
3n a sale of 1+++ pairs of shoes, as agreed
"pon by the parties. 1he seller deliered
1*++ pairs of shoes instead of only 1+++.
'ay the b"yer ref"sed to accept eerything$
1"
Un'er t,e l%*0 ,e *oul' only ,%+e t,e ri$,t to
re.ect t,e e2cess0 but ,e c%n be com-elle' to
%cce-t t,e 1!!!.
Ass"ming if what was agreed "pon was
1+++, and the seller deliered only 8++, can
b"yer be compelled to receie the 8++$
No0 bec%use un'er t,e l%*0 -%rti%l -er)orm%nce
is non -er)orm%nce. As % rule0 % cre'itor c%nnot
%cce-t -%rti%l -er)orm%nce o) t,e obli$%tion0
e2ce-t *,en t,ere is % sti-ul%tion t,%t -%rti%l
'eli+eries is %llo*e'0 or *,en t,e obli$%tion
-ert%ins to one *,ic, is -%rtly li3ui'%te' %n'
-%rtly unli3ui'%te'0 obli$%tion to 'i))erent term
%n' con'itions.
1he b"yer accepted only 8++ at 1+++ per pair
of shoes, it so happened the seller can no
longer delier the balance of *++, since what
was preio"sly stip"lated was 1+++ pair of
s h o e s . / o w m " c h c a n t h e b " y
e r b e compelled to pay$
It 'e-en's on *,et,er t,e buyer *%s %*%re t,%t
t,e seller coul' no lon$er t,e b%l%nce or *,en
,e %cce-te' ,e *%s not %*%re t,%t t,e seller
coul' no lon$er 'eli+er t,e b%l%nce.
I) ,e *%s %*%re t,%t t,e seller c%n no lon$er
'eli+er t,e b%l%nce0 t,en ,e c%n be com-elle' to
-%y %t t,e contr%ct r%te. In t,is c%se0 E!!0!!!.
I) ,e ,%' no 8no*le'$e or %*%reness t,%t t,e
seller c%n no lon$er 'eli+er t,e b%l%nce *,en ,e
%cce-te'0 t,en un'er t,e l%* t,e buyer c%n only
be com-elle' to -%y t,e )%ir +%lue o) t,is t,in$.
An obligation to delier 1+++ caans of a
specific rice (milagrosa). /oweer, the seller
deliered 1*++ caans of both milagrosa and
combodian rice. 'ay the b"yer hae the right
to re-ect eerything$
Fes ,e *oul' ,%+e t,e ri$,t to re.ect e+eryt,in$
i) t,e $oo's %re 'eeme' in'i+isible. (e%nin$ in
e%c, s%c8 o) rice0 c%mbo'i%n rice %n' mil%$ros%
rice %re mi2e'.
>o*e+er0 i) in e%c, s%c8 it is cle%r )rom e%c,
t,%t it is mil%$ros% or comb%'i%n t,en0 t,%t
*oul' not be consi'ere' %s in'i+isible0 %n' ,e
c%n only be com-elle' t,e -%rt *,ic, is
mil%$ros%0 %n' re.ect t,e combo'i%n rice.
%ale of a parcel of land and the price agreed
"pon is 1 million at 1++ s!. m., the act"al
area deliered was only K5 s!"are meters,
what are the remedies of the b"yer$
1. S-eci)ic -er)orm%nce i) it is -ossible )or t,e
seller to 'eli+er t,e b%l%nce suc, *,en t,e
%'.%cent l%n' is still o*ne' by t,e sellerC or
. -ro-ortion%l re'uction o) t,e -rice is *it, %
s-eci)ic %mount $i+en to % s-eci)ic me%sure.
I) t,e s%le is % lum- sum s%le0 t,en %ny
'e)iciency in t,e %re%0 t,ere is no ri$,t to
-ro-ortion%l re'uction o) t,e -rice. :urt,er0
e+en i) t,ere is %n incre%se in t,e %re%
'eli+ere'0 t,ere *ill %lso be no %''ition%l
incre%se in t,e -rice.
4. Rescission - As % rule it *ill not be % reme'y
b%se on t,e )%cts. ;ec%use rescission *ill
only be % reme'y i) t,e %re% l%c8in$ is more
t,%n 1!G o) t,e %re% %$ree' u-on. ;ut e+en
i) t,e %re% l%c8in$ is not more t,%n 1!G0
rescission *ill be % reme'y i) t,e buyer c%n
-ro+e t,%t ,e *oul' not ,%+e bou$,t t,e l%n'
,%' ,e 8no*n t,%t it *%s less t,%n 1!! s3. m.
Note/ Rescission %n' -ro-ortion%l re'uction i)
t,e -ro-erty 'eli+ere' is o) in)erior 3u%lity. I) by
%$reement t,e -%rties inten' to sell % rice )iel'0
but it turne' out t,%t !G o) t,e l%n' is not
%ctu%lly % rice )iel' %n' c%nnot be -l%nte' by
-%l%y. 7,e reme'y o) t,e buyer is to m%8e %
-ro-ortion%l re'uction o) t,e -rice i) ,e still
*oul' *%nt t,e l%n' or rescission *oul' be %
reme'y i) t,e %re% *,ic, is in)erior is more t,%n
1!G o) t,e tot%l %re% o) t,e l%n'.
1l%ce o) Deli+ery
Kener%lly0 o*ners,i- -%sses %t t,e -l%ce o) 'eli+ery.
W,ere s,oul' t,e t,in$ or $oo's be 'eli+ere'=
1he seller deliered the goods to the place of b"siness
of the b"yer and the b"yer ref"sed to accept the
goods. 7rom that moment does it mean that the b"yer
is already in delay beca"se he ref"sed to accept the
goods$
It 'e-en's on *,et,er t,ere is % sti-ul%tion %s to t,e -l%ce
o) 'eli+ery or not. I) t,ere *%s suc, % sti-ul%tion0 %n' t,e
!
-l%ce %$ree' u-on *%s not t,e -l%ce o) business o) t,e
buyer0 o) course ,e *oul' ,%+e t,e ri$,t to re)use' to
%cce-t t,e 'eli+ery o) t,e $oo's in ,is -l%ce o) business.
In ot,er *or's0 *it, res-ect to t,e -l%ce o) 'eli+ery t,e )irst
t,in$ t,%t s,oul' be consi'ere' is t,e/
1. sti-ul%tion
. -l%ce )i2e' by us%$e or tr%'e
4. -l%ce o) business o) t,e seller
5. sellerHs -l%ce o) resi'ence
6. I) t,e t,in$ is not in t,e -l%ce o) business seller nor
buyer0 8no*n bot, to t,e -%rties0 but in some ot,er
-l%ce. 7,e -l%ce o) 'eli+ery s,%ll be *,ere t,e t,in$ is
loc%te' %t t,e time o) -er)ection o) t,e contr%ct.
1l%ces )i2e' by us%$e or tr%'e
I) t,ere is no sti-ul%tion %s to t,e -l%ce o) 'eli+ery0 t,e l%*
-ro+i'es t,%t0 it *ill be t,e -l%ce )i2e' by t,e us%$e or
tr%'e.
S,i--in$ Arr%n$ementsC -l%ce o) 'eli+ery
1. :.O.;. (:ree On ;o%r'# Arr%n$ement (1oint o)
Destin%tion#
I) t,ere is no -l%ce sti-ul%te' %s to t,e -l%ce o) 'eli+ery %n'
t,e $oo's %re to be s,i--e' on %n :O; b%sis0 t,e -l%ce o)
'eli+ery s,%ll be t,e -l%ce o*ners,i- is 'eeme' to -%ss. In
%n :O; %rr%n$ement0 t,e -%rties s,oul' ,%+e %$ree' to %
s-eci)ic -ort *,et,er it is t,e -ort o) ori$in or it coul' be t,e
-ort o) 'estin%tion.
In %n :O; -ort o) ori$in0 t,e -l%ce o) 'eli+ery s,%ll be
consi'ere' to be t,e -ort o) ori$in. It *oul' be t,e -ort o)
ori$in bec%use :O; me%n :ree On ;o%r'0 %n' :ree On
;o%r' me%ns t,%t t,e moment t,e $oo's %rri+e' %t t,e -ort
o) ori$in0 t,e seller *ill be )ree )rom %ny e2-ense on
tr%ns-ort%tion o) t,e $oo's to t,e buyer. :rom t,e -ort o)
ori$in0 it *ill be t,e buyer *,o *ill s,oul'er t,e e2-enses
)or t,e tr%ns-ort%tion. It *oul' %--e%r since t,e buyer *,o
s,oul'er t,e e2-enses0 it is t,e buyer *,o is t,e o*ner o)
t,e $oo's %s it re%c,e' t,e -ort o) ori$in. I) ,e is %lre%'y
t,e o*ner un'er t,is :O; %rr%n$ement t,ere)ore0 t,e -l%ce
o) 'eli+ery s,%ll be t,e -ort o) (%nil%.
In :O; -ort o) 'estin%tion %rr%n$ement0 t,e seller *oul'
,%+e to s,oul'er t,e e2-enses )or t,e tr%ns-ort%tion o) t,e
$oo's0 u-to %n' until t,e %rri+%l o) t,e $oo's %t t,e -ort o)
'estin%tion. >ence0 'eli+ery -%sses %t t,e -ort o)
'estin%tion.
. C.I.:. (costs0 insur%nce0)rei$,t# Arr%n$ement (1oint o)
Ori$in#
In % CI: %rr%n$ement0 t,e -l%ce o) 'eli+ery is consi'ere' to
be t,e -ort o) ori$in bec%use0 t,e -rice -%i' by t,e buyer
*oul' %lre%'y inclu'e t,e costs0 insur%nce0 %n' )rei$,t.
7,e buyer -%ys )or t,e )rei$,t0 it %--e%rs t,ere)ore t,%t
o*ners,i- -%sses %t t,e -ort o) ori$in0 ,ence0 'eli+ery is
m%'e %t t,e -ort o) ori$in.
3s it possible in a C37 arrangement or in an 74B
arrangement, the place of deliery shall be the port of
destination$
7,ese 'eli+ery %rr%n$ements only m%8e rules o)
-resum-tion. It must $i+e *%y to t,e re%l intention o) t,e
-%rties %s to t,e -l%ce o) 'eli+ery0 *it,out e2-ressly
sti-ul%tin$ %s to t,e -l%ce o) 'eli+ery. 7,e intention o) t,e
-%rties %s to t,e -l%ce o) 'eli+ery s,%ll be 'etermine' by
t,e -l%ce %n' m%nner o) t,e -%yment o) t,e -rice. W,ere
t,e -rice is -%i'0 t,%t is 'etermin%ti+e o) t,e -l%ce o)
'eli+ery.
Un'er Art. 16E0 %s to t,e -l%ce o) -%yment0 i) t,ere is no
-l%ce %$ree' u-on *,ere -%yment s,oul' be m%'e0 t,e
-l%ce o) -%yment s,oul' be m%'e to t,e -l%ce o) 'eli+ery.
In one c%se0 it *%s sti-ul%te' in t,e contr%ct t,%t t,e seller
c%n 'em%n' t,e -%yment o) t,e -rice0 u-on t,e %rri+%l o)
t,e $oo's %t t,e -ort o) 'estin%tion in % CI: %rr%n$ement.
7,e SC rule' t,%t t,e -l%ce o) 'eli+ery is t,e -ort o)
'estin%tion bec%use it is only %t t,%t -ort t,%t t,e seller c%n
'em%n' on t,e -%yment o) t,e -rice. 7,ey ,%+e %$ree' on
% CI: %rr%n$ement (-ort o) 'estin%tion# )or t,e -ur-ose o)
)i2in$ o) t,e -rice0 bec%use $ener%lly0 CI: me%ns -ort o)
ori$in0 ,o*e+er out o) t,e -rice0 it *ill be t,e -ort o)
'estin%tion0 %n' -%yment s,%ll inclu'e t,e cost0 t,e
insur%nce %n' t,e )rei$,t. 7,e -l%ce o) 'eli+ery bein$ t,e
-ort o) 'estin%tion0 o*ners,i- -%sses in t,e -ort o)
'estin%tion. E))ecti+ely t,e )rei$,t s,%ll be s,oul'ere' by
t,e buyer0 but t,%t %mount *ill be t%8en to t,e -rice )i2e'
by t,e seller.
In %not,er c%se0 t,e -%rties %$ree' in %n :O;
%rr%n$ement0 but it *%s sti-ul%te' in t,e contr%ct t,%t t,e
seller c%n 'em%n' t,e -%yment o) t,e -rice by -resentin$
t,e bill o) l%'in$ to t,e buyer. 7,e bill o) l%'in$ c%n be
-resente' %t t,e -ort o) ori$in to t,e buyer bec%use % bill o)
l%'in$ c%n be t%8en )rom t,e common c%rrier %t t,e -ort o)
ori$in. Des-ite o) %n :O; %rr%n$e0 t,e -l%ce o) 'eli+ery is
t,e -ort o) ori$in. :O; -ort o) 'estin%tion is %rr%n$e' in t,is
c%se bec%use t,e buyer *oul' *%nt to ,%+e t,e seller to
s,oul'er %ll t,e e2-enses )or t,e tr%ns-ort%tion o) t,e
$oo's u- to t,e -ort o) 'estin%tion.
Obli$%tions o) t,e SellerC W %rr%nty
&oes 6hilippine law adopt the common law principle of
caeat emptor (b"yer beware)$
As % rule0 1,ili--ine L%* 'oes not %'o-t t,e common l%*
-rinci-le o) buyer be*%re bec%use o) t,e im-lie'
*%rr%nties. E+en in t,e %bsence o) sti-ul%tion0 t,is
*%rr%nties %re 'eeme' %tt%c,e' to t,e contr%ct0 %n' t,e
buyer m%y ,ol' t,e seller li%ble )or bre%c, o) *%rr%nty.
>o*e+er0 it is only % $ener%l rule. 7,ere %re inst%nces
*,ere t,ere c%n be no im-lie' *%rr%nty. E2%m-les0 *,ere
t,ere is no im-lie' *%rr%nties %re/
1
1. In s%le o) %nim%ls in )%ir (no *%rr%nty %$%inst ,i''en
'e)ects# (but *it, *%rr%nty %$%inst e+iction or title#
. -ublic %uctions (no *%rr%nty %$%inst ,i''en 'e)ects# (but
*it, *%rr%nty %$%inst e+iction or title#
4. %s is *,ere is s%les (no *%rr%nty %s to t,e )itness o) t,e
t,in$0 but t,ere is still *%rr%nty %$%inst e+iction#
5. s%le o) secon' ,%n' items
#hen wo"ld and affirmation of fact or promise of a
endor be the basis in holding the seller liable for
breach of an e,press warranty$
7,e l%* re3uires t,%t %n %))irm%tion o) )%ct or -romise o)
t,e seller must rel%te to t,e t,in$ itsel). In ot,er *or's0 it
must rel%te to t,e c,%r%cter o) t,e t,in$0 or to t,e 3u%lity o)
t,e t,in$0 or its title.
