What is Article 1524?
 The vendor shall not be bound to deliver the thing
sold, if the vendee has not paid him the price, or if no
period for the payment has been fixed in the contract.
When will a buyer lose his right to make use of a period
under this Article 1524?
 If the vendee would lose the benefit of the term, in
which case, the vendor is not obliged to deliver.
Who is an unpaid seller under Article 1526?
 A seller is deemed an unpaid seller when:
(a) He has not been totally paid of the price;
(b) There is no full payment tendered to him. After
proper tender has been made, the seller ceases
to be an unpaid seller.
(c) The negotiable instrument has been received as
conditional payment, but the condition was not
fulfilled. Bills of exchange or mercantile
documents shall produce the effect of payment
only when they have been encashed or when
through the fault of the creditor they have been
impaired. Hence, payments through these
mercantile documents are conditional.
What are the rights of an unpaid seller under Article
1526?
(a) Right to retain the goods as security for the payment
of the price while he remains in possession of them.
This is known as POSSESSORY LIEN.
(b) Right of stopping the goods while they are in transit
in case of insolvency of the buyer so that he (seller)
can resume his possession of the goods. Insolvency
may be existing at the time of, or after the
transaction.
(c) Right to resell the goods when the same are of
perishable nature; if resale is agreed upon in case of
default; or when the buyer is in default in the
payment for an unreasonable length of time
PROVIDED the seller himself does not buy the goods.
(d) Right to rescind the sale if this right is reserved, or the
buyer has defaulted in the payment for an
unreasonable length of time.
Additional Right:
In case title to the goods has not yet passed to the
buyer, he still retains the ownership over the goods. Though
he has no possessory lien, he being the possessor, he can
however withhold the delivery of the goods to the prospective
buyer.
What is a lien?
 Possessory Lien – the seller is entitled to retain
possession of the goods as security for the purchase
price.
 Lien on the price – after the delivery, the seller loses
his possessory lien, but retains his lien on the price of
the goods.
(legal dictionary def) Lien is a right given to another by the
owner of property to secure a debt, or one created by law in
favor of certain creditors.
What is Article 1527?
 Subject to the provisions of this Title, the unpaid seller
of goods who is in possession of them is entitled to
retain possession 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 the he is in possession of the
goods as agent or bailee for the buyer.
What is Article 1528?
 Where an unpaid seller has made part delivery of the
goods, he may exercise his right of lien on the
remainder, unless such part delivery has been made
under such circumstances as to show an intent to
waive the lien or right of retention.
What is Article 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.
What is Article 1530?
 Subject to the provisions of this Title, when the buyer
of goods is or becomes insolvent, the unpaid seller
who has parted with the possession of the goods has
the right of stopping them in transit, that is to say, he
may resume possession of the goods at any time
 while they are in transit, and he will then become
entitled to the same rights in regard to the goods as
he would have had if he had never parted with the
possession.
Who is considered an insolvent under Article 1530?
 One who has ceased to pay his debts as they become
due, whether or not insolvency proceedings have
been commenced or not.
What is the rationale for the seller’s right of stoppage in
transitu?
 CLEARLY to prevent injustice of allowing the buyer to
acquire ownership and possession of the goods when
owing to his insolvency, he cannot pay the price which
was to be given in return for the goods.
 Essential basis of right: principle allowing rescission
and restitution where there is actual or prospective
failure of consideration.
When are goods considered in transit under Article
1531?
(a) From the time they have been delivered to a carrier
or other bailee and before the buyer or his agent has
taken possession of them;
(b) When the goods were rejected by the buyer, and the
carrier or other bailee continues possessing them.
When are goods considered no longer in transit under
Article 1531?
(a) When the buyer intercepted the shipment before it
reaches its original or appointed destination. Hence,
there is premature delivery.
(b) When after the arrival of the goods at the appointed
destination, the carrier or bailee in that behalf
acknowledges to the buyer or his agent that he is
holding the goods on his behalf;
(c) When the carrier or other bailee wrongfully refuses to
deliver the goods to the buyer or his agent in that
behalf. The seller cannot extend the exercise of his
right of stoppage in transitu by the refusal of the
carrier to deliver the goods to the buyer. Hence, the
goods are no longer transit.
