You are on page 1of 18

Art. 1535.

Subject to the provisions of this Title, the unpaid sellers right of

lien or stoppage in transitu is not affected by any sale, or other disposition of
the goods which the buyer may have made, unless the seller has assented
If, however, a negotiable document of title has been issued for goods, no
sellers lien or right of stoppage in transitu shall defeat the right of any
purchaser for value in good faith to whom such document has been
negotiated, whether such negotiation be prior or subsequent to the
notifcation to the carrier, or other bailee who issued such document, of the
sellers claim to a lien or right of stoppage in transitu.
Effect if Buyer Has Already Sold the Goods
Generally, the unpaid sellers right of LIEN or STOPPAGE IN TRANSITU remains even if the
buyer has sold or otherwise disposed of the goods.

When the seller has given his consent thereto.

When the purchaser or the buyer is a purchaser for value in good faith of a
negotiable document of title.
Art. 1536. The vendor is not bound to deliver the thing sold in case the
vendee should lose the right to make use of the term as provided in article
When Seller is Not Bound to Deliver Because Buyer has Lost the Beneft of the
Under Art. 1198, the debtor shall lose every right to make use of the period:
(a) When after the obligation has been contracted, he becomes insolvent, unless he
gives a guaranty or security for the debts;
(b)When he does not furnish to the creditor the guaranties which he has promised;
(c) When by his own acts he has impaired said guaranties or securities after their
establishment, and when through a fortuitous event they disappear, unless he
immediately gives new ones equally satisfactory;
(d)When the debtor violates any undertaking, in consideration of which the creditor
agreed to the period;
(e) When the debtor attempts to abscond.
In the cases enumerated, the vendor is not bound to deliver.
A purchased goods from B. A promised to give certain securities, as a result of which, A
was given one year within which to pay. A failed to give the securities. Can B be
compelled to deliver?
ANS.: No. (Of course, if B so desires, he may voluntarily deliver.)
Art. 1537. The vendor is bound to deliver the thing sold and its accessions
and accessories in the condition in which they were upon the perfection of the
All the fruits shall pertain to the vendee from the day on when the contract
was perfected.
Accessions and accessories

Example of accession: Fruits

Example of accessories: In the sale of a car, the jack is considered an accessory.
Duty to Preserve
This article implicitly reiterates the duty of the seller to PRESERVE. Naturally, a fortuitous
event excuses the seller. But since a fortuitous event is never presumed, the loss of the
property because of such event is naturally to be proved by the seller.
Right to the Fruits
Although under the second paragraph fruits shall pertain to the buyer from the date of
perfection, it is evident that a contrary stipulation may be agreed upon, or a later date
may be set. The term fruits here includes natural, industrial and civil fruits.
Art. 1538. In case of loss, deterioration or improvement of the thing
before its delivery, the rules in article 1189 shall be observed, the vendor
being considered the debtor.
Effect of Loss, Deterioration or Improvement Before Delivery
This reiterates the rule that from time of perfection to delivery, risk is borne by the
Article 1189
When the conditions have been imposed with the intention of suspending the effcacy of
an obligation to give, the following rules shall be observed in case of the improvement,
loss or deterioration of the thing during the pendency of the condition:
(1)If the thing is lost without the fault of the debtor, the obligation shall be extinguished;
(2)If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it
is understood that the thing is lost when it perishes, or goes out of commerce, or
disappears in such a way that its existence is unknown or it cannot be recovered;

When the thing deteriorates without the fault of the debtor, the impairment is to
be borne by the creditor;

(4)If it deteriorates through the fault of the debtor, the creditor may choose between the
rescission of the obligation and its
fulfllment, with indemnity for damages in either case;
(5)If the thing is improved by its nature, or by time, the improvement shall inure to the
beneft of the creditor;
(6) If it is improved at the expense of the debtor, he shall have no other right than that
granted to the usufructuary.
Art. 1539. The obligation to deliver the thing sold includes that of placing
in the control of the vendee all that is mentioned in the contract, in conformity
with the following rules.
If the sale of real estate should be made with a statement of its area, at
the rate of a certain price for a unit of measure or number, the vendor shall be
obliged to deliver to the vendee, if the latter should demand it, all that may
have been stated in the contract; but, should this be not possible, the vendee
may choose between a proportional reduction of the price and the rescission of
the contract, provided that, in the latter case, the lack in the area be not less

than one-tenth of that stated.