Secon'ly0 it is re3uire' t,%t suc, %))irm%tion o) )%ct must
,%+e t,e n%tur%l ten'ency to in'uce % -erson to -urc,%se
t,e t,in$C
7,ir'ly0 t,e buyer -urc,%se t,e t,in$ relyin$ on t,e
%))irm%tion o) )%ct or -romise m%'e by t,e seller.
3f the seller told the b"yer that this is the best fertili>er
in this world, wo"ld that be the basis in holding the
seller liable if it wo"ld came o"t that there are other
brands of fertili>er that are m"ch better than what was
sold to this b"yer$
7,%t c%nnot be t,e b%sis in ,ol'in$ t,e seller li%ble
bec%use0 t,%t *ill be tre%te' merely %s %n o-inion.
Unless suc, o-inion is m%'e by %n e2-ert0 suc, st%tement
c%nnot be t,e b%sis in ,ol'in$ t,e seller li%ble un'er t,is
e2-ress *%rr%nty.
3n a sale of a car, the seller told the b"yer that een
only with one liter of gasoline, yo" can drie this car
for 5+ )m. 3s this an e,press warranty$
7,is is %n e2%m-le o) %n e2-ress *%rr%nty0 %n' )%ilure o)
t,e c%r to consume $%s %t 18mJ6!8m m%y ,ol' t,e seller
li%ble )or bre%c, o) ,is e2-ress *%rr%nty.
&oes it mean that the word g"arantee is "sed, means
there is an e,press warranty$
No. Suc, *or' i) it 'oes not $o into t,e c,%r%cter o) t,e
t,in$0 t,e 3u%lity o) t,e t,in$ or its title0 suc, *oul' not
-ert%in to %n e2-ress *%rr%nty.
3n &ecember 1K85, %alador and the %tar %emi
Cond"ctor Company, e,ec"ted a deed of conditional
sale wherein the former agreed to sell his *+++ s!. m.
lot in Cainta, (i>al to the latter for the price of 1million,
payable 1++,+++ down. 1he balance 0+ days after the
s!"atters in the property hae been remoed. 3f the
s!"atters hae not been remoed after 0 mos., the
1++,+++ down payment shall be ret"rned by the endor
to the endee. %alador filed e-ectment s"its against
the s!"atters b"t despite of the decision of the Co"rt
in his faor, the s!"atters wo"ld still wo"ld not leae.
3n A"g"st 1K80, %alador offered to ret"rn the 1++,+++
down to the endee on the gro"nd that he was "nable
to remoe the s!"atters to the property. %%C ref"sed
to accept the money and demanded that %alador
e,ec"te a deed of absol"te sale of its property in its
faor, in which time it will pay the balance of its price.
1he al"e of the land had do"bled at that time,
%alador consigned the 1++) in co"rt and filed an
action for rescission of the deed of conditional sale,
pl"s damages. #ill the action prosper$
Un'er t,e )%cts0 S%l+%'or is not %n %$$rie+e' -%rty0 ,ence
,e *ill not ,%+e %ny reme'y un'er t,e l%*. In )%ct0 ,e *%s
t,e one *,o )%ile' to e+ict t,e s3u%tters.
7,e -%yment o) t,e b%l%nce %s %$ree' u-on is m%'e to
'e-en' u-on t,e remo+%l o) t,e s3u%tters *it,in 9 mos.
Cle%rly0 i) not0 im-lie'ly )rom t,e )%cts0 t,%t is %n obli$%tion
o) t,e seller0 %n' suc, is t,e con'ition )or t,e -%yment.
Since suc, con'ition 'i' not ,%--en0 *,erein t,e s3u%tters
)%ile' to )lee0 *oul' suc, con'ition )or t,e -%yment o) t,e
b%l%nce *oul' not %rise.
Un'er Art. 16560 it is t,e buyer *,o is $i+en o-tions un'er
t,e l%*0 'ue to t,e non ,%--enin$ o) t,e con'itions 'ue to
t,e )%ult o) t,e seller. 7,e o-tions o) t,e seller %re/ 1# Not to
-rocee' *it, t,e s%le bec%use t,e con'ition 'i' not
,%--enC # W%i+e t,e ,%--enin$ o) t,e con'ition %n'
-rocee' *it, t,e s%le. In t,is c%se t,e secon' o-tion *%s
c,osen by t,e buyer. 4# 7re%t t,e non ,%--enin$ o) t,e
con'ition %s % bre%c, o) *%rr%nty0 *,ic, c%n be t,e b%sis
o) ,ol'in$ t,e seller li%ble )or '%m%$es.
Im-lie' W %rr%nties
1. W%rr%nty %$%inst e+iction
. W%rr%nty %$%inst ,i''en 'e)ects
4. W%rr%nty o) 3u%lity (W%rr%nty o) )itness )or % -%rticul%r
-ur-ose#
3s warranty against hidden defects incl"de warranty of
fitness for a partic"lar p"rpose$
No bec%use0 in %n im-lie' *%rr%nty o) )itness )or %
-%rticul%r -ur-ose0 t,e t,in$ m%y not ,%+e %ny ,i''en
'e)ect. As to 1 million buyers t,ey *ill be )ine0 but0 %s to 1
-erson %s to ,im0 it m%y not be )it )or ,is -ur-ose.
1. W%rr%nty %$%inst e+iction
#hat is incl"ded in warranty against eiction$
1. 7,%t t,e seller ,%s t,e ri$,t to sell %t t,e time o*ners,i-
is to -%ssC %n'
. t,%t t,e buyer *ill ,%+e %n' en.oy t,e le$%l %n' -e%ce)ul
-ossession.

'ay the b"yer hold the seller liable for breach of

warranty against eiction if the b"yer was depried of
en-oyment and peacef"l possession, een if he was
not depried of ownership$
Fes. ;ec%use t,ere c%n be % .u'$ment in )%+or o) % t,ir'
-erson *,o *oul' ,%+e t,e ri$,t to t,e -ossession o) t,e
t,in$ but ,e is not t,e o*ner. One suc, -erson is % lessee.
Once t,e court consi'er % le%se contr%ct %s % +%li' %n'
bin'in$ le%se0 e+en %s %$%inst t,e buyer0 t,e buyer c%n be
'e-ri+e' o) t,e -ossession but ,e is not 'e-ri+e' o)
o*ners,i-. 7,us0 t,is coul' be % bre%c, o) *%rr%nty
%$%inst e+iction bec%use t,en0 ,e *oul' *%rr%nt t,%t t,e
buyer *oul' ,%+e % le$%l %n' -e%ce)ul -ossession o) t,e
t,in$.
#hat re!"isites proided by law in order to hold the
seller liable for breach of warranty against eiction by
the b"yer$
1. 7,ere must be % )in%l .u'$ment 'e-ri+in$ t,e buyer o)
t,e t,in$ in *,ole or in -%rtC
. 7,e seller must be noti)ie' (or summone' or consi'ere'
%s -%rty 'e)en'%nt#
4. 7,e re%son *,y t,e buyer *%s 'e-ri+e' o) t,e t,in$
must be b%se' on % ri$,t o) % t,ir' -erson e2istin$ e+en
-rior to t,e s%le or e+en i) suc, ri$,t o) t,e t,ir' -erson
%)ter suc, s%le t,%t must be b%e' on %ct im-ut%ble to
t,e +en'or.
#ill a mere letter of a third person claiming a right oer
a property, which letter was receied by the b"yer, can
the b"yer hold the seller liable$
O) course not. 7,e l%* re3uires t,%t t,ere must be )in%l
.u'$ment 'e-ri+in$ t,e buyer o) t,e t,in$ in *,ole or in
-%rt.
3n case there is a -"dgment, and s"ch -"dgment was in
faor of a third person against the b"yer, is it re!"ired
for the b"yer to appeal in order to hold the seller
liable$
No suc, %--e%l is re3uire' on t,e -%rt o) t,e buyer. ;ut i)
t,e seller 'oes not *%nt to be li%ble0 t,en ,e s,oul'
%--e%l.
A scenario where the b"yer was depried of the thing
based on a right of a third person e,isting een prior to
the sale$
One e2%m-le is in 'ouble s%les *,ere t,e secon' buyer
*%s 'e-ri+e' o) % t,in$ bec%use o) % ri$,t o) % )irst buyer0
,%+in$ t,e t,in$ )irst re$istere' in ,is n%me in $oo' )%it,.
A scenario where a b"yer was depried of a thing after
the sale which is imp"table to the endor$
In 'ouble s%les *,ere t,e )irst buyer *%s 'e-ri+e' o) t,e
t,in$ bec%use o) % ri$,t o) % secon' buyer *,ic, is
im-ut%ble to t,e +en'or0 suc, *,en t,e buyer *%s
'e-ri+e' i) suc, t,in$ bec%use o) %n e2ecution s%le 'ue to
)%ilure o) t,e seller to -%y re%l -ro-erty t%2 i) t,e t%2
%ccrue' be)ore t,e s%le.
3f the b"yer was depried of the thing based on the
-"dgment of the co"rt that a third person ac!"ired the
property by ac!"isitie prescription, can the seller be
held liable for breach of warranty against eiction$
It 'e-en's on *,et,er t,e -rescribe -erio' ,%' %lre%'y
been com-lete' %t t,e time o) t,e s%le or not. :or e2%m-le0
i) t,is is b%se' on t,e 1! ye%r %c3uisiti+e -rescri-tion *it,
color o) title0 i) t,e occu-%nt in *,ose )%+or t,e court
'eci'e' *,o %c3uire' t,e -ro-erty resultin$ in t,e
'e-ri+%tion o) t,e buyer o) suc, -ro-erty *%s %lre%'y in
-ossession )or < ye%rs %t t,e time o) t,e s%le0 but t,e buyer
ne+er e+en bot,ere' to e2%mine t,e -%rcel o) l%n'. W,en
,e %rri+e' %)ter 1 ye%rs t,ere is % .u'$ment in )%+or o) t,e
occu-%nt bec%use t,e occu-%nt *%s %ble to com-lete t,e
1! ye%r -erio' -rescribe by l%* *it,out interru-tion. >ere0
t,e buyer c%nnot ,ol' t,e seller li%ble. 7,is is no lon$er t,e
)%ult o) t,e seller *,en t,e occu-%nt *%s %ble to com-lete
t,e -erio'. I) t,e buyer only *rote % letter 'em%n'in$ t,e
occu-%nt to +%c%te t,e -remises t,%t *oul' ,%+e
interru-te' t,e runnin$ o) t,e -rescri-ti+e -erio'. It is t,e
)%ult o) t,e buyer *,y ,e is 'e-ri+e' o) t,is l%n'.
3f the seller wo"ld be liable "nder this warranty against
eiction, what are the possible liabilities of the seller$
Un'er t,e l%*0 +%lue o) t,e t,in$ %t t,e time o) e+iction not
t,e -rice0 inclu'in$ t,e )ruits0 costs0 income %n' e2-enses
%n' '%m%$es %n' interest.
A -erson c%n only be ,el' li%ble )or '%m%$es i) ,e is in b%'
)%it,. A seller m%y be ,el' li%ble )or '%m%$es in rel%tion to
t,is *%rr%nty %$%inst e+iction i) ,e *%s in b%' )%it,.
#hen wo"ld the seller be considered to be in bad
faith$ 3f the seller )new of the defect of his title at the
time of the sale, therefore he is a seller in bad faith$
Not necess%rily0 ,e m%y ,%+e 8no*n o) t,e 'e)ect in ,is
title0 but ,e ,%' in)orme' t,e buyer. E+en i) ,e 8ne* o) t,e
'e)ect in ,is title %n' ,e 'i' not in)orm t,e buyer o) suc,
'e)ect0 ,e nee' not be in b%' )%it, bec%use -rob%bly t,e
buyer *%s %lre%'y %*%re o) t,e 'e)ect o) ,is title.
3f the seller e,ec"ted a waier een in case of eiction,
where s"ch b"yer agree that he will not hold the seller
liable for the depriation of s"ch thing, can the seller
be held liable$
Fes0 i) t,e seller is in b%' )%it,0 bec%use un'er t,e l%*0
suc, *%i+er is +oi'0 %n' t,ere)ore t,e seller c%n be ,el'
li%ble.
4
3f the b"yer e,ec"ted a waier, and the seller acted in
good faith, may the seller be held liable$
Fes0 t,e seller m%y be ,el' li%ble *,en t,e *%i+er is 8no*n
%s *%i+er consciente. It is % *%i+er consciente *,en t,e
buyer e2ecute' % *%i+er not 8no*in$ t,e 'e)ect o) t,e title
o) t,e seller0 %t t,e s%me time t,e seller 'oes not li8e*ise
8ne* o) suc, 'e)ect. 7,e seller is li%ble )or only t,e +%lue
o) t,e t,in$ %t t,e time o) e+iction0 e2clu'in$ t,e ot,er
li%bilities.
I) t,e *%i+er is %n intencion%'% *%i+er0 *it, )ull 8no*le'$e
o) t,e -ossibility o) e+iction. In ot,er *or's0 ,e 8no*s t,e
'e)ect in t,e title o) t,e seller *,en ,e bou$,t %n' *,en ,e
e2ecute' t,e *%i+er. O) course t,e buyer c%n no lon$er
,ol' t,e seller li%ble )or bre%c, o) *%rr%nty %$%inst e+iction.
3f there is no waier, and the b"yer was depried, will
the seller be held liable$
O)0 course0 t,e only 'i))erence is t,e e2tent o) t,e li%bility o)
t,e seller *,et,er ,e is in $oo' )%it, or b%' )%it,. I) seller is
in b%' )%it,0 ,e *ill be e+en li%ble )or '%m%$es in c%se o)
e+iction.
W %rr%nty %$%inst ,i''en )%ults or 'e)ects
#hat are the re!"irements in order for the seller to be
held liable for breach of warranty against hidden
defects$
1. 7,e 'e)ect must be ,i''en %n' not -%tent.
. 7,e 'e)ect must ,%+e %lre%'y e2iste' %t t,e time o) t,e
s%le.
3f the b"yer discoered the defect on the thing bo"ght
1+ days after the sale, the seller will be liable for
breach of warranty against hidden defects$
Not necess%rily bec%use t,e 'e)ect m%y be -%tent0 ,ence
t,e seller c%nnot be ,el' li%ble. Secon'ly0 t,e 'e)ect m%y
e2ist %t t,e time %)ter t,e s%le0 t,ere)ore t,e seller c%nnot
be ,el' li%ble )or bre%c, o) *%rr%nty %$%inst ,i''en
'e)ects.
3n case the seller is held liable for breach of warranty
against hidden defects, what are the possible liability
of the seller$
1. I) t,e t,in$ *%s lost or 'estroye' 'ue to % )ortuitous
e+ent or it *%s lost or 'estroye' 'ue to t,e )%ult o) t,e
buyer0 m%y t,e seller still be ,el' li%ble=
Fes t,e seller *ill still be ,el' li%ble bec%use t,e t,in$
,%' ,i''en 'e)ects.
I) t,e c%use o) t,e loss *%s 'ue to t,e )%ult o) t,e
buyer or to % )ortuitous e+ent0 t,e li%bility o) t,e seller
is to return t,e -rice less +%lue %t t,e time o) t,e loss
*,et,er t,e seller is on $oo' )%it, or b%' )%it,.
