What is Article 1489?
 All persons who are authorize in this Code to
obligate themselves, may enter into a contract of
sale, saving the modifications contained in the
following articles.
Where necessaries are sold and delivered to a
minor or other person without capacity to act, he
must pay a reasonable price therefor.
Necessaries are those referred to in article 290.
What are the kinds of incapacity?
 Absolute Incapacity – when the person can not
bind himself in any contract. The reason for his
incapacity may be his minority, insanity,
imbecility, prodigality or civil interdiction.
 Relative Incapacity – when a person cannot buy
a certain property because of a special
prohibition. A person cannot enter into a
contract of sale by reason of his/her relation to
the other party.
What are necessaries?
 Refer to all what is needed for the support of a
person, who need not be a minor.
 Family Code: Support comprises everything
indispensable for sustenance, dwelling, clothing,
medical attendance, education, and
transportation, in keeping with the financial
capacity of the family.
 Contracts entered into by minors are VOIDABLE
because consent is vitiated.
 If necessaries are delivered to the minor or to
any incapacitated person, without the
intervention of their parents, guardians or legal
representatives, the sale is considered VALID by
way of exception, and therefore, the one who
sold and delivered the necessaries must be paid
the reasonable value thereof.
What is Article 1490?
 The husband and the wife cannot sell property to
each other, except:
(1) When a separation of property was agreed
upon in the marriage settlements; or
(2) When there has been a judicial separation of
property under article 191.
What is the rationale for the prohibition?
 Prohibition is intended to:
(1) Prevent the stronger spouse from exploiting
the weaker spouse
(2) Prevent donations disguised as sales
(3) Protect third persons, specially creditors,
against fraud through the transfer of the
properties of one spouse to the other to
evade payment of obligations.
What is the consequence of violating Art. 1490?
 The executed by a spouse in favor of the other (if
it is not excused under any if the two exceptions)
is INEXISTENT and VOID from the beginning
because the contract is expressly prohibited by
law.
What is Article 1491?
 The following persons cannot acquire by
purchase, even at a public or judicial auction,
either in person or through the mediation of
another;
(1) The guardian, the property of the person or
persons who may be under this
guardianship;
(2) Agents, the property whose administration
or sale may have been entrusted to them,
unless the consent of the principal has been
given;
(3) Executors and administrators, the property
of the estate under administration;
(4) Public officers and employees, the property
of the State or of any subdivision thereof, or
of any government owned or controlled
corporation, or institution, the
administration of which has been entrusted
to them; this provision shall apply to judges
and government experts who, in any manner
whatsoever, take part in the sale;
(5) Justices, judges, prosecuting attorneys,
clerks of superior and inferior courts, and
other officers and employees connected
with the administration of justice, the
property and rights in litigation or levied
upon on execution before the court within
whose jurisdiction or territory they exercise
their respective functions; this prohibition
includes the act of acquiring by assignment
and shall apply to lawyers, with respect to
the property and rights which may be the
object of any litigation in which they take
part by virtue of the profession.
(6) Any others specially disqualified by law.
What is the consequence of violating Article 1491?
 A sale or assignment made in violation of
paragraphs 1, 2, or 3 is VOIDABLE; only private
interests are affected. May be ratified.
 A sale or assignment in violation of paragraphs 4,
5, or 6 is VOID AB INITIO; public interest is
involved. Cannot be ratified because the
contract is against public policy.
Discuss Macariola v. Asuncion.
Facts: When the decision in Civil Case No. 3010 rendered
by respondent Hon. Judge Elias B. Asuncion of Court of
First Instance of Leyte became final on June 8, 1863 for
lack of an appeal, a project of partition was submitted to
him which he later approved in an Order dated October
23, 1963. Among the parties thereto was complainant
Bernardita R. Macariola.
One of the properties mentioned in the project of
partition was Lot 1184. This lot according to the decision
rendered by Judge Asuncion was adjudicated to the
plaintiffs Reyes in equal shares subdividing Lot 1184 into
five lots denominated as Lot 1184-A to 1184-E.
On July 31, 1964 Lot 1184-E was sold to Dr. Arcadio
Galapon who later sold a portion of Lot 1184-E to Judge
Asuncion and his wife Victoria Asuncion. Thereafter
spouses Asuncion and spouses Galapon conveyed their
respective shares and interests in Lot 1184-E to the
Traders Manufacturing and Fishing Industries Inc.
wherein Judge Asuncion was the president.
Macariola then filed an instant complaint on August 9,
1968 docketed as Civil Case No. 4234 in the CFI of Leyte
against Judge Asuncion with "acts unbecoming a judge"
alleging that Judge Asuncion in acquiring by purchase a
portion of Lot 1184-E violated Article 1491 par. 5 of the
New Civil Code, Art. 14, pars. 1 and 5 of the Code of
Commerce, Sec. 3 par. H of R.A. 3019, Sec. 12 Rule XVIII
of the Civil Service Rules and Canon 25 of the Canons of
Judicial Ethics.