What are the ways of exercising the right of stoppage in
transitu under Art. 1532?
(a) By obtaining actual possession of the goods;
(b) By giving notice of the seller’s claim to the carrier or
other bailee in possession thereof.
 Notice to the carrier or other bailee must be given at
such time and manner that the former by the exercise
of reasonable diligence be given the opportunity to
prevent the delivery to the buyer.
What is article 1533?
 Where the goods are of perishable nature, or where
the seller expressly reserves the right of resale in case
the buyer has been in default in the payment of the
price for an unreasonable time, an unpaid seller
having a right of lien or having stopped the goods in
transitu may resell the goods. He shall not thereafter
be liable to the original buyer upon the contract of
sale or for any profit made by such resale, but may
recover from the buyer damages for any loss
occasioned by the breach of the contract of sale.
Where a resale is made, as authorized in this article,
the buyer acquires a good title as against the original
buyer.
It is not essential to the validity of a resale that notice
of an intention to resell the goods be given by the
seller to the original buyer. But where the right to
resell is not based on the perishable nature of the
goods or upon an express provision of the contract of
sale, the giving or failure to give such notice shall be
relevant in any issue involving the question whether
the buyer had been in default for an unreasonable
time before the resale was made.
It is not essential to the validity of a resale that notice
of the time and place of such resale should be given
by the seller to the original buyer.
The seller is bound to exercise reasonable care and
judgment in making a resale, and subject to this
requirement may make a resale either by public or
private sale. He cannot, however, directly or indirectly
buy the goods.
What are the ways of exercising the right of stoppage in
transitu under art. 1534?
 Through rescission – fourth right of an unpaid seller
granted by law
*NOTSURE*
What is article 1535?
 Subject to the provisions of this title, the unpaid
seller’s 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 thereto.
If however, a negotiable document of title has been
issued for goods, no seller’s 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 notification to the carrier, or other
bailee who issued such document, of the seller’s claim
to a lien or right of stoppage in transitu.
What is article 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 1198.
What is article 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 contract.
All fruits shall pertain to the vendee from the day on
which the contract was perfected.
What is article 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.
What is article 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 the quality
specified 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 upon.
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.
What is article 1540?
 If, in case of the preceding article, there is a greater
area or number in the immovable than that stated in
the contract, the vendee may accept the area
included in the contract and reject the rest. If he
accepts the whole area, he must pay for the same at
the contract rate.
What is article 1541?
 The provisions of the two preceding articles shall
apply to judicial sales.
What is article 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 that 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
specified 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.
Discuss Semira v. CA
FACTS:
1. From Gutierrez to An
Juana Gutierrez owned a parcel of land, later designated as Lot
4221, situated in Sto. Niño, Taysan, Batangas which she sold to
private respondent Buenaventura An for P850.00 by means of
a "Kasulatan ng Bilihan ng Lupa" executed on 4 January 1961.
Aside from the estimated area of 822.5 square meters
appearing in the deed of sale, the following boundaries of the
lot are also stated: on the north, by Taysan-Lobo-Sto. Niño-
Pinagbayanan and Sto. Niño-Dagatan Road (Junction or
Intersection road); on the east, by Sto. Niño-Pinagbayanan
Road and Juana Gutierrez; on the south, by Sto. Niño School
site; and, on the west, by Sto. Niño-Dagatan Road.
Thereafter, private respondent entered the premises
observing thereby the boundaries of the property and not the
area given.
2. An to Ramirez (nephew)
On 18 October 1972, private respondent sold Lot 4221 to his
nephew, Cipriano Ramirez, and spouse by means of another
"Kasulatan ng Bilihan ng Lupa" for P2,500.00, 3 where the lot
was described with the same area and boundaries mentioned
in the 4 January 1961 "Kasulatan ng Bilihan ng Lupa"
Like his uncle before him, Cipriano Ramirez occupied the lot by
observing the boundaries stated in the document of sale.
Subsequently, he applied for a new tax declaration to replace
the one in the name of his uncle but was denied in view of an
existing mortgage executed by Buenaventura An in favor of the
Taysan Rural Bank, which was only settled in 1979.