D%m%$es *ill only be $r%nte' i) t,e seller is in b%'
)%it,. >e is in b%' )%it, *,en t,e seller 'i' not in)orm
t,e buyer o) t,e 'e)ect.
. I) t,e t,in$ *%s lost 'ue to t,e 'e)ect itsel)
7,e li%bility *ill be $re%ter i) t,e c%use o) t,e loss *%s
'ue to t,e 'e)ect itsel)0 t,%n *,en t,e c%use o) t,e
loss *%s 'ue to t,e )%ult o) t,e buyer or to % )ortuitous
e+ent.
In c%se o) 'e)ect t,e seller ,%s to return t,e -rice in
$oo' )%it, or in b%' )%it,.
D%m%$es *ill only be $r%nte' i) t,e seller is in b%'
)%it,. >e is in b%' )%it, *,en t,e seller 'i' not in)orm
t,e buyer o) t,e 'e)ect.
Note/ D%m%$es %n' interest c%nnot concur in c%se o) loss
'ue to t,e 'e)ect. W,en t,e seller is in b%' )%it, (+en'or
*%s %*%re o) t,e 'e)ect# '%m%$es is $r%nte'0 i) in $oo'
)%it, (+en'or *%s not %*%re o) t,e 'e)ect# interest s,%ll be
$r%nte'.
In *%rr%nty %$%inst e+iction0 interest %n' '%m%$es concur.
3f the thing was lost or destroyed d"e to a fort"ito"s
eent, fa"lt of the endee, or d"e to the defect itself,
how can the b"yer proe that the thing had hidden
defects, when the thing was lost$
It is % m%tter o) -roo). 7,e buyer mi$,t ,%+e %llo*e' %n
e2-ert to e2%mine t,e t,in$ be)ore t,e loss o) t,e t,in$. >e
,%s % -roo) o) t,e 'e)ect o) t,e t,in$ be)ore its loss.
2en if the thing with hidden defects was lost or
destroyed, is it possible that the seller will not be liable
for a single centao, een witho"t a waier$
W,en t,e loss *%s 'ue to % )ortuitous e+ent or )%ult o) t,e
+en'ee0 %n' t,e +en'or *%s not %*%re o) t,e 'e)ect. In t,is
scen%rio t,e li%bility o) t,e seller is only to return t,e -rice
less +%lue. ;ut *,en t,e +%lue is $re%ter t,%n t,e -rice0 t,e
seller *oul' no lon$er return t,e -rice less +%lue ,ence no
li%bility. 7,e +%lue m%y be $re%ter t,%n t,e -rice *,en t,e
seller sol' t,e t,in$ less t,%n its +%lue or t,e t,in$ *%s sol'
%t its +%lue but t,ere *%s %--reci%tion o) t,e +%lue. Lesion
'oes not %))ect t,e +%li'ity o) t,e s%le.
Inclu'e' in t,is *%rr%nt %$%inst ,i''en 'e)ects0 *oul'
-ert%in to %ny c,%r$e or non-%--%rent encumbr%nce not
'ecl%re' or 8no*n to t,e buye r.
1. In rel%tion to % s%le o) % -%rcel o) l%n'0 %n' suc, is
sub.ect to % ri$,t o) *%y0 *ill t,e seller be li%ble in
rel%tion to bre%c, o) *%rr%nty=
Not necess%rily. (%ybe it *%s 8no*n to t,e buyer or it
*%s 'ecl%re' to t,e buyer. E+en i) it is not 'ecl%re'
%n' not 8no*n to t,e buyer but t,e encumbr%nce is
5
%--%rent0 ,ence t,e seller c%nnot be ,el' li%ble )or
bre%c, o) *%rr%nty. E+en i) not 8no*n or *%s 'ecl%re'
to t,e buyer or t,e encumbr%nce is non %--%rent0 t,e
seller m%y be li%ble *,en t,e encumbr%nce is
re$istere'.
1he sale of a parcel of land was entered into Gan"ary *,
*++K. 1he b"yer filed an action for breach of warranty
against hidden defects pertaining to any charge or non
apparent enc"mbrance "n)nown to the b"yer, beca"se
of a right of way only last friday, will the action
prosper$
It 'e-en's on *,%t 8in' o) %ction. I) t,e %ction is %n %ction
)or rescission0 it *ill not -ros-er bec%use t,e l%* re3uires
t,%t t,e %ction )or rescission s,oul' be )ile' *it,in 1 ye%r
)rom t,e '%te o) t,e contr%ct. It is more t,%n 1 ye%r.
I) t,is is %n %ction )or '%m%$es0 it (AF -ros-er 'e-en'in$
on *,en t,e buyer 'isco+ere' t,e encumbr%nce. 7,e l%*
re3uires t,%t %n %ction )or '%m%$es m%y be )ile' *it,in 1
ye%r )rom 'isco+ery o) t,e encumbr%nce. W,en it is *it,in
suc, -erio'0 t,en t,e %ction *ill -ros-er.
S%le o) Anim%ls *it, 'e)ects or 'ise%ses (re',ibitory
'e)ects#
A re',ibitory 'e)ect c%nnot be 'isco+ere' 'es-ite %n
e2%min%tion by %n e2-ert.
3f a b"yer bo"ght L dogs and one of them t"rned o"t to
hae a redhibitory defect, will an action for redhibition
be a remedy not only as to the animal with the defect
b"t also as to the other animals$
As % rule0 no. Re',ibition *oul' only -ert%in to 'e)ecti+e
%nim%ls0 unless t,e buyer c%n -ro+e t,%t ,e *oul' not
,%+e bou$,t t,e ot,ers ,%' ,e 8no*n o) t,e 'e)ect o) one.
7,e bur'en o) -roo) in -ro+in$ t,%t t,e buyer *oul' not
,%+e bou$,t t,e 'o$s ,%' ,e 8no*n o) t,e 'e)ect o) one is
t,e buyer0 but un'er cert%in circumst%nces t,e l%* *oul'
-resume t,%t t,e buyer *oul' not ,%+e bou$,t t,e ot,ers
,%' ,e 8no*n o) t,e 'e)ect o) one. 7,is *oul' ,%--en
*,en ,e bou$,t t,e %nim%ls in -%irs0 %s % te%m or %s %
$rou-.
3f the animal bo"ght died 5 days after the sale, can the
b"yer still demand for the ret"rn of the price$
7,e seller c%n no lon$er be ,el' li%ble )or bre%c, o)
*%rr%nty bec%use t,e l%* re3uires t,%t t,e %nim%l s,oul'
'ie *it,in 4 '%ys. 7,e 'ise%se must be e2istin$ %t t,e time
o) s%le.
7,e seller c%n ,o*e+er0 be obli$e' to return i) t,e 'e%t,
%lt,ou$, it ,%--ene' more t,%n 4 '%ys %)ter t,e s%le0 *%s
c%use' by % cont%$ious 'ise%se. Un'er t,e l%*0 t,is
contr%ct is +oi'0 ,ence t,e seller c%n be com-elle' to
return t,e -rice -%i' by t,e buyer.
Are there no implied warranties in -"dicial sales$
:%lse. 7,ere c%n be im-lie' *%rr%nties in .u'ici%l s%les.
1. 7,ere seems to be % -ro+ision *,ere cert%in -ersons
suc, %s mort$%$ees0 -le'$ees0 %uctioneers0 %n'
s,eri))s0 c%nnot be ,el' li%ble )or bre%c, o) *%rr%nty.
Since % s,eri)) is t,e seller in % .u'ici%l s%le0 %n' un'er
t,e l%* ,e c%nnot be ,el' li%ble0 it is conclu'e' t,%t
t,ere %re no im-lie' *%rr%nties in .u'ici%l s%le. Suc,
+ie* is incorrect0 it 'oes not )ollo* t,%t t,e s,eri)) c%nnot
be ,el' li%ble. It 'oes not me%n t,%t *,en t,e s,eri))
c%nnot be ,el' li%ble0 it 'oes not )ollo* t,%t no one c%n
be ,el' li%ble. 7,e .u'$ment 'ebtor c%n be ,el' li%ble0
unless t,e contr%ry *%s 'ecree' in t,e .u'$ment.
. In .u'ici%l s%le0 norm%lly t,ese %re secon' ,%n' items0
,ence0 t,ere is no *%rr%nty %s to ,i''en 'e)ects= :%lse0
bec%use t,e s,eri)) c%n le+y br%n' ne* -ro-erties0 suc,
*,en t,e seller *%s in t,e business o) sellin$ br%n' ne*
items. In t,is l%tter c%se0 t,e .u'$ment 'ebtor m%y be
,el' li%ble )or bre%c, o) *%rr%nty %$%inst ,i''en 'e)ects.
Un'er Art. 16<!0 t,e l%* -ro+i'es %s to t,e rules
in+ol+in$ *%rr%nty %$%inst ,i''en 'e)ects t,ey *ere
m%'e e2-ressly %--lic%ble to .u'ici%l s%les.
Ri$,ts %n' obli$%tions o) t,e +en'ee
#hat are the rights of the endee$
1. Ri$,t to t,e :ruits
By means of a p"blic instr"ment, 'r. Bagbibili sold his
mango plantation to Abentorero effectie immediately.
1he parties agreed that the deliery will be effected 0
mos. from e,ec"tion of the deed of sale. #hen the said
period arried Abent"rero demanded the thing, b"t
Bagbibili dili dallied. 3t was only a month afterwards
when Bagbibili finally deliered the land to Abent"rero.
3n the three wee)s before deliery, Bagbibili sold and
delier the entire prod"ce of the 'ango plantation to
'r. Commerciante. 'r. Commerciante )nown nothing
of the contract between Bagbibili and Abent"rero.
Abent"rero now see)s to recoer from Commerciante
either the f"ll al"e of the mangoes or a similar amo"nt
and !"ality of the mangoes sold. &oes abent"rero
hae the right to the fr"its against Commerciante$
Un'er t,e l%* -%rticul%rly Art. 169<0 t,e buyer s,%ll ,%+e
t,e ri$,t to t,e )ruits o) t,e t,in$ )rom t,e time o) t,e
-er)ection o) t,e s%le. In rel%tion to Art. 11950 t,e cre'itor
s,%ll be entitle' to t,e )ruits o) t,e t,in$ )rom t,e time t,e
obli$%tion to 'eli+er it %rises.
In t,eir %$reement t,e obli$%tion to 'eli+er *ill %rise only
%)ter 9 mos. t,ere)ore t,e buyer *ill not be entitle' to t,e
)ruits 'urin$ t,e 9 mo. -erio'. 7,ou$, un'er t,e )%cts0
Abenturero %lre%'y ,%' t,e ri$,t to t,e )ruits0 Abenturero
'oes not ,%+e t,e ri$,t to reco+er %$%inst Commerci%nte
bec%use un'er Art. 11950 ,e *ill not ,%+e %ny re%l ri$,t
6
o+er t,e t,in$ until t,e %ctu%l 'eli+ery o) t,e t,in$ to ,im.
7,e only reme'y o) Abenturero is only %$%inst N%$bibili
since0 Commerci%nte ,%' no 8no*le'$e o) suc, s%le
bet*een N%$bibili %n' Abenturero.
#hat if d"ring the 0 month period, Bagbibili harested
the fr"its and sold it to Commerciante, can Abent"ero
recoer these fr"its or the al"e thereof$
Abenturero 'oes not ,%+e t,e ri$,t to t,e )ruits bec%use
Abenturero s,%ll only ,%+e t,e ri$,t to t,e )ruits o) t,e t,in$
)rom t,e time t,e obli$%tion to 'eli+er it %rises. Un'er t,e
)%cts0 it *%s ,%r+este' be)ore t,e 9 mont, -erio' %n'
'urin$ suc, time N%$bibili is un'er no obli$%tion to 'eli+er
t,e )ruits.
. Ri$,t o) e2%min%tion
3f the goods were deliered by the seller to the place of
b"siness of the b"yer, and the goods were receied by
the b"yer, does it mean that ownership already passed
"pon receipt of the goods$
Not necess%rily. Recei+in$ is 'i))erent )rom %cce-tin$. In
or'er t,%t o*ners,i- is to -%ss0 t,e l%* re3uires t,%t t,e
buyer must ,%+e %cce-te' t,e $oo's. Recei+in$ is only
-relimin%ry to %cce-tin$0 in )%ct recei+in$ is necess%ry )or
,im to e2ercise % ri$,t *,ic, is t,e ri$,t o) e2%min%tion or
ins-ection be)ore ,e %cce-ts. As to *,en ,e *ill be
'eeme' to ,%+e %cce-te'0 *,en ,e intim%tes ,is
%cce-t%nce to t,e seller or *,en ,e 'i' %n %ct inconsistent
*it, t,e o*ners,i- o) t,e seller0 %)ter t,e l%-se o) %
re%son%ble time.
3s it possible that the endee "pon receiing, he
already accepted$
Fes0 *,en t,e +en'ee ,%' *%i+e' t,e ri$,t o) e2%min%tion
by e2-ress sti-ul%tion0 or by cert%in %rr%n$ements t,%t m%y
be %$ree' u-on by t,e -%rties *,erein t,ere *ill be no ri$,t
o) e2%min%tion -relimin%ry to %cce-t%nce.
E.$. In s%le o) co%l )rom t,e loc%tion o) t,e site o) t,e
minin$ com-%ny0 it *ill be 'eli+ere' to C%l%c% -l%nt in
;%t%n$%s0 *,en t,e co%l *%s recei+e' by N%-ocor0 it is
'eeme' %cce-te'. 7,ere *ill be no e2%min%tion
-relimin%ry to %cce-t%nce. >o*e+er0 t,ere *ill be %n
e2%min%tion %)ter recei+in$ not )or t,e -ur-ose o)
'eterminin$ *,et,er it *ill be %cce-te' or not0 but t,e
-ur-ose *ill only be )or t,e )i2in$ o) t,e -rice0 %n' %scert%in
t,e 3u%lity o) t,e co%l.
Are C4& sales hae right of e,amination$
None bec%use u-on 'eli+ery0 t,e buyer -%ys0 %n' t,e
buyer is 'eeme' to ,%+e %cce-te'.
3f the goods were deliered to the place of b"siness of
the b"yer which goods were receied by the b"yer b"t
sometimes the employees of the seller will leae the
place immediately. After 1 ho"r the b"yer called the
seller informing him that he is re-ecting the goods,
and told the seller to obtain the goods in the place of
the b"yer. B"t before the seller co"ld obtain the goods
from the b"yer8s place, all the goods were destroyed.
Can the b"yer be held liable for the price of these
goods$
It 'e-en's on t,e re%son )or t,e re)us%l to %cce-t. I) t,ere
is no .ust c%use )or t,e re)us%l0 un'er t,e l%* o*ners,i- is
'eeme' to -%ss to t,e buyer0 ,ence0 t,e o*ner be%rs t,e
loss. As suc,0 ,e c%n be com-elle' to -%y t,e -rice.