The same shall be done, even when the area is the same, if any part of the
immovable is not of the quality specifed in the contract.
The rescission, in this case, shall only take place at the will of the vendee,
when the inferior value of the thing sold exceeds one-tenth of the price agreed
Nevertheless, if the vendee would not have bought the immovable had he
known of its smaller area or inferior quality, he may rescind the sale.
Sale of Real Estate By the Unit
(a) This refers to the sale of real estate by the unit. Hence, if A buys from B a piece of land
supposed to contain 1,000 square meters at the rate of P10,000 per square meter, but
the land has only 800 sq.m., the additional 200 must be given to A should A demand
them. If this cannot be done, A may pay only P8 million (for the 800 sq.m.) or rescind the

If in the above example, there are only 950 square me-ters, can A ask for

ANS.: As a rule no, because the lack is only 50 square meters. (The lack must be at least
1/10 of the area stated.) However, if A would not have bought the land had he known of
its smaller area, he may rescind the sale.
NOTE: The one-tenth part referred to in the article applies to 1/10 of the area stated in
the contract, not to 1/10 of the true or actual area. This is evident because of the
wording of the law area stated.
Unit Price Contract
Virgilio Dionisio v. Hon. Vicente Paterno
L-49654, Feb. 26, 1981
If a contract is a unit price contract (as distinguished from a lump sum contract)
payment will be made only on the basis of contractual items actually performed, in
accordance with the given plans and specifcations.
In such a unit price contract, the amount agreed upon is generally merely an estimate,
and may be reduced or increased depending upon the quantities performed multiplied by
the unit prices previously agreed upon. For a unit price formula to be applied,
there must be a stipulation to such effect. Incidentally, a contractor may not be
awarded a compensation for his services, arising from a price adjustment due to
Art. 1541. The provisions of the two preceding articles shall apply to
judicial sales.
The Rule in Judicial Sales
Note that Arts. 1540 and 1541 apply to judicial sales.
Art. 1542. In the sale of real estate, made for a lump sum and not at the
rate of a certain sum for a unit of measure or number, there shall be no
increase or decrease of the price, although there be a greater or less area or
number than that stated in the contract.
The same rule shall be applied when two or more immovables are sold for
a single price; but if, besides mentioning the boundaries, which is
indispensable in every conveyance of real estate, its area or number should be
designated in the contract, the vendor shall be bound to deliver all that is
included within said boundaries, even when it exceeds the area or number

specifed in the contract; and, should he not be able to do so, he shall suffer a
reduction in the price, in proportion to what is lacking in the area or number,
unless the contract is rescinded because the vendee does not accede to the
failure to deliver what has been stipulated.
Sale for a Lump Sum (A Cuerpo Cierto)
Here, the sale is made for a lump sum (a cuerpo cierto or por precio alzado) not at the
rate per unit.
A buys a piece of land from B at the lump sum of P10 million. In the contract, the area is
stated to be 1,000 square meters. The boundaries are of course mentioned in the
contract. Now then it was discovered that the land within the boundaries really contains
1,500 square meters. Is B bound to deliver the extra 500?
ANS.: Yes. Furthermore, the price should not be increased. This is so because B should
deliver all which are included in the boundaries. If B does not deliver the remaining 600,
A has the right

either to rescind the contract for the sellers failure to deliver what has been
stipulated, or

(b)to pay a reduced proportional price, namely 2/3 of the original price. This is so because
he really gets only 2/3 of the land included within the boundaries (1,000 sq.m. out of
1,500 sq.m.).
Another Example
A buys a piece of land a cuerpo cierto (for a lump sum). The contract states a certain
number of square meters but the land included in the boundaries happen to be LESS.

Is A entitled to rescind?
ANS.: No.