3. Ramirez to Semira
On 12 March 1979, Cipriano Ramirez sold the lot to petitioner
Miguel Semira for P20,000.00. However, the area stated in the
"Kasulatan ng Bilihan ng Lupa" 4 was 2,200 square meters and
not 822.5 appearing in the previous document. As delimited by
its boundaries, the lot is actually much bigger than 822.5
square meters. This was confirmed by the Taysan Cadastral
Mapping Survey conducted in 1974 where it is definitely stated
that the area of Lot 4221 is 2,200 square meters; hence, the
reason for the change.
4. Rice-mill and Complaint for FORCIBLE ENTRY
On 17 March 1979, Miguel Semira entered the very same
premises previously occupied by Ramirez and began the
construction of a new rice-mill. However, on 18 April 1979, a
complaint for forcible entry was filed against him by private
respondent in the Municipal Circuit Trial Court of Taysan-Lobo.
5 The latter claimed that the
area of Lot 4221 was 822.5 square meters only and that the
excess of 1,377 square meters forcibly occupied by petitioner
formed part of Lot 4215 which he acquired from the Hornillas
in 1964.
5. ISSUANCE OF CERTIFICATE OF TITLE
Meanwhile, during the pendency of the case, private
respondent applied for and was issued original Certificate of
Title No. P-12694 over the lots he purchased from the Hornillas
and that from Santiago Asi with a combined area of 19,606
square meters. However, the title was issued for 2 hectares, 8
ares and 33 centares or 20,833 square meters. No explanation
was given for the difference.
DECISION OF LOWER COURTS:
* municipal court of Taysan-Lobo (1979): dismissed for lack of
jurisdiction.
[since the issue of prior physical possession could not be
resolved without first deciding on the ownership, dismissal
was proper since forcible entry cases involve the sole issue of
prior physical possession]
* mtc (upon passage of BP 129 in 1981): petitioner Semira is
the owner.
[ "[m]etropolitan trial courts, municipal trial courts, and
municipal circuit trial courts, without distinction, may try cases
of forcible entry and detainer even if the question of
ownership is raised in the pleadings and possession could not
be resolved without deciding the ownership]
* RTC: reversed MTC.
[ it was not necessary to delve on the issue of ownership since
the question of prior physical possession could be resolved
independently, and that since petitioner admitted having
possessed the disputed area on 12 March 1979 while the
possession of private respondent began way back in 1964, the
latter clearly had prior possession.]
* CA: affirmed RTC.
Thus, present petition.
ISSUE:
May the issue of possession be decide independently of the
question of ownership?
HELD:
NO. issue of possession cannot be decide independently of the
question of ownership. MTC decision sustained.
where land is sold for a lump sum and not so much per unit of
measure or number, the boundaries of the land stated in the
contract determine the effects and scope of the sale, not the
area thereof. Hence, the vendors are obligated to deliver all
the land included within the boundaries, regardless of whether
the real area should be greater or smaller than that recited in
the deed. This is particularly true where the area is described
as "humigit kumulang," that is, more or less. These conclusions
are drawn from Art. 1542 of the Civil code which states —
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 are 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 specified 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.
Hence, when private respondent Buenaventura An sold Lot
4221 to his nephew Cipriano Ramirez by means of a "Kasulatan
ng Bilihan ng Lupa" which incorporated both the area and the
definite boundaries of the lot, the former transferred not
merely the 822.5 square meters stated in their document of
sale but the entire area circumscribed within its boundaries.
That the sale resulted in a disadvantage to private respondent
does not confer on him any cause of action against petitioner.
NOTE:
the case before us is merely an action for forcible entry and
that the issue of ownership was decided for the sole purpose
of resolving priority of possession. Hence, any pronouncement
made affecting ownership of the disputed portion is to be
regarded merely as provisional, hence, does not bar nor
prejudice an action between the same parties involving title to
the land.
Which between the boundaries and the area stated in
the title will define a parcel of land?
 That which really defines a piece of ground is not the
area, calculated with more or less certainty
mentioned in its description, but the boundaries
therein laid down as enclosing the land and indicating
its limits.