I) t,ere is % $oo' %n' +%li' re%son0 -rob%bly t,e $oo's
*ere 'e)ecti+e0 suc, t,%t ,e ,%' to re.ect t,e $oo's0 t,e
l%* e2-ressly -ro+i'es t,%t o*ners,i- *ill not -%ss to ,im
%n' ,e c%nnot be com-elle' to -%y t,e -rice.
6"rs"ant to a sale, the seller deliered the rice field *
years ago, b"t the payment was only made today. Can
the seller demand to pay interest on the price$
Or'in%rily0 t,e buyer c%nnot be ,el' li%ble )or t,e interest
on t,e -rice. Unless t,ere is %n e2-ress sti-ul%tion to t,e
contr%ry0 interest c%nnot be 'em%n'e'. As %n e2ce-tion0
t,e seller c%n +%li'ly 'em%n' interest only i) t,ere *%s
suc, % sti-ul%tion to -%y interest.
E+en i) t,ere is no suc, sti-ul%tion to -%y interest0 t,e
buyer m%y be ,el' li%ble to -%y interest i) t,e t,in$ is )ruit
be%rin$. Un'er t,e )%cts0 t,e l%n' sol' is % rice )iel'0
,ence0 it is )ruit be%rin$. An' %s suc,0 t,e buyer c%n be
com-elle' to -%y interest on t,e -rice.
E+en i) t,ere is no sti-ul%tion %n' e+en i) t,e t,in$ is not
)ruit be%rin$0 ,e m%y be ,el' li%ble )or interest in t,e -rice
bec%use t,e buyer is %lre%'y in 'el%y %)ter .u'ici%l or
e2tr%.u'ici%l 'em%n' is m%'e by t,e seller.
It must be noted, under $ $"!, there is no need for
demand, when one of the parties had complied with his
obligation, delay by the other begins. %nder this scenario
this presupposes that there is a period within which to pay
and the period had already prescribed, and in such case
there has to be a &udicial or e'tra&udicial demand.
4. (%ce'% L%* RA 966 - Ri$,t o) t,e +en'ee
7,e Re%lty Inst%llment ;uyer Act - 7,is l%* is inten'e' to
-rotect or'in%ry buyers.
7,is l%* c%n only be in+o8e' *,en t,e ob.ect o) t,e s%le is
% re%lty. Cle%rly0 t,is c%nnot be in+o8e' i) t,e ob.ect o) t,e
s%le is % -erson%l -ro-erty or % mo+%ble -ro-erty.
3f it is an immoable property, is it coered by the
'aceda Daw$
9
Not necess%rily. W,%t is co+ere' by t,e (%ce'% L%* %re
re%lties. Not e+ery immo+%ble is co+ere' by t,e (%ce'%
L%*.
3f it is a realty is it coered by the 'aceda Daw$
Not necess%rily. It must be % resi'enti%l re%lty0 %n' not
commerci%l or in'ustri%l re%lty.
A sale on installment is a sale on credit$ 3f a sale on
installment is a sale on credit, a sale on credit is
coered by the 'aceda Daw$
A s%le on inst%llment is % s%le on cre'it0 but % s%le on cre'it
nee' not necess%rily me%n it is co+ere' by t,e (%ce'%
L%*0 bec%use % s%le on cre'it nee' not be on inst%llment
b%sis.
A s%le o) % con'ominium unit *,ere 1J4 o) t,e -rice *ill be
-%i' u-on si$nin$ o) t,e contr%ct0 but t,e b%l%nce *ill be
-%i' *it,in % ye%r. Suc, is not co+ere' by t,e (%ce'% L%*
bec%use t,%t is not % s%le on inst%llment b%sis. 7,is is %
s%le on cre'it on % str%i$,t term b%sis.
3n a sale on installment payable in *+ years or E+ years,
a b"yer was able to religio"sly pay his monthly
ammorti>ation for 1+ years, what if on the 11th year the
b"yer for one reason or another, he was no longer able
to pay. #hat will be the effect$
3s the maceda law be ino)ed if the b"yer was able to
pay installments for at least two years$
:%lse. E+en i) t,e buyer *%s not %ble to -%y inst%llments
)or % )ull t*o ye%rs0 t,e buyer c%n ,%+e ri$,ts un'er t,e
l%*. I) ,e %lre%'y -%i' )or t*o ye%rs0 ,e *oul' ,%+e better
ri$,ts.
#hat are the rights of the b"yer if he only paid for less
than * years$
>e is $i+en % minimum o) 9! '%y $r%ce -erio' *,ic, c%n
be incre%se' %t t,e o-tion o) t,e seller but no less t,%n 9!.
In t,is $r%ce -erio'0 t,e ri$,ts o) t,e buyer %re/ 1# >e c%n
u-'%te ,is %ccounts # 1%y t,e %rre%rs *it,out bein$ ,el'
li%ble )or -en%lties0 surc,%r$es0 interests0 ,e c%n -%y t,e
entire b%l%nce 'urin$ t,is $r%ce -erio'. 4# Sell ,is interest
un'er t,is contr%ct 5#Assi$n ,is interest or ri$,ts un'er t,is
contr%ct.
3f the b"yer was able to pay installments for at least
two years, what are the rights of the b"yer$
7,e buyer *ill be entitle' to % -ortion o) t,e %mounts -%i'0
8no*n %s t,e C%s, Surren'er V%lue in % minimum o) 6!G
)or ye%rs o) %ll -%yments m%'e. A)ter %not,er 6 ye%rs or i)
,e -%i' )or % tot%l o) < ye%rs0 entitle' to %not,er 6G *,ic,
me%ns 66G0 %n' e+ery ye%r t,ere%)ter0 %''ition%l 6G0 but
not to e2cee' "!G.
6riscilla p"rchased a condomini"m "nit in 'a)ati City
from the Cityland Corporation for a price of 1+ million
payable E million down and the balance thereon shall
be paid in 0+ e!"al monthly installments. 1hey
e,ec"ted a deed of conditional sale in which it is
stip"lated that sho"ld the endee fail to pay E
s"ccessie monthly installments, the sale shall be
deemed a"tomatically rescinded witho"t the necessity
of -"dicial action and the act"al payments made by the
endee shall be forfeited in faor of the endor by way
of rental for the "se and occ"pancy of the "nit and
li!"idated damages. 7or 40 months 6riscilla paid
monthly installments religio"sly, b"t on the 4Lth and
48th month she failed to pay. 4n the 4Kth month she
tried to pay the installment d"e, b"t the endor ref"sed
to receie the payments tendered by her. 1he following
month the endor sent her a notice that he was
rescinding the deed of conditional sale p"rs"ant to the
stip"lation of a"tomatic rescission and demanded that
she acate the premises. %he replied that the contract
cannot be rescinded witho"t -"dicial demand or
notarial act p"rs"ant to Art. 15K* of the Ciil Code.
Can the endor rescind the contract$
No0 bec%use t,e ob.ect o) s%le is % resi'enti%l unit %n'
un'er t,e (%ce'% L%*0 t,ere %re t*o sti-ul%tions t,%t %re
'ecl%re' +oi' by t,is l%*. One o) t,e sti-ul%tion is t,e
sti-ul%tion -ro+i'in$ )or t,e %utom%tic rescission o) t,e
contr%ct. Anot,er +oi' sti-ul%tion un'er t,e (%ce'% L%* is
8no*n %s t,e )or)eiture cl%use. In ot,er *or's0 t,e buyer is
entitle' to t,e C%s, Surren'er V%lue e+en i) t,ere is %
)or)eiture cl%use. Suc, cl%use is % +oi' cl%use un'er t,e
(%ce'% L%*.
7,e +en'or c%nnot rescin' bec%use un'er t,is (%ce'%
L%*0 t,e buyer ,%' %lre%'y -%i' )or %t le%st t*o ye%rs. 7,e
buyer is entitle' to % $r%ce -erio' *,ic, is 1 mont, )or
e+ery ye%r. Un'er t,e )%cts 1riscill% ,%' %lre%'y -%i' )or 59
mont,s0 %n' t,us ,%+in$ com-lete' -%yin$ 4 ye%rs s,e is
entitle' to % 4 mont,s $r%ce -erio' e3ui+%lent to "! '%ys.
On t,e 5"t, inst%llment o))ere' to -%y0 s,e '%)%ulte' on t,e
5<t, %n' 5Et, mont, ,ence0 t,ere is 9! '%ys *it,in *,ic,
s,e 'i' not -%y *,ic, *%s *ell *it,in t,e "! '%y $r%ce
-erio'. >%' s,e not o))ere' to -%y on t,e 5"t, mont,0
rescission m%y be % reme'y on t,e -%rt o) t,e seller.
>ence0 rescission c%nnot be % reme'y on t,e -%rt o) t,e
seller.
I) rescission is % reme'y0 t,e seller is obli$e' to return t,e
c%s, surren'er +%lue to t,e buyer. 7,ere c%n be no +%li'
rescission *it,out t,e return o) t,is c%s, surren'er +%lue.
3f the price is to be paid in 15 years and b"yer failed to
pay on the 5th month of the first year, how long is the
grace period$ /e has a grace period of 0+ days.
1hereafter he was able to pay the 5th, 0th, Lth, and in
fact he was able to pay installments "p to the 5th year.
4n the 5th month of the 5th year, he defa"lted again.
/ow long is the grace period$
<
None. Un'er t,is l%*0 t,e buyer c%n only %+%il o) t,e $r%ce
-erio' once in e+ery 6 ye%rs o) inst%llments.
Reme'ies
#hat are the remedies of the "npaid seller$
1. 1ossessory Lien
. Ri$,t o) Sto--%$e in 7r%nsitu
4. Ri$,t to Rescin'
5. Ri$,t o) Res%le
6. D%m%$es
9. S-eci)ic 1er)orm%nce
<. Recto L%*
3f the b"yer paid K+. of the price can the seller still
ino)e these remedies$
Fes0 %s lon$ %s t,e -rice ,%s not be )ully -%i'0 t,e seller is
still %n un-%i' seller.
E+en i) t,e buyer -%i' % c,ec8 )or t,e )ull %mount0 t,e seller
m%y still ,%+e t,e ri$,t to in+o8e t,ese reme'ies i) t,e
c,ec8 *%s 'is,onore'0 not 'ue to t,e )%ult o) t,e seller.
'ay a person who is not a party to the sale be able to
ino)e any of these remedies$
Fes bec%use t,e l%* -ro+i'es t,%t t,e *or' seller *oul'
inclu'e cert%in t,ir' -ersons0 suc, %s %ssi$nees or ,eirs o)
t,e seller0 or %n %$ent to *,om % bill o) l%'in$ *%s
en'orse'.
'ay these remedies be ino)ed if theses remedies
already passed to the b"yer$
Fes0 by e2-ress -ro+ision o) t,e l%*.
/ow can the seller hae the right to retain or
possessory lien if ownership already passed$
1ossession by t,e seller m%y be ret%ine' bec%use o)
constructi+e 'eli+ery. Wit, constructi+e 'eli+ery0 o*ners,i-
m%y %lre%'y be *it, t,e buyer0 but -ossession m%y still
be *it, t,e seller0 or t,e seller *%s merely constitute' %s %
'e-osit%ry. O*ners,i- %lre%'y -%sse' but t,e seller still
,%s t,e ri$,t to *it,,ol' t,e 'eli+ery o) t,e $oo's.
Are these remedies alternatie or can be ino)e all at
the same time$
As to t*o reme'ies0 t,ey c%nnot e2ist %t t,e s%me time0
%n' t,ese %re -ossessory lien %n' sto--%$e in tr%nsitu
bec%use % re3uirement )or t,e ri$,t o) sto--%$e in tr%nsitu
to %rise is t,%t t,e seller must ,%+e %lre%'y -%rte'
-ossession0 %n' -ossession is % re3uirement in
-ossessory lien. ;ut i) t,e seller -ro-erly e2ercise' t,e
ri$,t o) sto--%$e in tr%nsitu0t,e im-lic%tion is t,%t t,e seller
*ill be re+erte' b%c8 to its -ossessory lien.
>o*e+er0 %s to t,e t*o ot,er reme'ies o) ri$,t o) res%le
%n' ri$,t o) rescission0 t,e l%* e+en e2-ressly re3uires t,%t
t,e seller must still ,%+e -ossessory lien or ,e must ,%+e
e2ercise' t,e ri$,t o) sto--%$e in tr%nsitu.
1ossessory Lien
7,is -ossessory Lien is t,e ri$,t to *it,,ol' 'eli+ery or t,e
ri$,t to ret%in. No*,ere in t,e Co'e *ill one )in'
-ossessory lien. ;ut t,e -o-ul%r n%me is -ossessory lien0
to 'istin$uis, t,is lien o) t,e seller )rom %not,er lien o) t,e
seller in % scen%rio *,ere t,e $oo's ,%+e %lre%'y been
'eli+ere' to t,e buyer. Un'er t,e rules on -re)erence on
t,e concurrence %n' -re)erence o) cre'its0 %s to % t,in$
*,ic, *%s t,e ob.ect o) % s%le0 *,ic, *%s %lre%'y
'eli+ere' to % buyer *,o t,ere%)ter bec%me insol+ent0 t,e
seller ,%s -re)erence %s to t,e un-%i' -rice o+er t,e t,in$.
3s insolency re!"ired in order for this right to
withhold can be e,ercised$
No. It is not necess%ry or re3uire'0 but it is one o) t,e
$roun's )or t,e seller to *it,,ol' t,e 'eli+ery o) t,e $oo's.
E+en i) t,e buyer is not insol+ent but t,ere is no sti-ul%tion
%s to cre'it0 t,e buyer still 'i' not -%y0 t,e seller ,%s t,e
ri$,t to ret%in t,e $oo's.
E+en i) t,ere *%s sti-ul%tion %s to cre'it suc, t,%t t,e
buyer *%s $i+en % -erio'0 but 'es-ite t,e l%-se o) t,e
-erio' t,e buyer still 'i' not -%y0 t,e seller c%n still ret%in
t,e $oo's.
3f the goods were deliered by the seller to a common
carrier, p"rs"ant to their stip"lation in the contract for
"ltimate deliery to the b"yer, does it mean that the
seller has lost its lien oer the goods$
As % rule0 'eli+ery to % common c%rrier is 'eli+ery to t,e
buyer. ;ut e+en i) t,e $oo's *ere 'eli+ere' to t,e common
c%rrier0 t,e seller m%y not ,%+e lost ,is lien. 7,ere)ore ,is
reme'y is -ossessory lien %n' not sto--%$e in tr%nsitu.
7,is *oul' ,%--en i) ,e reser+e' o*ners,i- o+er t,e t,in$.
W,%t is -ro+i'e' un'er t,e l%* *ill inclu'e reser+%tion o)
o*ners,i-. 7,ere is somet,in$ *ron$ *it, t,e +ie* t,%t
-ossessory lien m%y be in+o8e' *,en t,e seller reser+e'
o*ners,i-0 bec%use it 'oes not m%tter *,et,er t,e seller
reser+e' o*ners,i- or not in rel%tion to -ossessory lien.
E+en i) o*ners,i- ,%' %lre%'y -%sse' ,e m%y still ,%+e t,e
ri$,t to ret%in t,e $oo's.
