MEMORIZE!!!
Principal obligations of the vendor
1. To transfer the ownership of the thing sold
2. To deliver the thing
3. To warrant against eviction and hidden defects
4. To take care of the thing, pending delivery, with proper
diligence
5. To pay for the expenses for the execution and
registration of the deed of sale, unless there is a
stipulation to the contrary
Art. 1516. A person who for value negotiates or transfers
a document of title by endorsement or delivery, including
one who assigns for value a claim secured by a document
of title unless a contrary intention appears, warrants:
1. That the document is genuine;
2. That he has a legal right to negotiate or transfer it;
3. That he has knowledge of no fact which would impair
the validity or worth of the document; and
4. That he has a right to transfer the title to the goods and
that the goods are merchantable or fit for a particular
purpose, whenever such warranties would have been
implied if the contract of the parties had been to transfer
without a document of title the goods represented thereby.
Definition of trade terms
1. C.O.D.
2. F.O.B.
3. C.I.F.
4. F.A.S.
5. Ex Factory, Ex Warehouse, etc.
6. Ex Dock
Art. 1525. The seller of goods is deemed to be an unpaid
seller within the meaning of this Title:
1. When the whole of the price has not been paid or
tendered;
2. When a bill of exchange or other negotiable instrument
has been received as conditional payment, and the
condition on which it was received has been broken by
reason of the dishonor of the instrument, the insolvency of
the buyer, or otherwise.
Art. 1526. Subject to the provisions of this Title,
notwithstanding that the ownership in the goods may have
passed to the buyer, the unpaid seller of goods, as such,
has:
1. A lien on the goods or right to retain them for the price
while he is in possession of them;
2. In case of the insolvency of the buyer, a right of
stopping the goods in transitu after he has parted with the
possession of them;
3. A right of resale as limited by this Title;
4. A right to rescind the sale as likewise limited by this
Title.
Where the ownership in the goods has not passed to the
buyer, the unpaid seller has, in addition to his other
remedies a right of withholding delivery similar to and
coextensive with his rights of lien and stoppage in transitu
where the ownership has passed to the buyer.
Art. 1527. Subject to the provisions of this Title, the
unpaid seller of goods who is in possession of them is
entitled to retain possession of them until payment or
tender of the price in the following cases, namely:
1. Where the goods have been sold without any stipulation
as to credit;
2. Where the goods have been sold on credit, but the term
of credit has expired;
3. Where the buyer becomes insolvent.
The seller may exercise his right of lien notwithstanding
that he is in possession of the goods as agent or bailee for
the buyer.
Art. 1529. The unpaid seller of goods loses his lien
thereon:
1. When he delivers the goods to a carrier or other bailee
for the purpose of transmission to the buyer without
reserving the ownership in the goods or the right to the
possession thereof;
2. When the buyer or his agent lawfully obtains
possession of the goods;
3. By waiver thereof.
The unpaid seller of goods, having a lien thereon, does
not lose his lien by reason only that he has obtained
judgment or decree for the price of the goods.
Art. 1531.
When goods in transit:
1. After delivery to a carrier or other bailee and before
buyer or his agent takes delivery of them; and
2. If the goods are rejected by the buyer, and the carrier or
other bailee continues in possession of them.
When goods considered no longer in transit:
1. After delivery to the buyer to the buyer or his gent in
that behalf;
2. If the buyer or his agent obtains possession of the
goods of the goods at a point before the destination
originally fixed;
3. If the carrier or bailee acknowledges to hold the goods
on behalf of the buyer; and
4. If the carrier or bailee wrongfully refuses to deliver the
goods to the buyer.
Ways of exercising the right to stop:
1. By taking actual possession of the goods; or
2. By giving notice of his claim to the carrier or bailee.
When resale is allowable:
An unpaid seller can exercise the right to resell only when
he has either a right of lien or a right to stop the goods in
transitu and under any of the three following cases:
1. Where the goods are perishable in nature;
2. Where the right to resell is expressly reserved, in case
the buyer should make a default; and
3. Where the buyer delays in the payment of the price for
an unreasonable time.
When the seller may rescind:
An unpaid seller has a right to rescind only if he has either
a right of lien or a right to stay the goods in transitu and
under either of two (2) situations:
1. Where the right to rescind is expressly reserved in case
the buyer should make the default; or
2. Where the buyer delays in the payment of the price for
an unreasonable time.