(b)Is A entitled to pay a reduced price?

ANS.: No.
The Civil Code presumes that the purchaser had in mind a determinate piece of land and
that he ascertained its area and quality before the contract was perfected. If he did not
do so, or if having done so, he made no objection and consented to the transaction, he
can blame no one but himself.
Delivery of All the Land Included in the Boundaries
What is important is the delivery of all the land included in the boundaries:
(a) If this is done, there is compliance with the contract and the greater or lesser area is
immaterial. So apply paragraph 1 of this article.

If this is not done, there is really no faithful compliance with the contract and
so paragraph 2 should be applied. (Azarraga v. Gay, 52 Phil. 599).

Effect of Gross Mistake

Regarding paragraph 1, although ordinarily there can be no rescission or reduction or
increase whether the area be greater or lesser, still there are instances in which
equitable relief may be granted to the purchaser as where the defciency is very great,
for under such circumstances, GROSS MISTAKE may be inferred. (Asiain v. Jalandoni, 45
Phil. 296 and Garcia v. Velasco, 40 O.G. No. 2, p. 268).
Effect if Buyer Took the Risk as to Quantity
In one case, the Court was satisfed that although the shortage amounts to practically
one-fourth of the total area, the purchaser clearly intended to take risk of quantity, and

that the area has been mentioned in the contract merely for the purpose of description.
From the circumstances that the defendant, before her purchase of the fshpond, had
been in possession and control thereof for two years as a lessee, she can rightly be
presumed to have acquired a good estimate of its value and area, and her subsequent
purchase thereof must have been premised on the knowledge of such value and area.
Accordingly, she cannot now be heard to claim a equitable re-auction in the purchase
price on the pretext that the property is much less than she thought it was.
Meaning of More or Less
The phrase more or less or others of like import added to a statement of the quantity,
can only be considered as covering inconsiderable or small differences one way or the
other. The use of such phrases in designating the quantity covers only a reasonable
excess or defciency.
Art. 1544. If the same thing should have been sold to different vendees,
the ownership shall be transferred to the person who may have frst taken
possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person
acquiring it who in good faith frst recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person
who in good faith was frst in the possession; and in the absence thereof, to
the person who presents the oldest title, provided there is good faith.
Rules of Preference in Case of Double Sale

Personal property possessor in good faith.

Real property


registrant in good faith;

2) possessor in good faith;

3) person with the oldest title in good faith.
(a) Registration here requires actual recording: hence, if the property was never really
registered as when the registrar forgot to do so although he has been handed the
document, there is no registration. (Po Sun Tun v. Price, 54 Phil. 192). The rule as to
registration covers all kinds of immovables, including land, and makes no distinction
as to whether the immovable is registered under the Land Registration Law (with
therefore a Torrens Title) or not so registered. But insofar as said registered lands are
concerned, Art. 1544 is in perfect accord with the Land Registration Act, Sec. 50 of
which provides that no deed, mortgage, lease, or other voluntary instrument except a
will, purporting to convey or to affect registered land shall take effect as a conveyance or bind the land until the registration of such deed or instrument. (Revilla, et al.
v. Galindez, L-9940, Mar. 30, 1960). Thus, as to lands, covered by a Torrens Certifcate
of Title, a deed of sale is considered registered from the moment it is entered or
recorded in the entry or day book of the Register of Deeds.
(Levin v. Bass, L-4340, May 25, 1952, reversing Bass v. De la Rama, 1 O.G. 889). If the
land is registered under the Land Registration Act (and has therefore a Torrens Title), and
it is sold but the subsequent sale is registered not under the Land Registration Act but
under Act 3344, as amended, such sale is not considered REGISTERED, as the term is
used under Art. 1544. A mere anotacion preventiva (preventive precautionary notice)
is not equivalent to registration, unless within 30 days thereafter there is made an actual
recording. Such a preventive notice is good only against subsequent (not prior)
transferees, and even here for only 30 days. (Mendoza v. Kalaw, 42 Phil. 236). The
registration of a forged deed of sale cannot of course grant the preference adverted to in
this Article inasmuch as among other things, there was no good faith. (See Espiritu v.
Valerio, L-18018, Dec. 26, 1963).
(b)Possession here is either actual or constructive since the law makes no distinction.
(Sanchez v. Ramos, 40 Phil. 614).