I) t,ere is % reser+%tion o) -ossession0 t,ere *ill be no
-roblem since t,e seller *oul' ,%+e t,e ri$,t to obt%in t,e
$oo's )rom t,e common c%rrier0 ,e 'i' not lose ,is
-ossessory.
Sto--%$e in 7 r%nsitu
As to sto--%$e in tr%nsitu0 once t,e seller ,%' %lre%'y
-%rte' -ossession %n' t,e $oo's %re %lre%'y in tr%nsit %n'
t,e %s %not,er re3uisite t,e buyer is %lre%'y insol+ent.
7%8e note t,%t t,e insol+ency o) t,e buyer nee' not ,%--en
%t t,e time o) t,e -er)ection o) t,e contr%ct. E+en i) t,e
E
insol+ency occurre' *,ile t,e $oo's *ere %lre%'y in
tr%nsit. t,%t c%n be t,e b%sis o) t,e e2ercise o) t,is ri$,t.
7,ere is no 3uestion %s to t%8in$ %ctu%l -ossession o+er
t,e $oo's. ;ut t,e ot,er m%nner o) e2ercisin$ t,e ri$,t is
by $i+in$ notice to t,e common c%rrier %s to t,e e2ercise o)
t,e ri$,t. 7,e -roblem ,ere *oul' be in t,e scen%rio *,ere
e+en *it, notice $i+en by t,e seller %s to ,is e2ercise o) t,e
ri$,t. >o*e+er0 t,e common c%rrier re)use' to 'eli+er t,e
$oo's b%c8 to t,e seller or to t,e -l%ce o) t,e -l%ce
s-eci)ie' by t,e seller0 it 'oes not necess%rily me%n t,%t
t,e common c%rrier *oul' be li%ble bec%use %not,er
re3uirement in or'er )or t,e common c%rrier to be obli$e'
to return t,e $oo's b%c8 to t,e seller un'er % cert%in
situ%tion is t,%t t,e 'ocument o) title *,ic, co+ers t,e
$oo's must be surren'ere' )irst to t,e common c%rrier.
7,is is % -rotection to common c%rriers bec%use i) $oo's
%re co+ere' by ne$oti%ble 'ocument o) title % t,ir' -erson
*,o is not t,e seller m%y ,%+e % better ri$,t o+er t,e
$oo's. 7,is is in rel%tion to t,e %lien%tion m%'e by t,e
buyer to % t,ir' -erson.
3n a scenario where the seller has possessory lien or
he -"st e,ercised his right to stoppage in transit", what
if the b"yer sold the goods to a third person, can that
third person compel the seller to delier the goods to
the b"yer$ #ill the alienation of the goods to a third
person, will the seller lose his lien$
As % rule0 t,e seller *ill not lose ,is -ossessory lien. As %n
e2ce-tion0 t,e seller *ill lose ,is lien *,en t,e seller
%ssente' to t,is %lien%tion. Secon'ly0 *,en t,e $oo's %re
co+ere' by % ne$oti%ble 'ocument o) title li8e % ne$oti%ble
bill o) l%'in$ %n' t,e buyer sol' t,is $oo's to % t,ir' -erson
in $oo' )%it, %n' )or +%lue0 *,ic, me%ns ,e ,%' no
8no*le'$e o) t,e 'e)ect on t,e title o) ,is seller. 7,ir'ly0 t,is
ne$oti%ble 'ocument o) title must ,%+e been ne$oti%te' to
t,is t,ir' -erson. Wit, t,ese0 t,e seller *oul' lose ,is lien.
7,e t,ir' -erson *ill ,%+e % better ri$,t o+er t,e $oo's. A
ne$oti%ble instrument bein$ % be%rer instrument 0 ,e c%n
e%sily ne$oti%te by 'eli+ery. E+en i) it is %n or'er
instrument0 %n' it is 'eli+er%ble to t,e or'er o) t,e buyer0
,e c%n en'orse suc, 'ocument to %not,er buyer. A$%in0
t,e un-%i' seller *ill lose t,is lien *,en %ll t,ese re3uisites
%re -resent.
3f an action for specific performance was filed instead
of ino)ing the other remedies or together with the
other remedies, in the -"dgment of the co"rt, the
-"dgment was in faor of the seller, and if the -"dgment
becomes final and e,ec"tory ordering the b"yer to pay
the price, may the seller now lose his lien, and
therefore the b"yer can demand for the deliery of the
goods to him so that he will thereafter pay the price$
No. E+en i) t,ere is suc, % .u'$ment in )%+or o) t,e seller0
,e *ill not lose ,is lien. Dust bec%use t,ere is % .u'$ment in
)%+or o) t,e seller0 t,ere is no $u%r%ntee %t %ll t,%t t,e
buyer *ill be %ble to -%y or t,e buyer *ill in )%ct -%y.
Ri$,t o) Res%le
It is re3uire' t,%t t,e seller must still ,%+e -ossessory lien
)or t,e seller to e2ercise t,e ri$,t o) res%le.
3s insolency re!"ired$
No0 but it m%y be one o) t,e scen%rios *,ere t,e seller *ill
,%+e t,e ri$,t to resell. One o) t,e $roun's )or t,e e2ercise
o) t,e ri$,t is bec%use t,e buyer ,%s been in 'e)%ult )or %n
unre%son%ble len$t, o) time. Anot,er $roun'0 is t,%t t,is
ri$,t is e2-ressly reser+e' to t,e seller0 %n' %not,er $roun'
is t,%t t,e $oo's %re -eris,%ble.
In rel%tion to t,is reme'y0 t,e l%* *oul' mention t*o
notices comin$ )rom t,e +en'or to t,e +en'ee. 7,e )irst
notice is t,e intention o) t,e +en'or to resell. 7,e secon'
notice is %s to t,e '%te0 t,e time %n' to t,e -l%ce o) t,e
res%le.
Are the notices necessary for the alidity of the resale$
7,ese notices %re not necess%ry )or t,e +%li'ity o) t,e
res%le. Its rele+%nce0 %s to t,e )irst notice -ert%inin$ to t,e
intention to resell *ill only be rele+%nt i) t,e $roun' )or t,e
res%le is bec%use t,e buyer ,%' been in 'e)%ult )or %n
unre%son%ble len$t, o) time. I) t,ere is suc, notice
es-eci%lly i) t,e notice *%s sent by % l%*yer0 it *ill be seen
*,en t,e notice *%s sent0 *,en it %s recei+e' by t,e
buyer0 t,ere)ore0 it *oul' tell t,%t t,e buyer ,%' been in
'e)%ult )or %n unre%son%ble len$t, o) time. As to t,e t*o
ot,er $roun's o) e2-ress reser+%tion %n' $oo's %re
-eris,%ble0 %s to t,e )irst notice *ill )in' not rele+%nce.
As to t,e secon' notice o) t,e '%te0 time %n' -l%ce o)
res%le. 7,is ,%s somet,in$ to 'o *,en t,e res%le *%s
'one in $oo' )%it, or not. So *,%t i) t,e s%le is in $oo' )%it,
or in b%' )%it,= W,en *oul' it be consi'ere' on $oo' )%it,
or in b%' )%it,= 7,e e))ect o) t,is0 ,%s somet,in$ to 'o
*it, t,e ri$,t to reco+er t,e 'e)iciency %)ter t,e res%le. :or
e2%m-le0 t,e un-%i' %mount or t,e tot%l cont%ct -rice o)
1!!80 but t,e net -rocee's o) t,e res%le is 9!80 ,ence t,e
'e)iciency o) 5!8. C%n t,e seller reco+er t,is 'e)iciency
)rom t,e buyer= Fes0 i) t,e s%le is % $oo's )%it, s%le. Suc,
notice is im-ort%nt bec%use i) t,e buyer *%s $i+en notice
%t t,e '%te0 time %n' -l%ce o) res%le0 ,e *oul' ,%+e been
-resent or ,e coul' ,%+e %tten'e' t,e res%le0 %n' ,e
*oul' ,%+e 8no*n i) in'ee' t,e ,i$,est bi' *%s only 9!8.
W,ere%s i) t,ere is no notice0 t,ere is % $oo' -ossibility
t,%t t,e seller m%y ,%+e e+en sol' t,e s%me -ro-erty to
,imsel). Un'er t,e l%* ,e coul' not sell t,e -ro-erty to
,imsel) 'irectly or in'irectly. >ence ,e coul' not conni+e to
% t,ir' -erson to buy t,e $oo's )or % less +%lue so ,e c%n
reco+er t,e 'e)iciency )rom t,e buyer. Suc, *oul' be % b%'
)%it, s%le0 %n' t,e seller coul' no lon$er ,%+e t,e ri$,t to
reco+er t,e 'e)iciency. ;ut i) in'ee' t,ere *%s % $oo' )%it,
s%le0 %n' t,ere *%s %ctu%l bi''in$ %n' t,ere %re -erson
*,o bi'0 but t,e ,i$,est bi''er is 9!0 t,e buyer c%n be
com-elle' to -%y t,e 'e)iciency.
#hen the net proceeds is greater than the payable
amo"nt, who is entitled to the e,cess amo"nt$
'aceda Daw (ecto Daw
Contr%ct o) S%le Contr%ct o) S%le
S%le on Inst%llment S%le on Inst%llment
1%sse' to -rotect buyers 1%sse' to -rotect buyers0
Ob.ect o) s%le is % Re%lty
)or Resi'enti%l -ur-ose
Ob.ect o) t,e s%le is %
-erson%l -ro-erty or
mo+%ble -ro-erty.
Reme'ies/
E2%ct )ul)illment
C%ncell%tion o) t,e S%le
:oreclosure o) (ort$%$e
"
Un'er t,e l%* it is t,e seller. 7,e seller s,%ll not be
res-onsible )or t,e buyer )or *,%te+er -ro)it ,e m%y obt%in
out o) t,e res%le.
3f the b"yer partially paid, b"t the seller resold it at a
price higher than the amo"nt payable, can the b"yer
demand for the amo"nt paid$
No. 7,e l%* is cle%r t,%t t,e seller s,%ll not be res-onsible
)or %ny -ro)it ,e m%y obt%in out o) t,e res%le.
3f ownership had already passed to the b"yer, in the
e,ercise of the right of resale, sho"ld the seller rescind
the first contract, or the title of the first b"yer for him
to be able to resell$
No nee' )or rescission bec%use t,e e))ect o) t,e res%le
*oul' termin%te t,e o*ners,i- o) t,e )irst buyer by
o-er%tion o) l%*. Suc, o*ners,i- c%n be +este' u-on t,e
secon' buyer u-on t,e 'eli+ery o) t,e $oo's to t,e secon'
buyer.
Rescission
#hat are the gro"nds for rescission$
1. 7,e buyer ,%s been in 'e)%ult )or %n unre%son%ble
len$t, o) time
. 7,e ri$,t is e2-ressly reser+e' to t,e sellerC
Recto L%*
I) t,e buyer )%ils to -%y or more inst%llments reme'ies %re
-ro+i'e' to t,e seller. In t,e )irst -l%ce0 t,e Recto L%* is
consi'ere' rel%te' to t,e (%ce'% L%*0 t,%tHs *,y t,e
e2%miner mi$,t re3uire you to 'istin$uis, one )rom t,e
ot,er0 ,ence/
7,e Recto l%* is consi'ere' %s % -rotection to buyers
'es-ite t,e )%ct t,%t t,e l%* $i+es t,e seller reme'ies0 %n'
not to buyers. In t,e sense t,%t t,ese reme'ies %re
%ltern%ti+e in c,%r%cter0 it is me%nt to -rotect buyers
bec%use once t,e seller in+o8e %ny o) t,ese reme'ies0 ,e
c%n no lon$er in+o8e t,e ot,er reme'ies.
%ale of a specific car worth 5 million, payable in 1+
e!"al ann"al payments. 1he b"yer failed to pay the
third installment. Can the seller ino)e any of the three
remedies$
No0 bec%use only one inst%llment *%s un-%i'. :or t,e t*o
ot,er reme'ies to be %+%il%ble to t,e seller0 t,e buyer must
,%+e )%ile' to -%y t*o or more inst%llments. I) t,ere is only
one inst%llment le)t un-%i'0 t,e only reme'y by t,e seller is
e2%ct )ul)illment.
&espite demand, the b"yer failed to pay the third
installment, within a month the seller filed an action to
recoer a s"m of money. 3n this action how m"ch will
be recoered by the seller$
Since t,e buyer *%s %ble to -%y only inst%llments
e3ui+%lent to 1 million0 t,ere)ore t,ere is yet % b%l%nce o) 5
million0 t,e seller c%nnot reco+er t,e *,ole 5 million. W,%t
t,e seller c%n reco+er is only t,e 'ue %mount le)t un-%i'0
*,ic, is t,e t,ir' inst%llment in t,e %mount o) 6!!
t,ous%n'.
3s it possible for the seller to recoer the entire
balance$
Fes0 i) t,ere is % cl%use in t,e contr%ct o) s%le 8no*n %s %n
%cceler%tion cl%use st%tin$ t,%t e+en i) t,e buyer only )%ile'
to -%y only one inst%llment0 t,e entire b%l%nce *ill become
'ue %n' 'em%n'%ble.
Assumin$ t,e buyer )%ile' to -%y t,e t,ir' inst%llment %n'
t,e <t, inst%llment0 m%y t,e seller in+o8e %ny o) t,e t,ree
reme'ies=
No. I) t,e seller 'e)%ulte' on t,e t,ir' %n' on t,e <t,
inst%llment0 t,e -remise ,ere is t,%t t,e seller *%s %ble to
-%y t,e t,ir'0 )ourt,0 )i)t, %n' t,e si2t, inst%llment. Since ,e
'e)%ulte' on t,e <t,0 t,ere is only one un-%i' inst%llment.
7,e l%* re3uires t,%t t,e buyer must ,%+e )%ile' to -%y t*o
or more inst%llments (consecuti+e inst%llments#. 7,e l%*
'i' not mention t,%t t,e buyer )%ile' to -%y t*ice.
3n a scenario, b"yer failed to pay seeral installments,
s"ch as the third and the 4th$ 'ay the seller ino)e
any of the three remedies$
Fes.
3f the seller in the aboe scenario chose cancellation of
the sale, with cancellation of the sale, what is the effect
as to the right and obligation of the parties$
4!
Since t,is is % )orm o) rescission0 t,e e))ect *oul' be
mutu%l restitution. 7,e buyer *ill ,%+e to return t,e c%r to
t,e seller0 %n' *it, mutu%l restitution t,e seller *oul'
norm%lly return %ll t,e %mounts -%i'0 but un'er t,is l%*0 t,e
seller is not re3uire' to return %ll t,e %mounts -%i'. 7,e l%*
%llo*s t,e seller to ret%in % re%son%ble %mount *,ic, *ill
be consi'ere' %s com-ens%tion )or t,e use o) t,e t,in$.
'ay the seller retain all the amo"nts paid by the
b"yer$
Fes0 i) t,ere is % )or)eiture cl%use. 7,is is one bi$ 'i))erence
in t,e (%ce'% L%*. In t,e (%ce'% L%*0 )or)eiture cl%use is
+oi'.