On November 2, 1970, Judge Jose Nepomuceno of the
CFI of Leyte rendered a decision dismissing the
complaints against Judge Asuncion.
After the investigation, report and recommendation
conducted by Justice Cecilia Munoz Palma of the Court of
Appeals, she recommended on her decision dated March
27, 1971 that Judge Asuncion be exonerated.
Issue: Does Judge Asuncion, now Associate Justice of
Court of Appeals violated any law in acquiring by
purchase a parcel of Lot 1184-E which he previously
decided in a Civil Case No. 3010 and his engagement in
business by joining a private corporation during his
incumbency as a judge of the CFI of Leyte constitute an
"act unbecoming of a judge"?
Ruling: No. The respondent Judge Asuncion's actuation
does not constitute of an "act unbecoming of a judge."
But he is reminded to be more discreet in his private and
business activities.
SC ruled that the prohibition in Article 1491 par. 5 of the
New Civil Code applies only to operate, the sale or
assignment of the property during the pendency of the
litigation involving the property. Respondent judge
purchased a portion of Lot 1184-E on March 6, 1965, the
in Civil Case No. 3010 which he rendered on June 8, 1963
was already final because none of the parties therein
filed an appeal within the reglementary period. Hence,
the lot in question was no longer subject to litigation.
Furthermore, Judge Asuncion did not buy the lot in
question directly from the plaintiffs in Civil Case No. 3010
but from Dr. Arcadio Galapon who earlier purchased
Lot1184-E from the plaintiffs Reyes after the finality of
the decision in Civil Case No. 3010.
SC stated that upon the transfer of sovereignty from
Spain to the US and later on from the US to the Republic
of the Philippines, Article 14 of Code of Commerce must
be deemed to have been abrogated because where there
is change of sovereignty, the political laws of the former
sovereign, whether compatible or not with those of the
new sovereign, are automatically abrogated, unless they
are expressly re-enacted by affirmative act of the new
sovereign. There appears no enabling or affirmative act
that continued the effectivity of the aforestated
provision of the Code of Commerce, consequently, Art.
14 of the Code of Commerce has no legal and binding
effect and cannot apply to the respondent Judge
Asuncion.
Respondent Judge cannot also be held liable to par. H,
Section 3 of R.A. 3019 because the business of the
corporation in which respondent participated had
obviously no relation or connection with his judicial
office.
SC stated that respondent judge and his wife deserve the
commendation for their immediate withdrawal from the
firm 22 days after its incorporation realizing that their
interest contravenes the Canon 25 of the Canons of
Judicial Ethics.
What is Article 1493?
 If at the time the contract of sale is perfected, the
thing which is the object of the contract has been
entirely lost, the contract shall be without any
effect.
But if the thing should have been lost in part
only, the vendee may choose between
withdrawing from the contract and demanding
the remaining part, paying its price in proportion
to the total sum agreed upon.
What is loss?
 A thing is considered 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 there has been material deterioration or
complete change in the nature of the thing that
destroys its utility, it is considered to have
perished.
What is Article 1494?
 Where the parties purport a sale of specific
goods, and the goods without the knowledge of
the seller have perished in part or have wholly or
in material part so deteriorated in quality as to
be substantially changed in character, the buyer
may at his option treat the sale:
(1) As avoided; or
(2) As valid in all of the existing goods or in so
much thereof as have not deteriorated, and
as binding the buyer to pay the agreed price
for the goods in which the ownership will
pass, if the sale was divisible.
What is Article 1495? vendee or the use by the vendee of his rights,
with the vendor’s consent, shall be understood
 The vendor is bound to transfer the ownership of as a delivery.
and deliver, as well as warrant the thing which is
the object of the sale. What is Article 1502?
What are the principal obligations of a vendor?  When the goods are delivered to the buyer “on
sale or return” to give the buyer an option to
(a) To transfer the ownership of the object of the return the goods instead of paying the price, the
sale which is effected by delivering it to the ownership passes to the buyer on delivery, but
vendee together with its accessions and he may revest the ownership in the seller by
accessories. The certificate of title in case the returning or tendering the goods within the time
property is reported must also be delivered. fixed in the contract, or, if no time has been
(b) To warrant the object sold against eviction and fixed, within a reasonable time.
against hidden defects.
(c) To preserve the thing with proper diligence (1) When goods are delivered to the buyer on
pending its delivery to the vendee. approval or on trial or on satisfaction, or
(d) To pay for the execution and registration of the other similar terms, the ownership therein
sale unless there is a contrary agreement. passes to the buyer;
What is Article 1496? (2) When he signifies his approval or acceptance
to the seller or does any other act adopting
 The ownership of the thing sold is acquired by the transaction;
the vendee from the moment it is delivered to (3) If he does not signify his approval or
him in any of the ways specified in articles 1497 acceptance to the seller, but retains the
to 1501, or in any other manner signifying goods without giving notice of rejection,
agreement that the possession is transferred then if a time has been fixed for the return of
from the vendor to the vendee. the goods, on the expiration of a reasonable
time. What is a reasonable time is a question
What is Article 1497? of fact.