 Where the land is sold for a lump sum and not so
much per unit of measure or number, the boundaries
of the land stated in the contract determine the
effects and scope of the sale not the area thereof.
EXCEPT:
The rule is not applicable when the boundaries relied
upon do not identify the land beyond doubt. In which
case, the area stated in the title shall prevail.
What is article 1543?
 The actions arising from articles 1539 and 1542 shall
prescribe in six months, counted from the day of
delivery.
What are the rule of preference in double sale of
property under article 1544?
 If the same thing should have been sold to different
vendees, the ownership shall be transferred to the
person who may have first taken possession thereof
in good faith, if it should be movable property. (refers
to sales of movable or personal property)
Should it be immovable property, the ownership shall
belong to the person acquiring it who in good faith
first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall
pertain to the person who in good faith was first in
the possession; and, in the absence thereof, to the
person who represents the oldest title provided there
is good faith.
 Application of this article presupposes the existence
of 2 valid and binding contracts of sale.
Discuss radiowealth finance company vs. palileo.
FACTS: Defendant spouses Castro sold to plaintiff-appellee
Palileo (private respondent herein), a parcel of unregistered
coconut land situated in Surigao del Norte. The sale is
evidenced by a notarized Deed of Absolute Sale (Exh. “E”). The
deed was not registered in the Registry of Property for
unregistered lands. Since the execution of the deed of sale,
appellee Palileo exercised acts of ownership over the land
through his mother as administratrix or overseer. Appellee has
continuously paid the real estate taxes on said land from 1971
until the present.
A judgment was rendered against defendant Castro by the
then CFI to pay herein defendant-appellant Radiowealth
Finance Company (petitioner herein). Upon the finality of the
judgment, a writ of execution was issued. Pursuant to said writ,
defendant provincial Sheriff levied upon and finally sold at
public auction the subject land that defendant Enrique Castro
had earlier sold to appellee Palileo. A certificate of sale was
executed by the Provincial Sheriff in favor of defendant-
appellant Radiowealth Finance Company, being the only
bidder. After the period of redemption has (sic) expired, a deed
of final sale was also executed by the same Provincial Sheriff.
Both the certificate of sale and the deed of final sale were
registered with the RD.
Learning of what happened to the land, private respondent
Palileo filed an action for quieting of title over the same. After
a trial on the merits, the court a quo rendered a decision in his
favor. On appeal, the decision of the trial court was affirmed.
Hence, this petition for review on certiorari.
ISSUE: Who, as between two buyers of unregistered land, is
the rightful owner—the first buyer in a prior sale that was
unrecorded, or the second buyer who purchased the land in an
execution sale whose transfer was registered in the RD
HELD: PALILEO HAS THE SUPERIOR RIGHT OVER THE LAND
There is no doubt that had the property in question been a
registered land, this case would have been decided in favor of
petitioner since it was petitioner that had its claim first
recorded in the RD.
It must be stressed however that this case deals with a parcel
of unregistered land and a different set of rules applies. We
affirm the decision of the CA.
Under Act No. 3344, registration of instruments affecting
unregistered lands is “without prejudice to a third party with a
better right”. The aforequoted phrase has been held by this
Court to mean that the mere registration of a sale in one’s
favor does not give him any right over the land if the vendor
was not anymore the owner of the land having previously sold
the same to somebody else even if the earlier sale was
unrecorded.
Applying this principle, the CA correctly held that the execution
sale of the unregistered land in favor of petitioner is of no
effect because the land no longer belonged to the judgment
debtor as of the time of the said execution sale.

NOTES: Findings of fact of the CA are conclusive on this Court

and will not be disturbed unless there is grave abuse of
discretion. The finding of the CA that the property in question
was already sold to private respondent by its previous owner
before the execution sale is evidenced by a deed of sale. Said
deed of sale is notarized and is presumed authentic. There is
no substantive proof to support petitioner’s allegation that the
document is fictitious or simulated. With this in mind, We see
no reason to reject the conclusion of the CA that private
respondent was not a mere administrator of the property. That
he exercised acts of ownership through his mother also
remains undisputed.