2en if there is a forfeit"re cla"se, is it possible that
the seller, may not hae the right to retain all the
amo"nts paid$
Fes0 i) to 'o so *oul' be consi'ere' %s unconscion%ble.
7o 'etermine i) it is unconscion%ble *oul' 'e-en' on t,e
circumst%nces o) t,e c%se or o) t,e s%le %n' t,e %mount
in+ol+e %n' t,e -%rties.
1o sec"re the f"lfillment of the b"yers obligation on
the car sold, the b"yer mortgage his bl"e diamond.
1hereafter the b"yer failed to pay the third and the
fo"rth installments. 1he seller can now ino)e any of
these remedies, b"t when the seller ino)e foreclos"re
of the mortgage and the net proceeds of the
foreclos"re sale is less than the balance, hence there
is deficiency, can the seller recoer the deficiency from
the b"yer$
Fes0 bec%use t,e Recto L%* 'oes not %--ly to t,is
scen%rio bec%use t,e t,in$ bou$,t *%s not t,e s%me t,in$
*,ic, *%s mort$%$e'. :or t,e Recto L%* to %--ly0 *,%t is
bou$,t0 is t,e s%me t,in$ *,ic, is mort$%$e'.
A bo"ght a tr"c) from B payable in installment sec"red
by a chattel mortgage e,ec"ted by A on the tr"c). As
additional sec"rity A8s brother C, e,ec"ted a real estate
mortgage in faor of B. A defa"lted in the payment of
seeral installments. Conse!"ently B filed an action
for replein, repossessed the tr"c) and foreclosed the
chattel mortgage. Can B proceed the other properties
of A and the real estate mortgage e,ec"ted by C, to
recoer the deficiency if any after the chattel mortgage
foreclos"re sale$
No. ; c%nnot -rocce' %$%inst t,e ot,er -ro-erties bec%use
un'er t,e Recto L%*0 since un'er t,e )%cts t,e s%le is
co+ere' bein$ % s%le o) % mo+%ble on inst%llment0 *oul'
not %llo* t,e reco+ery o) t,e 'e)iciencies o) )oreclosure.
Koin$ %)ter t,e ot,er -ro-erties is % )orm o) reco+ery o)
'e)iciency.
In t,e s%me m%nner0 t,e )oreclosure o) t,e re%l est%te
mort$%$e is %lso % )orm o) reco+ery o) t,e 'e)iciency0
bec%use t,e re%l est%te -ro-erty *ill be sol' %n' t,e net
-rocee's *ill be %--lie' to t,e in'ebte'ness *,ic, is
-ro,ibite' un'er t,e Recto L%*.
(o'es o) E2tin$uis,ment o) S%le
1. C%ncell%tion o) S%le o) -erson%l -ro-erty -%y%ble in
inst%llment (Art. 15E5#.
. Return o) $oo's by t,e buyer to t,e seller in S%le or
Return or S%le on 7ri%l (Art. 16!#.
4. Seller sto--in$ t,e $oo's in tr%nsit (Art. 164#.
5. Un-%i' seller resellin$ t,e $oo's (Art. 1644#.
6. Un-%i' seller rescin'in$ t,e contr%ct o) s%le (Art. 1645#
9. Rescission o) s%le *,en t,e t,in$ 'eli+ere' *%s l%c8in$
in %re% or o) in)erior 3u%lity.
<. Rescission o) s%le *,en t,ere is % bre%c, o) *%rr%ntyC
E. Rescission o) t,e s%le o) %nim%ls *it, re',ibitory 'e)ectC
". 1%yment
1!. No+%tion
11. Loss o) t,e t,in$
1. Res%le
#hat is the e,tra special mode of e,ting"ishment of
sale$
Re'em-tion eit,er con+ention%l or le$%l.
#hat are the )inds of redemption$
1. Con+ention%l - 7,ere is ri$,t to re-urc,%se e2-ressly
reser+e' in t,e contr%ct %n' t,is ri$,t m%y only %rise in 1
8in' o) contr%ct. 7,is is % s%le *it, % ri$,t to re-urc,%se
or -%cto 'e retro s%le.
. Le$%l - 7,ose *,ic, m%y be e2ercise' by co-o*ners or
by o*ners o) %'.%cent lots.
Con+ention%l
I) t,ere *%s no sti-ul%tion %s to t,e ri$,t o) re'em-tion t,en
no ri$,t o) re'em-tion.
3n the e,ercise of this right, how m"ch wo"ld hae to
be offered by the seller a retro in order to redeem the
property$ #o"ld the price paid by the b"yer be
s"fficient in order to rep"rchase the same$
Not necess%rily. Un'er t,e l%*0 t,e %mount *,ic, ,%s to be
o))ere' by t,e seller % retro (+en'or# in t,e e2ercise o) t,e
ri$,t o) re'em-tion %re/ 1# -rice -%i'C # t,e e2-enses
incurre' by t,e +en'ee (buyer % retro# )or t,e e2ecution o)
41
t,e contr%ct 4# necess%ry %n' use)ul e2-enses incurre' by
t,e buyer (buyer % retro#.
:ruits %t t,e time o) s%le
3n a mango plantation, there may be fr"its at the time
of redemption.1he al"e of the fr"its is 1++). Can the
seller (b"yer a retro) be compelled to pay for the al"e
of the fr"its$
It *ill 'e-en' on *,et,er t,ere %re )ruits %t t,e time o) t,e
s%le. I) t,ere *ere )ruits %t t,e time o) t,e s%le0 t,e seller
(seller % retro# *ill only be obli$e' to -%y t,e )ruits %t t,e
time o) re'em-tion i) %t t,e time o) t,e s%le0 t,e buyer
(buyer % retro# -%i' )or t,e -rice o) t,e +%lue o) t,e )ruits.
;ut i) %t t,e time o) t,e s%le0 t,ere *ere )ruits but t,e buyer
(buyer % retro# 'i' not -%y )or t,e +%lue o) t,e )ruits0 t,en
t,e seller s,oul' not li8e*ise be com-elle' to -%y )or t,e
+%lue o) t,e )ruits %t t,e time o) re'em-tion.
No )ruits %t t,e time o) s%le0 but t,ere %re )ruits %t t,e time
o) re'em-tion
3f a C4% was entered into in Gan"ary *++1 and there
were no fr"its at the time of the sale. /oweer, at the
time of redemption in April 1, *++5 there were fr"its.
1he al"e of which is 1++). /ow m"ch can the seller be
compelled to pay fro these fr"its$
Un'er t,e l%* t,e seller (seller % retro# c%n be com-elle' to
-%y )or t,e +%lue o) t,e )ruits $i+in$ t,e buyer (buyer %
retro# t,e -%rt corres-on'in$ to t,e time ,e -ossesse' t,e
l%n' in t,e l%st ye%r0 counte' )rom t,e %nni+ers%ry o) t,e
'%te o) t,e s%le.
Un'er t,e )%cts0 t,e %nni+ers%ry '%te is e+ery D%nu%ry 1st.
7,e %nni+ers%ry '%te (t,e l%st ye%r# is D%nu%ry 10 !!6.
:rom D%nu%ry 10 !!6 to A-ril 10 !!60 t,e buyer *%s
%lre%'y in -ossession )or 4 mont,s out o) 1 mos. o) t,e
entire ye%r0 me%nin$ it is 1J5 o) t,e entire ye%r. 7,ere)ore
t,e buyer % retro (seller# is com-elle' to -%y 1J5 o) t,e o)
t,e 1!!8 +%lue o) t,e )ruits *,ic, is 60!!!.
1erio' o) Con+ention%l Re'em-tion
A sold a land to B for 1+) with a right to rep"rchase
e,pressly agreed "pon between the parties. Beca"se
they were friends, they did not proide for a period
within which the seller may e,ercise the right to
rep"rchase. B"t again, there was a reseration of the
right to rep"rchase, b"t the parties failed to fi, the
period.
%. #hen sho"ld the seller a retro e,ercise the right to
rep"rchase$
b. 3f the seller failed to rep"rchase within the period
agreed "pon or the period prescribed by law, what
will be yo"r adice to the b"yer in order to protect
the b"yer more$
%. 7,e -erio' is 5 ye%rs. Un'er t,e l%*0 i) t,ere is % ri$,t o)
re'em-tion but t,e -%rties )%ile' to -ro+i'e )or suc, %
-erio'0 t,e l%* itsel) s%ys t,%t t,e ri$,t m%y be e2ercise'
only *it,in 5 ye%rs. >o*e+er0 i) t,e -%rties sti-ul%te' %s
to t,e -erio' *it,in *,ic, t,e ri$,t m%y be e2ercise'0 t,e
l%* -ro+i'es t,%t suc, c%nnot e2cee' 1! ye%rs0 %n' i) it
e2cee's 1! ye%rs0 t,e s%me *ill be re'uce'.
b. 7o )ile %n %ction )or t,e consoli'%tion o) title.
3n a sale with right to rep"rchase, ownership passes
"pon the e,piration of the right to rep"rchase$
No0 o*ners,i- -%sses to t,e buyer u-on 'eli+ery. 7,e
im-lic%tion ,o*e+er o) t,e e2-ir%tion to t,e ri$,t to
re-urc,%se0 is t,%t o*ners,i- by t,e buyer becomes
%bsolute.
#hat will be the effect of the e,piration of the period to
rep"rchase witho"t the seller e,ercising s"ch right$ 4r
een if he did e,ercise, it was not a alid e,ercise of a
right$ 3n the aboe scenarios, what is the effect on the
ownership of the b"yer$
;uyers ri$,t o) o*ners,i- o+er t,e t,in$ becomes %bsolute.
Durin$ t,e -erio' ,e ,%s o*ners,i-0 but t,is o*ners,i- is
sub.ect to % resolutory con'ition *,ic, is t,e +%li' e2ercise
o) t,e ri$,t to re-urc,%se. An' u-on re-urc,%se0 o*ners,i-
by t,e buyer (buyer % retro# s,%ll be termin%te'.
Apon the lapse of the period witho"t the seller haing
e,ercised his right to rep"rchase the ownership of the
b"yer becomes absol"te regardless of whether the
s"b-ect of the sale is an immoable or a moable
property$
Fes0 o*ners,i- becomes %bsolute0 %n' it 'oes not m%tter
*,et,er t,e ob.ect o) s%le is %n immo+%ble or % -erson%l
-ro-erty.
3s an action for consolidation of title re!"ired in order
that the b"yer ac!"ire ownership oer the ob-ect of the
sale or at lease ac!"ire absol"te ownership$
No. 7,is %ction is only necess%ry i) ,e *oul' *%nt t,e
-ro-erty to be re$istere' in ,is n%me. 7,is %ction is in
or'er to -rotect t,e buyer so t,%t t,e seller c%nnot sell t,e
-ro-erty to %not,er -erson.
Ass"ming yo" are a lawyer, a client as)ed yo" to
e,amine a doc"ment which is denominated as a
&4% with a right to rep"rchase and that client was
t h e b " y e r a r e t r o ( b " y e r ) . / o w e e
r, " p o n e,amination of the terms and conditions
of the contract, it appears that the right has long
e,pired. 1h"s, the client as)ed, may 3 still be able to
recoer this parcel of land which is the s"b-ect
matter of this contract$
4
Consi'er t,e -ossibility t,%t t,e client m%y reco+er. As8
t,e client o) t,e circumst%nces surroun'in$ t,e
e2ecution o) t,%t 'ocument. As8 ,im @W,y 'i' you
e2ecute t,is DOS=A I) t,e %ns*er is @8%si -o %tty. n%$8%
ut%n$ %8o s% 8%ny% 16!8 t%-os s%bi ny% inste%' o)
e2ecutin$ % mort$%$e %$reement0 DOS *it, % ri$,t to
re-urc,%seA. Any*%y0 )rom t,e DOS *it, % ri$,t to
re-urc,%se0 ,e m%y %--e%r to be -rotecte'. B%si i) ,e
o*es t,%t -erson 1( %n' i) ,e is $i+en in t,e 'ebt %
-erio' o) 1 ye%r *it,in *,ic, to -%y in t,e DOS *it, %
ri$,t to re-urc,%se0 ,e *oul' %lso ,%+e 1 ye%r *it,in
*,ic, to re-urc,%se. Dib% -%r%n$ -%re,o l%n$= ;ut
inste%' o) mort$%$e ,e *%s %s8e' to si$n % DOS. I) t,%t
is t,e c%se0 cle%rly you c%n conclu'e t,%t t,is is not %n
,onest to $oo'ness s%le *it, % ri$,t to re-urc,%se. Fou
c%n tre%t this transaction merely as an equitable
mortgage. >ence0 ,e m%y still be %ble to reco+er *,%t
*%s t,e sub.ect m%tter o) t,%t tr%ns%ction.
#hy wo"ld the creditor (b"yer) as) his debtor
(seller) to sign a &4% with a right to rep"rchase
instead of a mortgage to sec"re the f"lfillment of his
obligation$
7o ensure t,%t t,e -ro-erty *ill be o*ne' by ,im
%utom%tic%lly u-on t,e e2-ir%tion o) t,e -erio' *it,in
*,ic, to re-urc,%se %n' t,e seller % retro )%ile' to
e2ercise t,e ri$,t to re-urc,%se *,ic, *ill not ,%--en in
% mort$%$e. 7,ere is % -rinci-le in mort$%$e 8no*n %s
-%ctum commissorium. U-on t,e 'e)%ult o) t,e 'ebtor
t,e mort$%$ee0 c%nnot +%li'ly %--ro-ri%te t,e t,in$ )or
,imsel). O*ners,i- *ill not %utom%tic%lly -%ss by mere
'e)%ult o) t,e -rinci-%l 'ebtor bec%use -%ctum
commissorium is +oi' bec%use t,e reme'y o) t,e
cre'itor is to ,%+e t,e -ro-erty sol' in % )oreclosure s%le
not to %--ro-ri%te t,e t,in$. So to %+oi' t,ose
re3uirements s% mort$%$e0 %n$ $%$%*in n$ sellerJ
cre'itor is to ,%+e t,e 'ebtor si$n % DOS *it, % ri$,t to
re-urc,%se bec%use t,e moment t,e 'ebtor )%ile' to
re-urc,%se *it,in t,e -erio'0 %bsolute o*ners,i- $oes
to t,e cre'itor *,o is in t,%t s%le t,e buyer (cre'itor# %
retro. W%l% n% sy%n$ 8%il%n$%n $%*in.
I) t,e instrument is % DOS *it, % ri$,t to re-urc,%se it
m%y %ctu%lly be consi'ere' %s %n e3uit%ble mort$%$e
by .ust e2%minin$ t,e terms %n' con'itions o) t,%t
contr%ct. 7,ere %re cert%in inst%nces *,en t,e l%* itsel)
-ro+i'es )or % -resum-tion t,%t t,is is %n e3uit%ble
mort$%$e un'er 19!.
#hat are those instances where a &4% may act"ally
be disp"tably pres"med to be as an e!"itable
mortgage$
1. 7,e -rice is $rossly in%'e3u%te.