(c) Title in this Article means title because of the sale, and not any other title or mode of
acquiring property. Hence, as between a buyer-possessor whose possession has
ripened to ownership because of prescription, and a registrant in good faith, the
possessor-owner is naturally preferred. (Lichauco v. Berenguer, 39 Phil. 642).
(d)Note that in all the rules there must be good faith; otherwise, the order of preference
does not apply. (Romeo Paylago and Rosario Dinaan-dal v. Ines Pastrana Jorabe and
the Court of Appeals, L-20046, Mar. 27, 1968). A purchaser in good faith is one who
buys the property of another without notice that some other person has a right to, or
interest in such property, and pays a full and fair price for the same, at the time of
such purchase, or before he has notice of the claim or interest of some other person in
the property. (Cui and Joven v. Henson, 51 Phil. 612; Inquimboy v. Paez Vda. de la
Cruz, L-13953, May 26, 1960).
A person for example who buys land which he knows has already been
promised to another is a purchaser in bad faith. (Ramos v. Dueno, 50 Phil.
Good faith, however, is presumed. (Emus v. De Zuzuarregui, 53 Phil. 197). In order that a
purchaser of land with a Torrens Title may be considered as a purchaser in good faith, it
is enough that he examines the latest certifcate of title which, in this case, is that issued
in the name of the immediate transferor. (Hern-andez v. Katigbak Vda. de Salas, 69 Phil.
744; Flores, et al. v. Plasina, et al., L-5727, Feb. 12, 1954; Revilla, et al. v. Galindez, L9940, Mar. 30, 1960). The purchaser is not bound by the original certifcate of title but
only by the certifcate of title of the person from whom he has purchased the property.
(Caas, et al. v. Tan Chuan Leong, et al., L-14594, Nov. 29, 1960).
However, where two certifcates of title are issued to different persons covering the same
land in whole or in part, the earlier in date must prevail as between original parties, and
in case of successive registrations, where more than one certifcate is issued over the
land, the person holding under the prior certifcate is entitled to the land as against the
person who relies on the second certifcate. The purchaser from the owner of the later
certifcate and his successors should resort to his vendor for redress, rather than molest
the holder of the frst certifcate and his successors, who should be permitted to rest
secure in their title. (Felix de Villa v. Anacleto Trinidad, et al., L-24918, Mar. 20, 1968,
citing Legarda v. Saleeby, 31 Phil. 590).
Remalate v. Tibe
GR 59514, Feb. 25, 1988
Where the same parcel of land was allegedly sold to two different persons, Art. 1544 will
not apply, despite the fact that one deed of sale was registered ahead of the other, if the
deed frst registered is found to be a forgery and, thus, the sale to the other vendee
should prevail.
This Article does not apply to subsequent judicial attachments, or executions which
should not prevail over prior unregistered sales where possession had already been
conveyed by the execution of a public instrument (See Fabian v. Smith, Bell and Co., 8
Phil. 496; see also Aitken v. Lao, 36 Phil. 510), nor to instances where the double sale
was not made by the same person or his authorized agent (Carpio v. Exevea, 38 O.G. No.
65, p. 1336), nor to one where one sale was an absolute one but the other was a pacto
de retro transaction where the period to redeem has not yet expired (See Teodosio v.
Sabala, et al., L-11522, Jan. 31, 1957), nor to one where one of the sales was one subject
to a suspensive condition which condition was not complied with. (Mendoza v. Kalaw, 42
Phil. 236).
(e) The Article, however, applies to a double donation (Cagaoan v. Cagaoan, 43 Phil. 554)
and to sales made by a principal and his agent of the same property.
[NOTE: In a Court of Appeals case, however, it was held that the article does not apply
where property is frst donated, then sold. (Se-mana, et al. v. Goyena, {C.A.} 49 O.G.
(f) Reason for the rule on preference:
True, no one can sell what he does not own, but this is merely the general rule. Is Art.
1544 then an exception to the general rule? In a sense, yes, by reason of public