Art. 1189. When the conditions have been imposed with
the intention of suspending the efficacy 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;
3. 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 fulfillment, 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 benefit of the creditor;
6. f it is improved at the expense of the debtor, he shall
have no other right than that granted to the usufructuary.
When vendee entitled to rescind the sale of realty:
1. If the lack in area is at least 1/10 than that stated or
stipulated
2. If the deficiency in the quality specified in the contract
exceeds 1/10 of the price agreed upon
3. If the vendee would not have bought the immovable had
he known of its smaller area or inferior quality irrespective
of he extent of the lack in area or quality
Art. 1544.
When Article 1544 applicable:
1. The two (or more) sales transactions must constitute
valid sales;
2. The two (or more) sales transactions must pertain to
exactly the same subject matter;
3. The two (or more) buyers at odds over the rightful
ownership of the subject matter must each represent
conflicting interests; and
4. The two (or more) buyers at odds over the rightful
ownership of the subject matter must each have bought
from the very same seller.
Rules as to preference of ownership in case of a
double sale:
If the same property is sold by the vendor to different
vendees, the conflicting rights of said vendees shall be
resolved in accordance with the following rules:
1. If the property sold is movable, the ownership shall be
acquired by the vendee who first takes possession in good
faith.
2. If the property sold is immovable, the ownership shall
belong to:
a. The vendee who first registers the sale in good
faith in the Registry of Property (Registry of Deeds).
b. In the absence of registration, the vendee who
first takes possession in good faith; and
c. In the absence of both registration and
possession, the vendee who presents the oldest
title (who first bought the property) in good faith.
Art. 1545.
Effect of non-fulfillment of condition
1. If the obligation of either party is subject to any
condition and such condition is not fulfilled, such party
may either:
a. Refused to proceed with the contract; or
b. Proceed with the contract, waiving the
performance of the condition.
2. If the condition is in the nature of a promise that it
should happen, the non-performance of such condition
may be treated by the other party as a breach of warranty.
Art. 1547.
Implied warranties in sale
1.Implied warranty as to seller’s title
2.Implied warranty against hidden defects or unknown
encumbrances
3.Implied warranty as to fitness or merchantability
When implied warranty not applicable
1. “As is and where is” sale
2. Sale of secondhand articles
3. Sale by virtue of authority in fact or law
Art. 1548.
Essential elements of the warranty against eviction
1. The vendee is deprived in whole or in part of the thing
purchased;
2. He is so deprived by virtue of a final judgment
3. The judgment is based on a right prior to the sale or an
act imputable to the vendor
4. The vendor was summoned in the suit for eviction at the
instance of the vendee
5. There is no waiver on the part of the vendee
Types of eviction
Eviction may be total or partial.
1. Eviction is total when the vendee is deprived of the
whole of the thing purchased.
2. Eviction is partial in the following cases:
a. The vendee is deprived of part of the thing
purchased
b. The vendee is deprived of some items that were
jointly sold with other items
c. If the immovable sold should be encumbered with
any non-apparent burden or servitude (e.g. right of
way), not mentioned in the agreement, of such a
nature that it must be presumed that the vendee
would not have acquired it had he been aware
thereof.
Art. 1555. When the warranty has been agreed upon or
nothing has been stipulated on this point, in case eviction
occurs, the vendee shall have the right to demand of the
vendor:
1. The return of the value which the thing sold had at the
time of the eviction, be it greater or less than the price of
the sale;
2. The income or fruits, if he has been ordered to deliver
them to the party who won the suit against him;
3. The costs of the suit which caused the eviction, and, in
a proper case, those of the suit brought against the vendor
for the warranty;
4. The expenses of the contract, if the vendee has paid
them;
5. The damages and interests, and ornamental expenses,
if the sale was made in bad faith.

Art. 1561
Requisites for warranty against hidden defects
1. The defect must be important or serious
2. It must be hidden
3. It must exist at the time of sale
4. The vendee must give notice to the defect to the vendor
within a reasonable time
5. The actions for rescission or reduction of the price must
be brought within the proper period -- six (6) months from
the delivery of the thing sold.
6. There must be no waiver of warranty on the part of the
vendee.