. I) t,e +en'or % retro *oul' continue to be in t,e
-ossession o) t,e t,in$ %)ter t,e s%le0 *,ic, is
unusu%l bec%use i) in'ee' t,is is % s%le t,en
t,e +en'ee s,oul' be in -ossession %)ter t,e
s%le.
Are these pres"mptions concl"sie$
No0 t,is is merely % 'is-ut%ble -resum-tion. In )%ct0 t,e
SC *oul' sust%in t,e +%li'ity o) % s%le *it, % ri$,t to
re-urc,%se 'es-ite t,e $ross in%'e3u%cy o) -rice
bec%use some,o* it *oul' be %'+%nt%$eous to t,e
seller % retro. In t,e e2ercise o) t,e ri$,t to re-urc,%se0
it is more %'+%nt%$eous i) t,e -rice is sm%ll bec%use ,e
c%n e%sily come u- *it, t,%t %mount %n' re-urc,%se
t,e t,in$.
#hat if there was a stip"lation in the C4% that the
seller will sho"lder the capital gains ta,$ #o"ld the
pres"mption that this is an e!"itable mortgage will
arise$
No0 t,e -resum-tion *ill only %rise i) t,e seller boun'
,imsel) to -%y t,e t%2 on t,e t,in$ not t,e c%-it%l $%ins
t%2. 7,%t *oul' be t,e re%l -ro-erty t%2.
Bote9 1resum-tions un'er 19! *oul' %rise re$%r'less
o) *,et,er t,e s%le is 'enomin%te' %s % s%le *it, % ri$,t
to re-urc,%se or % DOS. It 'oesnHt m%tter. E+en i) it is %
DOS i) t,ere is 'oubt %s to *,et,er or not it is %n
e3uit%ble mort$%$e. It ,%s to be resol+e' %s %n
e3uit%ble mort$%$e.
#hat is the remedy of the seller a retro$
Re)orm%tion bec%use t,e contr%ct %s *ritten 'i' not
re)lect t,e re%l intention o) t,e -%rties. 7,e re%l intention
is to secure t,e )ul)illment o) t,e obli$%tion o) t,e +en'or
% retro ('ebtor#.
B. Degal (edemption
#ho has the right to redeem$
A/ $rou-s
1. Co-o*ners
. O*ners o) %'.%cent lots (ob.ect is lot#
- consi'er i) rur%l or urb%n l%n'
Co-o*ners
Co<owners of what thing, moable or immoable$
It 'oes not m%tter.
A, B, C, & co<owners of land. & donated his interest
in the land to :. wo"ld A, B, C, hae the right to
redeem$
No0 in le$%l re'em-tion0 the alienation by a co-
owner must be by onerous title (s%le0 '%cion en
-%$o0 b%rter#. 7,is %ct ('on%tion# is $r%tuitous %ct.
>ence0 no
ri$,t o) re'em-tion.
44
#hat if B sold his interest in the land to &. wo"ld A
and C hae the right to redeem$
No0 bec%use )or A %n' C to ,%+e t,e ri$,t to re''em0
the alienation should be in favor of a 3
rd


person.
#hat if B sold his interest in the land to :. A, &, C,
wanted to redeem. 'ay they be able to e,ercise the
right of redemption$ All of them$
Fes. All o)
t,em.
3s this the same r"le in ad-acent lots$
No0 in %'.%cent lots0 t,ere c%n be so m%ny o*ners
'e-en'in$ on ,o* it is bi$. The owner with the
smallest land area would have the right to redeem.
#hat if the owners of ad-acent lots wo"ld hae
e!"al area$
7,e )irst one *,o m%ni)este' ,is 'esire to re'eem.
As to Co - o*ners
Dand owned by spo"ses was sold by them to their
three sons in E different deeds of sale. 3n each &4%
the specific area was already described. After the
e,ec"tion of the &4%, these children wo"ld act"ally
harest only their respectie area. 1hey wanted to
hae their respectie share registered in their own
name. 1hey filed a petition for the cancellation of
the title of their parents for that property to be
diided, they s"bmitted their indiid"al &4%. B"t
the petition was denied by the register of &eeds
beca"se they failed to s"bmit a s"bdiision plan.
1he (& cancelled the 1C1 in the name of the
parents iss"ed another 1C1 in the name of the E
children in one 1C1. 4ne of the children sold the
land to a E
rd
person. Can the * other brothers
redeem as co<owners$
No0 bec%use un'er t,e )%cts0 t,ey %re no lon$er co-
o*ners bec%use be)ore ,%n' t,eir -%rents sol' to t,em
t,e -ro-erty in t,ree se-%r%te 'ee's o) s%le. Alt,ou$, %
sin$le 7C7 *%s issue' to t,em0 is not conclusi+e %s to
t,e ri$,ts o) t,e -%rties to % cert%in -ro-erty suc, %s in
t,e c%se %s co-o*ners. At its )%ce t,ey %re co-o*ners
but in re%lity t,ere ,%s %lre%'y been % -%rtition o) t,e
-ro-erty. In )%ct0 % -ro-erty m%y be re$istere' in %
-erson *,o is not t,e o*ner bec%use somebo'y )or$e'
t,e si$n%ture o) t,e re%l o*ner. 7,us0 t,e re3uirement o)
t,e l%* t,%t t,e co-o*ner *oul' ,%+e t,e ri$,t to
re'eem is not -resent t,ere)ore0 t,ere *oul' be no ri$,t
o) re'em-tion.
A, B, C co<owners. A8s share M. B8s share M. C8s
share N. B sold his interest in the land to :.
/oweer, A and C both wanted to redeem. (As co<
owners they may hae the right to redeem). 3f they
cannot agree on the portion of the share of B which
will be redeemed by both of them < what wo"ld be
the final sharing$
C *ill ,%+e J40 A *ill ,%+e 1J4 bec%use t,ey *ill ,%+e
t,e ri$,t to re'eem in -ro-ortion to t,eir s,%re in t,%t
-ro-erty. Note/ t,ey m%y sti-ul%te %s to t,e s,%rin$.
#hat if in the &4% e,ec"ted between B and :, the
price stated in &4% was E'. /ence, A and C can be
compelled to redeem by paying E'$
Not necess%rily0 un'er t,e l%*0 i) t,e -rice st%te' in t,is
s%le is unconscion%ble0 t,e re'em-tioners c%n only be
com-elle' to -%y t,e re%son%ble +%lue. An$ -osiblen$
+%lue coul' only be 1( -ero %n$ n%8%l%$%y s% DOS
4(. Is it possible that X did not pay 3M? Fes. hy
would they do that? 7,e re%son )or t,%t is to -re-em-t
A %n' C )rom e2ercisin$ t,e ri$,t o) re'em-tion. 7o
'iscour%$e t,em )rom re'eemin$ t,e -ro-erty 8%si 8un$
mur% y%n t,ey c%n e%sily e2ercise t,e ri$,t o)
re'em-tion.
7,e l%* -rotects t,e re'em-tioners - i) t,e -rice is
unconscion%ble - t,ey m%y -%y re%son%ble +%lue.
#hat if the al"e is E' b"t &4% stated 1' b"t :
act"ally paid E' (1' was stated to red"ce ta,
liability). /ow m"ch can A and C be compelled to
pay$
(oromal vs )A
>el'/ 7,e co-o*ners c%n only be com-elle' to -%y t,e
-rice st%te' in t,e 'ee' o) s%le. 7,e tri%l court sust%ine'
t,e cl%im o) t,e buyer t,%t t,ey be reimburse' t,e
%ctu%l %mount -%i' bec%use %ccor'in$ to t,e tri%l court
t,%t *oul' be immor%l to -%y only t,e %mount st%te' in
t,e contr%ct. SC s%i' it *%s more immor%l *,en t,e
-%rties -%y only % sm%ll %mount *,ere in )%ct t,e re%l
%mount -%i' is % muc, ,i$,er %mount. ;ec%use t,e
only -ur-ose o) t,is is to 'e)r%u' t,e $o+ernment.
4wners of Ad-acent Dots
(%8e % 'istinction bet*een % s%le o) %n urb%n l%n' %n'
s%le o) rur%l l%n'.
S%le o) Urb%n l%n'
Re3uisites/
1. 7,e l%n' is so sm%ll %n' -urc,%se' only )or
s-ecul%tion
I) t,%t is t,e c%se0 t,en t,e %'.%cent lot o*ners
*oul' ,%+e t,e ri$,t not only o) t,e ri$,t o) re'em-tion
but %lso o) ri$,t o) -re-em-tion. (Article 19#
In rur%l t,ere is no ri$,t o) -re-em-tion me%nin$
e+en be)ore t,e -er)ection o) t,e s%le0 t,e %'.%cent lot
o*ners *oul' %lre%'y ,%+e t,e ri$,t to re'eem by *%y
45
o) -re-em-tion0 4! '%ys )rom notice o) suc, intention to
sell.
;ut in rur%l l%n's %n' %lien%tion is by onerous title.
Anot,er re3uisite/ t,e l%n' *,ic, *%s t,e ob.ect t,e
s%le must not be $re%ter t,%n 1 ,ect%re.
Also0 )or t,e o*ners to ,%+e t,e ri$,t o) re'em-tion0
t,e buyer )rom *,om t,e -ro-erty *ill be re'eeme'
must ,%+e %not,er rur%l l%n'.
Anot,er re3uisite - t,e l%n' sol' %n' t,e l%n' o)
re'em-tioner must not be se-%r%te' by broo8s0 ri+ers in
or'er t,%t t,ese lot o*ners *oul' ,%+e t,e ri$,t to
re'eem.
!"# $isters % and ! co-owners of land. ! sold her
interest in the land to X a 3
rd
person. X sent a notice
to the sister of the seller& the other co-owner
informing her of such sale and giving her copy of
the '($. 'espite notice& % did nothing. %fter that& X
requested for the annotation of the sale in the title
of that property in the )'. )' sent another notice to
%. % did not do anything. %fter so many months& X
wanted the property to be partitioned. % then give
notice to X that she is e*ercising the right to
redeem. 'oes % have the right to redeem? )ight of
redemption must be e*ercise within 3+ days from
what?
A/ 7,e co-o*ner still ,%s t,e ri$,t to re'eem. Un'er
1940 t,e 4!-'%y -erio' *oul' st%rt to run only )rom t,e
time t,e co-o*ner recei+e' )rom t,e +en'or. $ino
nagbigay ng notice from the facts? Un%0 yun$
+en'ee -%n$%l%*% yun$ RD. so ,in'i yun$ +en'or %m'
n%$bi$%y. So 4!-'%y -erio' ,%s not st%rte' to run.
>ence0 ,e still ,%s t,e ri$,t to re'eem.
Atty. Aribe9 Un'er t,e )%cts0 s,e recei+e' notices0 not
only *ritten notices but %lso co-ies o) t,e DOS. Un'er
t,e -rinci-le o) esto--el0 s,e c%nnot cl%im t,%t s,e still
,%s 4! '%ys. In )%ct0 in % 'ecision o) SC in+ol+in$ % s%le
o) % co-o*ner s,%re *,ic, s%le *%s )%cilit%te' by t,e
ot,er co-o*ner. ;ut t,e l%tter cl%ime' ,e c%n still
re'eem bec%use ,e 'i' not recei+e notice. SC s%i' sy%
%n$ n%$-)%cilit%te n$ s%le so *,y ,e coul' not be $i+en
notice0 ,ence ,e ,%' 8no*le'$e o) t,e s%le. 7,is is still
consistent in t,e c%se o) Dorom%l. I) you consi'er t,e
-ro+ision liter%lly it s%ys @4! '%ys )rom t,e time o) notice
in *ritin$ is $i+en by t,e +en'or to t,e co-o*nerA. An$
n%8%l%$%y s% b%t%s0 notice in *ritin$. ,ence&
apparently even a letter written by the vendor would
suffice and hence the 3+ day period would start to
run? SC s%i'/ No0 t,e co-o*ner s,oul' be $i+en % co-y
o) t,e DOS %n' it is only )rom t,%t moment t,%t t,e 4!-
'%y -erio' *ill st%rt to run. 7,is is % $oo' rulin$ - not
%ny or'in%ry notice but % co-y o) t,e DOS bec%use in
re'em-tion0 t,e re'em-tioner is su--ose' to be
subro$%te' un'er t,e s%me terms %n' con'itions %s t,e
buyer. >o* *oul' ,e 8no* t,e terms %n' con'itions o)
t,e s%le i) ,e is not $i+en % co-y o) t,e DOS. So ,e
must ,%+e % co-y.
Double S%les
3f the same thing sho"ld hae been sold to different
endees, to whom shall ownership be transferred$ 3s it
possible that ownership hae been transferred to both
b"yers$
It is -ossible t,%t bot, buyers m%y ,%+e %c3uire'
o*ners,i- but only one o) t,em *oul' ,%+e % better ri$,t.
7,e re%l 3uestion in 'ouble s%les is *,o ,%s t,e better
ri$,t.
#hat is the r"le when there is a sale of a moable
property to two or more persons, who has a better
right$
7,e )irst -erson *,o too8 -ossession in $oo' )%it,. I) no
one too8 -ossession o) t,e mo+%ble0 it is t,e buyer *,o
,%s t,e ol'est title0 %n' in $oo' )%it,.
#hat is the r"le when there is a sale of an immoable
to two or more persons, who has a better right$
1. 7,e )irst *,o re$istere' t,e 'ee' o) s%le in $oo' )%it,C
. 7,e )irst *,o too8 -ossession in $oo' )%it,
4. 7,e buyer *,o ,%s t,e ol'est title in $oo' )%it,.
GF, owner of a parcel of land sold it to 66. B"t the land
was not registered, one year later, GF sold the same
parcel of land to ((, who s"cceeded to register the
deed and to obtain a 1C1 oer the property in his own
name. #ho has the better right oer the parcel of land$
RR m%y ,%+e % better ri$,t0 *,en RR re$istere' t,e s%le in
$oo' )%it,. Un'er t,e )%cts0 RR *%s %ble to re$ister t,e
'ee' in ,is o*n n%me0 t,ere *%s no mention t,%t ,e ,%'
no 8no*le'$e o) t,e -rior s%le %t t,e time o) re$istr%tion.
/ow to determine good faith between first and second
b"yer$
As to t,e )irst buyer0 it is t,e )%ct t,%t ,e ,%s no 8no*le'$e
o) t,e 'e)ect on t,e title o) t,e seller.
As to t,e secon' buyer0 it is t,e )%ct t,%t ,e ,%s no
8no*le'$e o) t,e title o) t,e )irst buyer.
G"ne 15, 1KK5, Ges"s sold a parcel of land to Gaime. 4n
G"ne E+ 1KK5, he sold the same land to Gose. #ho has
the better right if the first sale is registered ahead of
the second sale, with )nowledge of the latter and the
second sale was registered ahead of the first sale with
)nowledge of the latter$
As to t,e )irst s%le0 )irst s%le *%s re$istere' %,e%' o) t,e
secon' e+en *it, 8no*le'$e o) t,e secon' s%le0 t,e
re$istr%tion is +%li'. E+en t,ou$, t,e )irst buyer %c3uire'
8no*le'$e o) t,e secon' s%le0 ,e m%y re$ister t,e 'ee' o)
46
s%le %)ter t,e secon' s%le. Since ,e *%s t,e )irst buyer
*,o re$istere' t,e s%le0 8no*in$ t,e secon' s%le 'oes not
m%8e t,e )irst buyer % buyer in b%' )%it,.