convenience (See Aitken v. Lao, 36 Phil. 510); in still another sense, it really reiterates
the general rule in that insofar as innocent third persons are concerned, the registered
owner (in the case of real property) is still the owner, with power of disposition.
Caram, Jr. v. Laureta
L-28740, Feb. 24, 1981
The second buyer of a parcel of land alleged that his purchase had been made in good
faith, because he did not know it had been previously bought by another. Is this enough
to prove good faith in the purchase? No, because he had knowledge of circumstances
which ought to have put him on inquiry. For instance, the frst buyer was already on the
land when the second buyer came along. The second buyer should have investigated the
nature of the frst buyers possession. Since he failed to exercise the ordinary care
expected of a buyer of real estate, he must suffer the consequences.
Illustration of Rules as to Personal Property
In the case of Tomasi v. Villa-Abrille, L-7404, Aug. 21, 1958, the Surplus Property
Commission sold to a buyer all the movable goods in a base area in Guiuan, Samar.
The buyer then immediately took possession of all the movable properties located within
the area. Subsequently, however, the Commission also sold to another the same
properties in the same area.
The second buyer then led suit to have himself declared the owner of the properties
entitled to the possession of the same. The Supreme Court ruled in favor of the frst
buyer because it was he who had frst taken possession in good faith of the properties.
Illustration of Rules as to Real Property
A sold land to B. Subsequently, A sold the same land to C who in good faith registered it
in his name. Who should be considered the owner?
ANS.: C in view of the registration in good faith.
DBP v. Mangawan, et al.
L-18861, Jun. 30, 1964
FACTS: A sold his land to two different parties at different times, selling it frst to X under
Original Torrens Certifcate of Title 100. X had this title cancelled and a transfer
Certifcate of Title was issued in his name. Subsequently, A sold the same land under a
different Certifcate of Title to Y. Which of the two buyers is to be preferred?
HELD: This is a case of double sale, and clearly, X the frst buyer who registered the land
in his name, ought to be preferred.
Astorga v. Court of Appeals
L-58530, Dec. 26, 1984
The second buyer of property (real estate) is preferred over the frst buyer if the second
buyer was the frst to register the property in good faith in the Registry of Deeds.
Po Sun Tun v. Price
54 Phil. 192
FACTS: A sold land to X who then went to the Registry of Property. X gave the deed of
sale for registration, was given a receipt therefor, but unfortunately, the Registrar for one
reason or another was not able to actually record the deed. Subsequently, A sold the
same land to Y, a purchaser in good faith. Y had the land registered in his name. Issue:
Who is now the owner?
HELD: Y, in view of the registration in good faith.
The sale in favor of X was never actually registered. The Court held: Where a piece of

real property is frst sold to a person who only secures a receipt for the document
evidencing the sale from the offce of the register of deeds, and where the piece of
property is later sold to another person who records his documents in the Registry of
Deeds as provided by law, and secures a Torrens Title the property belongs to the latter.
NOTE: The mere presentation to the Office of the Registry of a document on which
acknowledgment of receipt is written is not equivalent to recording the property. Escriche
says that registration in its juridical aspect must be understood as the entry made in the
book or public registry of deeds.
Soler and Castillo say:
Registration in general as the law uses the word means any entry made in the books of
the Registry, including both registration in its ordinary and strict sense, and cancellation,
annotation, and even the marginal notes. In its strict ac-ceptation, it is the entry made in
the Registry which records solemnly and permanently the right of ownership and other
real rights. (Diccionario de Legislacion Hipotecaria y Notarial, Vol. II, p. 185).
Victoriano Hernandez v. Macaria Katigbak Viuda de Salas
69 Phil. 744
FACTS: Leuterio sold in 1922 a parcel of registered land (with a Torrens Title) to
Villanueva. The deed of sale was however never registered. In 1926, a creditor of
Leuterio named Salas Rodriguez sued Leuterio for recovery of the debt, and a writ of
execution was levied on Leuterios land (the same lot that had been sold to Villanueva).
Salas Rodriguez did not know of this sale. Upon the other hand, the levy on execution
was duly registered. One month after this registration of the levy, Villanueva led a thirdparty claim. The very next day, the execution sale was made and Salas Rodriguez was
the highest bidder. Issue: Who should be considered the owner of the land Salas or
HELD: Salas Rodriguez should be considered as the owner because of the following