 The thing shall be understood as delivered, when Distinguish between delivery on sale or return and
it is placed in the control and possession of the
sale on trial or approval, or satisfaction.
vendee.
BASIS ON SALE OR SALE ON
What is Article 1498?
RETURN APPROVAL
 When the sale is made through a public Condition This is subject Subject to a
instrument, the execution thereof shall be to a resolutory suspensive
equivalent to the delivery of the thing which is condition condition
the object of the contract, if from the deed the Premise It depends upon It depends upon
contrary does not appear or cannot clearly be the will of the the suitability,
inferred. buyer quality, or
character of the
With regard to movable property, its delivery goods.
may also be made by the delivery of the keys of Transfer of Immediately Does not
the place or depository where it is stored or kept. ownership passes to the immediately
buyer on pass to the
What is Article 1499? delivery. buyer. It passes
 The delivery of movable property may likewise only upon
be made by the mere consent or agreement of approval or
the contracting parties, if the thing sold cannot satisfaction of
be transferred to the possession of the vendee the buyer duly
at the time of the sale, or if the latter already had manifested
it in his possession for any other reason. after trial.
Revesting the Ownership is There is no
What is Article 1500? ownership in revested in the revesting of
the owner seller if the ownership
 There may also be tradition constitutum
buyer so because it is
possessorium.
decides. retained by the
What is Article 1501? seller until the
sale becomes
 With respect to incorporeal property, the absolute.
provisions of the first paragraph of article 1498 Risk of loss or Rests on the Risk remains in
shall govern. In any other case wherein said deterioration buyer before the seller while
provisions are not applicable, the placing of the the revestment the goods are
titles of ownership in the possession of the of ownership on trial.
Explain Article 1503.
 Where there is a contract of sale of specific
goods, the seller may, by the terms of the
contract, reserve the right of possession or
ownership in the goods until certain conditions
have been fulfilled. The right of possession or
ownership may be thus reserved
notwithstanding the delivery of the goods to the
buyer or to a carrier or other bailee for the
purpose of transmission to the buyer.
(1) Where goods are shipped, and by the bill of
lading the goods are deliverable to the seller
or his agent, or to the order of the seller or
of his agent, the seller thereby reserves the
ownership in the goods. But, if except for the
form of the bill of lading, the ownership
would have passed to the buyer on shipment
of the goods, the seller’s property in the
goods shall be deemed to be only for the
purpose of securing performance by the
buyer of his obligations under the contract.
(2) Where goods are shipped, and by the bill of
lading the goods are deliverable to order of
the buyer or of his agent, but possession of
the bill of lading is retained by the seller or
his agent, the seller thereby reserves a right
to the possession of the goods as against the
buyer.
(3) Where the seller of goods draws on the
buyer for the price and transmits the bill of
exchange and bill of lading together to the
buyer to secure acceptance or payment of
the bill of exchange, the buyer is bound to
return the bill of lading if he does not honor
the bill of exchange, and if he wrongfully
retains the bill of lading he acquires no
added right thereby. If, however, the bill of
lading provides that the goods are
deliverable to the buyer or to the order of
the buyer or is indorsed in blank, or to the
buyer by the consignee named therein, one
who purchases in good faith, for value, the
bill of lading, or goods from the buyer will
obtain the ownership in the goods, although
the bill of exchange has not been honored,
provided that such purchaser has received
delivery of the bill of lading indorsed by the
consignee named therein, or of the goods,
without notice of the facts making the
transfer wrongful.
ownership in the goods has been retained by
the seller merely to secure performance by
the buyer of his obligations under the
contract, the goods are at the buyer’s risk
from the time of such delivery;
(2) Where actual delivery has been delayed
through the fault of either the buyer or seller
the goods are at the risk of the party in fault.
Explain Article 1505.
 Subject to the provisions of this Title, where
goods are sold by a person who is not the owner
thereof, and who does not sell them under
authority or with the consent of the owner, the
buyer acquires no better title to the goods is by
his conduct precluded from denying the seller’s
authority to sell.
Nothing in this title, however, shall affect:
(1) The provisions of any factors’ acts, recording
laws, or any other provisions of law enabling
the apparent owner of goods to dispose of
them as if he were the true owner thereof;
(2) The validity of any contract of sale under the
statutory power of sale or under the order of
a court of competent jurisdiction;
(3) Purchases made in a merchant’s store, or in
fair, or markets, in accordance with the Code
of Commerce and special laws.
Explain Article 1506.
 Where the seller of goods has a voidable title
thereto, but his title has not been avoided at the
time of the sale, the buyer acquires a good title
to the goods, provided he buys them in good
faith, for value, and without notice of the seller’s
defect of title.

Explain Article 1504.

 Unless otherwise agreed, the goods remain at
the seller’s risk until the ownership therein is
transferred to the buyer but when the ownership
therein is transferred to the buyer the goods are
at the buyer’s risk whether actual delivery has
been made or not, except that:

(1) Where the delivery of the goods has been

made to the buyer or to a ballee for the
buyer, in pursuance of the contract and the