As to t,e secon' s%le0 t,ou$, t,e 'ee' o) s%le *%s
re$istere' )irst0 but *it, 8no*le'$e o) t,e )irst s%le0 t,en
t,e re$istr%tion *%s in b%' )%it,.
3f the second b"yer had no )nowledge of the prior sale
when he signed the deed of sale, b"t when he is abo"t
to register the deed of sale, he ac!"ired )nowledge of
the first sale, wo"ld that ma)e him a b"yer in bad
faith$
W,%t is re3uire' un'er Art. 1655 is re$istr%tion in $oo'
)%it,. At t,e time o) -er)ection0 si$nin$ or -%yment0 ,e m%y
still ,%+e no 8no*le'$e o) t,e -rior s%le but %t t,e time o)
re$istr%tion ,e m%y %lre%'y ,%+e 8no*le'$e0 ,ence0 ,e
c%nnot be consi'ere' % re$istr%nt in $oo' )%it,. >e m%y not
,%+e % better ri$,t o+er t,e )irst buyer.
;%utist% +s. Sioson
1he owner sold a registered parcel of land to B who
did not register, neither did he too) physical
possession. After the sale they e,ec"ted a lease
agreement in which the b"yer is now the lessor and
that the seller became the lessee. /ence, the seller
contin"ed to be in possession of the land not as a
concept of an owner b"t of a lessee. After the sale and
the contract of lease, A sold this parcel of land to C,
who also did not register the same, and this time C
too) physical possession. #ho between B and C had a
better right$
; *oul' ,%+e % better ri$,t bec%use *,en ; e2ecute' %
le%se contr%ct *it, A0 ; is in contem-l%tion o) l%* in
-ossession o) t,e -ro-erty0 *,ic, is le$%l -ossession0 ,e
ob+iously is t,ere)ore % -ossessor in $oo' )%it,0 t,e )irst
*,o too8 -ossession in $oo' )%it,. 7,ou$, C ,%' -,ysic%l
-ossession o+er t,e -ro-erty0 ,e is consi'ere' to be t,e
one secon' in -ossession. ; t,ere)ore *%s consi'ere' to
,%+e % better ri$,t.
Note/ Le$%l -ossession is su))icient to 'etermine %s to *,o
,%+e % better ri$,t bet*een t*o -ersons.
C%rumb% +s. CA
%ale of a parcel of land to B who too) possession of
the land. /oweer, this seller a -"dgment debtor to one
of his creditor. Beca"se of a -"dgment in faor of a
creditor C, the parcel of land had become the s"b-ect
of an e,ec"tion sale. 1hen the b"yer became C who
registered the sale. #ho will hae a better right
between B and C and C had no )nowledge of the first
sale$
; *oul' ,%+e % better ri$,t bec%use t,is -%rcel o) l%n' *%s
re$istere' un'er t,e 7orrens System. Art.1655 'oes not
%--ly to unre$istere' l%n's. Only t,ose l%n's *,ic, %re
re$istere' un'er t,e 7orrens System c%n be co+ere' by t,e
-ro+isions o) Art. 1655.
It coul' be notice' t,%t C ,%' re$istere' t,e l%n'0 but t,e
s%me is not co+ere' un'er t,e torrens system bec%use0
t,ere is %not,er system o) re$istr%tion o) unre$istere'
l%n's. 7,ere is % 'i))erent boo8 co+ere' by t,is 8in' o)
re$istr%tion0 ,ence0 Art 1655 *oul' not %--ly.
7,ere)ore0 i) ARt. 1655 *oul' not %--ly0 ; *oul' ,%+e %
better ri$,t bec%use t,ere *%s %ctu%l 'eli+ery to ,im.
7,er)ore0 un'er t,e $ener%l rule0 u-on 'eli+ery0 o*ners,i-
-%sses to t,e buyer. W,en o*ners,i- ,%' -%sse' to t,e
buyer *,en t,e -ro-erty *%s sol' in t,e e2ecution s%le0 t,e
buyer *oul' not $et %nyt,in$ )rom t,e e2ecution s%le
bec%use ,e merely ste-s into t,e s,oes o) t,e .u'$ment
'ebtor. Since t,e .u'$ment 'ebtor ,%' no o*ners,i- o+er
t,e l%n' %t t,e time o) s%le0 t,e ,e 'i' not %c3uire
o*ners,i- by +irtue o) t,%t s%le.
Note/ 7o 'etermine t,%t t,e l%n' is un'er t,e torrens
system0 t,e o*ners,i- is -ro+en by 7C7Hs or OC7Hs0
ot,er*ise i) -roo) o) o*ners,i- %re mere t%2 'ecl%r%tions0 it
*ill not be consi'ere' %s re$istere' l%n'.
Loss o) t,e t,in$ *,ic, is t,e sub.ect o) % contr%ct o) S%le
3f the thing sold or the ob-ect of the sale is lost or
destroyed, who will bear the loss, or who may be held
liable for the loss$ Can the b"yer still be compelled to
pay the price despite the loss of the thing which was
the ob-ect of the sale$
7,e )irst t,in$ t,%t must be consi'ere' is t,e c%use o) t,e
loss bec%use e+en i) t,e seller or t,e buyer is still t,e
o*ner0 i) t,e loss *%s 'ue to t,e )%ult o) one o) t,e -%rties0
,e *oul' eit,er be t,e one to be%r t,e loss or ,e c%n be
,el' li%ble )or t,e loss.
:or e2%m-le i) t,e seller *%s %t )%ult resultin$ in t,e loss o)
t,e t,in$ %n' ,e *%s still t,e o*ner0 ,e *ill be%r t,e loss.
;ut i) %t t,e time o) t,e loss0 t,e buyer *%s t,e o*ner0 %n'
t,e seller *%s %t )%ult0 t,e seller *ill be li%ble )or t,e loss o)
t,e t,in$ bec%use ,e *%s %t )%ult.
Loss 'ue to )ortuitous e+ent
1he common scenario in the bar e,ams is that the
thing is lost d"e to a fort"ito"s eent, witho"t the fa"lt
of the b"yer or the seller, who bears the loss or who
can be held liable for the loss$
Another scenario which m"st be considered is when
did the loss happen$ 1his !"estion will be releant if
the loss happen after the perfection. Beca"se if the
loss of the thing happened before the perfection, if the
loss was d"e to a fort"ito"s eent$ 3t will be the seller
who shall bear the loss, if the seller is the owner. 3n
s"ch case, there will be no perfected contract of sale at
49
all beca"se there was no ob-ect to tal) abo"t. After the
perfection of the sale, who bears the loss$
As % rule0 t,e o*ner be%rs t,e loss. 7,is is not %--lic%ble
in s%le o) )un$ible $oo's0 bec%use in suc, s%le0 un'er Art.
15E!0 i) t,ese $oo's %re sol' %t t,e -rice )i2e' %ccor'in$ to
*ei$,t0 number or me%sure %n' t,ese $oo's ,%' %lre%'y
been *ei$,e'0 counte' or me%sure'0 t,e ris8 o) loss *ill
%lre%'y be *it, t,e +en'ee e+en be)ore t,ere is tr%ns)er o)
o*ners,i-. Suc, is not correct0 bec%use suc, l%* is relie'
u-on t,e ol' ci+il co'e. 7,e Ne* Ci+il Co'e un'er Art.
15E! l%st -%r%$r%-, is %n %men'e' +ersion o) Art 156 o)
t,e Ol' Ci+il Co'e. In t,e %men'e' +ersion it *%s -ro+i'e'
t,%t S,oul' )un$ible t,in$s be sol' )or % -rice )i2e'
%ccor'in$ to *ei$,t0 number or me%sure0 t,e ris8 s,%ll not
be im-ute' to t,e +en'ee until t,ey ,%+e been *ei$,e'0
counte' or me%sure'0 %n' 'eli+ere'0 unless t,e l%tter ,%s
incurre' in 'el%y. Wit, 'eli+ery0 o*ners,i- -%sses to t,e
buyer %n' t,ere)ore0 it is t,e +en'ee *,o s,%ll be%r t,e ris8
o) loss. 7,ere)ore0 t,ere is seem to be no e2ce-tion0 %s )%r
%s )un$ible $oo's %re concerne'.
& sold a second hand car to 2 for E5+), the agreement
between & and 2 was that half of the p"rchase price
shall be paid "pon deliery of the car to 2 and the
balance of 1L5) shall be paid in 5 e!"al monthly
installments of 15) each. 1he car was deliered to 2
and & paid the amo"nt of 1L5) to 2. Dess than one
month thereafter, the car was stolen from 28s garage
with no fa"lt on 28s part and was neer recoered. 3s &
legally bo"nd to pay the balance of 1L5)$
W,et,er or not E *oul' be le$%lly boun' to -%y *ill 'e-en'
on *,o *ill be%r t,e loss. Since t,e c%r *%s stolen0 *oul'
t,e buyer be%r t,e loss= Or *oul' t,e seller be t,e one to
be%r t,e loss= I) E *oul' ,%+e to be%r t,e loss0 ,e *oul'
still be com-elle' to -%y t,e b%l%nce.
:rom t,e )%cts0 t,ere *%s %lre%'y 'eli+ery0 t,ere is not,in$
un'er t,e )%cts t,%t *ill s,o* o*ners,i- *%s reser+e'.
7,ere)ore u-on 'eli+ery0 o*ners,i- -%sses to E t,e buyer.
Un'er t,e )%cts0 t,ere *%s no )%ult on t,e -%rt o) t,e seller.
>ence0 t,e buyer be%rs t,e loss. 7,ere)ore0 E c%n be
com-elle' to -%y suc, b%l%nce.
%, an American resident of 'anila, abo"t to leae on a
acation, sold his car to B, for *+++ A%&. 1he payment
to be made 1+ days after deliery to :, a third party
depositary agreed "pon who shall delier the car to B
"pon receipt by : of the p"rchase price. 3t was
stip"lated that ownership be retained by % "ntil
deliery of the car to :. 5 days after deliery of the car
to :, it was destroyed by fire which g"tted the ho"se of
:, witho"t the fa"lt of either : or B. 3s b"yer B legally
obligated to pay the p"rchase price$
:rom t,e %$reement o) t,e -%rties0 o*ners,i- is ret%ine'
by S until t,e 'eli+ery o) t,e c%r. >o*e+er0 un'er t,e )%cts
t,e loss ,%--ene' %)ter t,e 'eli+ery o) t,e c%r0 t,ere)ore it
is cle%r t,%t o*ners,i- ,%' %lre%'y -%sse' to ; %)ter
'eli+ery o) t,e c%r to I. 7,e o*ner ; t,ere)ore ,%' to be%r
t,e loss.
Ander what circ"mstance wo"ld a party to a contract
of sale who was not the owner at the time of the loss
be the one to bear the loss$
1. I) t,ere is % sti-ul%tion (t%8e note o) 7%bor% C%se#.
. W,en o*ners,i- is ret%ine' by t,e seller in or'er to
secure -%yment o) t,e -rice )or t,e $oo's sol' (Art.
16!5#.
4. W,en t,e seller is in -ossession but t,e buyer is %t )%ult
bec%use o) t,e 'el%y in retrie+in$ t,e $oo's.
5. W,en t,e seller is in -osession0 but o*ners,i- ,%'
%lre%'y -%sse' to t,e buyer by constructi+e 'eli+ery0 but
t,e seller *ill be%r t,e loss 'ue to t,e sellerHs )%ult.
A set of A'GA( was sold to 1abora on installment
basis. 4n the day these boo)s were deliered to the
office of Atty. 1abora, the entire bloc) where the office
of the latter is located was b"rned together with the
A'GA(. Atty 1abora ref"sed to pay the balance despite
demand by lawyer8s co. Dawyer8s co therefore filed a
case. 1wo defenses were raised 1) res perit domino
r"le beca"se there is a stip"lation in the contract that
the seller shall retain ownership oer the boo)s "ntil
f"ll payment, and if lawyers co was the owner then it
sho"ld bear the loss. 3s the arg"ment correct$
No. I) t,ere *%s % sti-ul%tion in t,e contr%ct t,%t o*ners,i-
s,%ll be ret%ine' by l%*yers co until )ull -%yment *%s
m%'e0 t,ere *%s %lso % sti-ul%tion t,%t t,e ris8 o) loss s,%ll
-ert%in to t,e buyer %t t,e time t,e boo8s *ere 'eli+ere'
*,%te+er t,e c%use o) t,e loss. 7,is is %n e2ce-tion to t,e
res -erit 'omino rule.
Ass"ming there was no stip"lation that the ris) of loss
shall pertain to the b"yer "pon deliery, may the b"yer
still be held to answer for the loss$
Un'er Art. 16!50 *,en t,e o*ner reser+e' t,e title to t,e
-ro-erty only to secure t,e -%yment o) t,e -rice o) t,e
buyer0 t,en by l%*0 ris8 o) loss s,%ll only -ert%in to t,e
buyer. 7,is is 8no*n %s % security title. 7,ere)ore0 e+en i)
t,e buyer 'i' not %c3uire title u-on 'eli+ery0 ,e be%rs t,e
loss.
3f the ob-ect of the sale is in possession of the seller,
and the same was lost d"e to fort"ito"s eent, who will
bear the loss$ 1he seller$
Not necess%rily. It *ill be t,e -%rty *,o *%s %t )%ult
resultin$ in t,e 'el%y in t,e 'eli+ery o) t,e $oo's. It m%y be
t,e buyer or t,e seller.
As agreed "pon by the parties, the b"yer sho"ld hae
obtained the goods from the seller yesterday. /oweer,
d"e to the fa"lt of the b"yer, he failed to get the goods
4<
from the sellers place. 1oday all these goods were lost
or destroyed d"e to a fort"ito"s eent. #ho will bear
the loss$
Or'in%rily0 t,e buyer *,o *oul' obt%in -ossession )rom t,e
seller.
At t,%t time t,ere is yet no 'eli+ery bec%use t,e $oo's %re
still *it, t,e seller. 7,e o*ner is still t,e seller but t,e
o*ner *ill not be%r t,e loss bec%use t,e 'el%y in t,e
'eli+ery *%s 'ue to t,e )%ult o) t,e buyer.
3n another scenario, the goods are still with the seller,
b"t it will be the seller who wo"ld bear the loss een if
the b"yer was already the owner. /ow co"ld the b"yer
already be the owner if the seller is still in possession
of the goods. 1he answer wo"ld be by reason of
constr"ctie deliery. 6hilippine law recogni>es not
only physical or act"al b"t also constr"ctie deliery.
4ne e,ample of constr"ctie deliery, is the e,ec"tion
of a p"blic doc"ment or instr"ment, ownership passed
to the b"yer b"t possession is still with the seller. 3f it
was the seller who was at fa"lt res"lting in the delay in
the deliery of the goods, of co"rse the b"yer will not
bear the loss een if he was the owner already at the
time of the loss.