It is a well-settled rule that, when the property sold on execution is registered

under the Torrens system, registration is the operative act that gives validity to the
transfer or creates a lien on the land, and a pur-chaser on execution sale, is not
required to go behind the registry to determine the conditions of the property. Such
purchaser acquires such right, title, and interest as appearing on the certifcate of title
issued on the property, subject to no liens, encumbrances or burdens that are noted
thereon. Be it observed that Villanuevas right was never registered nor annotated on
the Torrens Certifcate.

(b)The doctrine in Lanci v. Yangco (62 Phil. 563), which purports to give effect to all
liens and encumbrances existing prior to the execution sale of a property registered
under the Torrens System even if such liens and encumbrances are not noted in the
certifcate of title (on the theory that if, for example, a previous sale had been made
by the registered owner, he can no longer convey what he does not have) has been
ABANDONED by the Supreme Court. (See Philippine National Bank v. Camus, L-46870,
Jun. 27, 1940).
(c) The only exception to the rule enunciated in (a) is where the purchaser had
knowledge, prior to or at the time of the levy, of such previous lien or encumbrance.
In such case, his knowledge is equivalent to registration, and taints his purchase with
bad faith. (Gustilo v. Ma-ravilla, 48 Phil. 442; La Urbana v. Bernardo, 62 Phil. 790; 23
C.J. Sec. 812; Parsons Hardware Co. v. Court of Appeals, L-46141). But if knowledge of
any lien or encumbrance upon the property is acquired after the levy, the purchaser
cannot be said to have acted in bad faith in making the purchase, and, therefore, such
lien or encumbrance cannot affect his title.
(d)In the present case, the third-party claim was fled one month after the levy was
recorded. The validity of the levy as recorded. The validity of the levy is thus
unaffected by any subsequent knowledge which the judgment creditor might have
derived from the third-party claim. The fact that this third-party claim was presented
one day before the execution sale, is immaterial. If the levy is valid, as it was, the
execution sale made in pursu-ance thereof is also valid, just as a mortgage lien validly

constituted may validly be foreclosed regardless of any equities that may have arisen
after its constitution.
A sold a parcel of land with a Torrens Title to B on Jan. 5. A week later, A sold the same
land to C. Neither sale was registered. As soon as B learned of the sale in favor of C, he
(B) registered an adverse claim stating that he was making the claim because the
second sale was in fraud of his rights as frst buyer. Later, C registered the deed of sale
that had been made in his favor. Who is now the owner B or C?
ANS.: C is clearly the owner, although he was the second buyer. This is so, not because
of the registration of the sale itself but because of the AUTOMATIC registration in his
favor caused by Bs knowledge of the _rst sale (actual knowledge be-ing equivalent to
registration). The purpose of registration is to notify. This noti_ cation was done because
of Bs knowledge. It is wrong to assert that B was only trying to protect his right for there
was no more right to be protected. He should have registered the sale BEFORE
knowledge came to him. It is now too late. It is clear from this that with respect to the
principle actual knowledge is equivalent to registration of the sale about which
knowledge has been obtained the knowledge may be that of either the FIRST or the
SECOND buyer.
X orally appointed Y as his agent to sell a parcel of land. On Sept. 30, 2004, Y sold the
land to A who forthwith took possession thereof. It turned out, however, that on Sept. 25,
2004, X without informing Y, had already sold the same land to B who up to now has not
yet taken possession thereof. Neither A nor B has registered his purchase. Whose
contract should prevail? Reason.
ANS.: The contract of X with B will prevail, for he has title while A has no title. It is true
that A frst took possession, but it should be noted that the sale to A was null and void,
inasmuch as Ys authority to sell the land was not in writing. (Art. 1874, Civil Code).

Section 3
Art. 1545. Where the obligation of either party to a contract of sale is
subject to any condition which is not performed, such party may refuse to
proceed with the contract or he may waive performance of the condition. If the
other party has promised that the condition should happen or be performed,
such frst mentioned party may also treat the non-performance of the
condition as a breach of warranty.
Where the ownership in the thing has not passed, the buyer, may treat the
fulfllment by the seller of his obligation to deliver the same as described and
as warranted expressly or by implication in the contract of sale as a condition
of the obligation of the buyer to perform his promise to accept and pay for the
Presence of Conditions and Warranties
(a) Conditions may be waived.
(b)Conditions may be considered as warranties.

Art. 1546. Any affrmation of fact or any promise by the seller relating to
the thing is an express warranty if the naturel tendency of such affrmation or
promise is to induce the buyer to purchase the same, and if the buyer
purchases the thing relying thereon. No affrmation of the value of the thing,
nor any statement purporting to be a statement of the sellers opinion only,
shall be construed as a warranty, unless the seller made such affrmation or
statement as an expert and it was relied upon by the buyer.
When is There a Warranty?
A good test:
(a) If buyer is ignorant, there is a warranty.
(b)If the buyer is expected to have an opinion AND the seller has no special opinion,
there is no warranty. (Spencer Heater Co. v. Abbot, 91 N.J.L-594, 104 Atl. 91).
[NOTE: Express warranty defned It is any affrmation of fact, or any promise by the
seller relating to the thing if the natural tendency of such affrmation or promise is to
induce the buyer to purchase the same, and if the buyer purchases the thing relying
thereon. (Art. 1546, 1st sentence). It includes all warranties de-rived from the language
of the contract, so long as the language is express. Thus, the warranty may take the
form of an affrmation, a promise or a representation. (Parish v. Kotthoff, 128 Ore. 523).]
[NOTE: If a purchaser has ample opportunity to investigate the land before purchase,
and the seller did not prevent such an investigation, and the purchaser really
investigates, then the purchaser is not allowed afterwards to say that the vendor made
false represen-tations to him. (Azarraga v. Gay, 5 Phil. 599).]
Effect of Dealers Talk
Dealers talk like excellent, cannot be considered as an express warranty. A little
exaggeration is apparently allowed by the law as a concession to human nature. This is
in accordance with the civil law maxim simplex commendatio non-obligat or the
principle caveat emptor (let the buyer beware).
Rule When There Is No Deliberate Lie
Where it does not appear that the seller deliberately violated the truth when he stated
his belief that there were a certain number of coconut trees on the land, no action will lie
against him. (Gochangco v. Dean, 47 Phil. 687).

Art. 1547. In a contract of sale, unless a contrary inten-tion appears, there is:
An implied warranty on the part of the seller that he has a right to sell
the thing at the time when the ownership is to pass, and that the buyer shall
from that time have and enjoy the legal and peaceful possession of the thing;
(2) An implied warranty that the thing shall be free from any hidden faults
or defects, or any charge or encum-brance not declared or known to the buyer.
This article shall not, however, be held to render liable a sheriff, auctioneer,
mortgagee, pledgee or other person professing to sell by virtue of authority in
fact or law, for the sale of a thing in which a third person has a legal or
equitable interest.
Implied Warranties Against Eviction and Against Hidden Defect
(a) This Article is fundamentally important.
(b)A buyer at a tax sale is supposed to take all the chances because there is no warranty
on the part of the State
(Govt v. Adriano, 41 Phil. 1121) and a sheriff does not guarantee title to the property he
sells. (Mun. of Albay v. Benito, et al., 43 Phil. 576).
(c) In general, the actions based on the implied warranties prescribe in 10 years since
these obligations are imposed by law. (See Phil. Nat. Bank v. Lasos, [C.A.] 40 O.G.
[Supp. 5], p. 10). Special provisions, of course, found in the succeeding articles will
naturally prevail.
Republic of the Phils. v. Hon. Umali
GR 80687, Apr. 10, 1989
If a person purchases a piece of land on the assurance that the sellers title thereto is
valid, he should not run the risk of being told later that his acquisition was ineffectual
after all. The further consequence would be that land conficts could be even more
numerous and complex than they are now and possibly also more abrasive if not even

Subsection 1
Art. 1548. Eviction shall take place whenever by a fnal judgment based on a
right prior to the sale or an act imputable to the vendor, the vendee is
deprived of the whole or of a part of the thing purchased.
The vendor shall answer for the eviction even though nothing has been
said in the contract on the subject.
The contracting parties, however, may increase, dimin-ish, or suppress this
legal obligation of the vendor.
Warranty in Case of Eviction
(a) The warranty in case of eviction is a natural element in the contract of sale; hence,
the vendor answers for eviction even if the contract be silent on this point.
(b)The buyer and the seller are, of course, allowed to add to, subtract from, or suppress
this legal obligation on the part of the seller. Thus, it has been held that the vendors
liability for warranty against eviction in a con-tract of sale is generally waivable and
may be renounced by the vendee. (See Arts. 1533-1634, Civil Code; see also Andaya
v. Manansala, L-14714, Apr. 30, 1960).
(c) Although it is true that the government is not liable for the eviction of the purchaser
at a tax sale (Govt. v. Adriano, supra), still the owner of the property sold under
execution at the instance of the judgment credi-tor is liable for eviction, unless
otherwise decreed in the judgment. (Art. 1662, Civil Code).
(d)The buyer is allowed to enforce the warranty against the seller or against the sellers
of his own immediate seller. (De la Riva v. Escobar, 5 Phil. 243).
(e) Even if the buyer does not appeal from a judgment order-ing his eviction and the
judgment subsequently becomes _nal, the seller is still liable for the eviction.
(Canizares v. Torrejon, 21 Phil. 127).
(f) Even if it was the buyer who instituted the suit against the third person, still the seller
would be liable, if the buyer is defeated. What is important is that the buyer was
defeated. (Manresa).
Sellers Fault
Generally, all rights acquired prior to the sale by oth-ers can be imputed to the seller. But
imputability or fault is really important: hence, seller is still liable even if the act be made
after the sale.
Example: B bought land from S. B did not register. C then bought same land from S. C
registers. B is defeated. Can B hold S liable for the eviction although Cs right came after
the sale to him?
ANS.: Yes, because although it came after the sale yet it was attributable to Ss own fault
and bad faith. (Manresa).

Responsibility of Seller
The seller is responsible for:
(a) his own acts;
(b)those of his predecessors-in-interest. (Manresa). He is not responsible for
dispossession due to:
(a) acts imputable to the buyer himself;
(b)fortuitous events.
Essential Elements for Eviction
(a) There is a fnal judgment;

(b)The purchaser has been deprived in whole or in part of the thing sold;
(c) The deprivation was by virtue of a right prior to the sale (or one imputable to the
seller) effected by the seller;
(d)The vendor has been previously noti_ ed of the complaint for eviction at the instance
of the purchaser. (Bautista, et al. v. Lasam, et al., 40 O.G. No. 9, p. 1825 and Canizares
Tiana v. Torrejon, 21 Phil. 127).
(f) Plaintiff in Suit
(h)In general, it is only the buyer in good faith who may sue for the breach of
warranty against eviction. If he knew of possible dangers, chances are that
he assumed the risk of eviction. (Aspiras v. Galuan, [C.A.] 53 O.G. 8854).
(j) Defendant in Suit
(l) In a proper case, the suit for the breach can be directed only against the
immediate seller, not sellers of the seller unless such sellers had promised to
warrant in favor of later buyers (TS, Dec. 26, 1896) or unless the immediate
seller has expressly assigned to the buyer his own right to sue his own seller.
(De la Riva v. Escobar, 51 Phil. 243).

Art. 1549. The vendee need not appeal from the decision in order
that the vendor may become liable for eviction.
Vendee Need Not Appeal
If the lower court evicts the buyer, he does not need to appeal to the
appellate courts before he can sue for damages. However, the decision must
of course be fnal.