Art 1458 - Contract where the seller obligates himself to transfer the ownership of and

to deliver a determinate thing and the buyer to pay therefore a price certain in money
or its equivalent.

Is Declaration of Heirship and Waiver of Rights or an Affidavit of Waiver of Rights - is it

a SALE?

No - but if filed with the ROD - it operates as an Extra-judicial Settlement of Estate

between the Heirs under Rule 74, RC.

Absolute Incapacity v. Relative Incapacity

Can a husband and wife sell property to each other during the marriage? - IT DEPENDS
- Complete Separation of Property OR Judicial Separation of Property

Discuss - Specific v. Generic.

Future inheritance - Not a valid subject matter of a contract of sale – INCHOATE

Future goods? DISTINGUISH - EMPTIO RES SPERATAE and EMPTIO SPEI

FUTURE GOODS - are considered subject to a SUSPENSIVE CONDITION.

If the stated consideration in the DOS had not been paid - sale is NULL AND VOID - due
to total lack of consideration

ELEMENTS:

Essential Elements

Consent – meeting of minds between the seller and the buyer

CAPACITY TO BUY OR SELL

Who can enter into a contract of sale?

ALL persons who are authorized to obligate themselves may enter into a contract of
sale.

KINDS OF INCAPACITY TO ENTER INTO A CONTRACT OF SALE

Absolute Incapacity – exists when the person involved cannot bind himself

e.g.
i. Minors,

ii. Insane and Demented Persons, and

iii. Deaf-mutes who do not know how to write.

- Contracts entered into will be considered VOIDABLE due to lack of capacity to give
valid consent.

Relative Incapacity – exists with respect to persons who generally can give consent
to a contract EXCEPT in reference to certain persons or certain properties.

e.g.

Husband and wife

Persons incapacitated by reason of their relation to property; and

Aliens

Incapacity of Husband and Wife:

General Rule: CANNOT sell property to each other

Exceptions:

1. When there is COMPLETE SEPARATION of PROPERTY REGIME

- properties acquired BEFORE and AFTER the marriage are considered EXCLUSIVE
PROPERTIES .

2. When there is JUDICIAL SEPARATION OF PROPERTY

* Judicial Separation of Property is incidental in cases of ANNULMENT OF

MARRIAGE, DECLARATION OF NULLITY OF MARRIAGE, DISSOLUTION OF PROPERTY
RELATIONS, LEGAL SEPARATION

 
Persons incapacitated by reason of their relation to property– THEY CANNOT
PURCHASE in PUBLIC OR JUDICIAL AUCTION. REASON? Public Policy

N.B. STATUS of the SALE in violation of this RULE is VOIDABLE only.

(GAPEJA) – they are PROHIBITED only with RESPECT TO PROPERTIES under their
control or supervision

Guardians

Agents

Public officers and employees

Executors and Administrators

Justices, Judges, prosecuting attorneys, clerks of court, judicial officers including

lawyers

Any other especially disqualified by law e.g. Aliens

* Aliens CANNOT buy REAL PROPERTY EXCEPT RESIDENTIAL CONDOMINIUM

APARTMENT. But the TOTAL OWNERSHIP of the ALIENS in the Condominium
Corporation should NOT EXCEED 40%

OBJECT or SUBJECT MATTER

Thing –

Determinate or if not at least determinable (Art. 1460) (It can be made specific without
the necessity of executing a new contract);

It should be licit (not contrary to law, morals, good customs, public order or public
policy and not outside the commerce of men and not impossible);

ILLICIT OBJECTS:
PER SE (of its Nature)

Sale of human flesh

Sale of human parts

PER ACCIDENS (made illegal by provision of law)

Sale of land to an ALIEN

N.B. If the object is ILLICIT the sale is NULL and VOID – hence it CANNOT be
RATIFIED.

Vendor should have the right to transfer ownership thereof, at the time it is
delivered (Art. 1459). Delivery as proof of transfer of ownership. OWNERSHIP IS
TRANSFERRED BY DELIVERY NOT BY THE PERFECTION OF THE CONTRACT.

Tradition or Kinds of Delivery – discuss

Actual – physical transfer of the object

Constructive – when actual is not possible.

Traditio Symbolica

Traditio Longa Manu

Traditio Brevi Manu

Traditio Constitutum Possessorium

Tradition through the execution of certain legal documents

Quasi-traditio – used to transfer intangible objects (those without physical existence)

The THING may be PRESENTLY EXISTING or will still exist in the FUTURE.
* FUTURE THINGS – things which will be acquired, printed, manufactured or
purchased in the future. Subject to a SUSPENSIVE CONDITION. If it did not
happen – NO VALID SALE since there is NO OBJECT or SUBJECT MATTER.

Emptio Spei – sale of a mere HOPE or EXPECTANCY.

Vain HOPE or EXPECTANCY? – VOID.

b. Emptio Rei Speratae – sale of things with POTENTIAL EXISTENCE – future things
or future goods

e.g. mango fruits – still flowers in the tree but are already being sold as mango fruits

N.B. If sale of FUTURE GOODS depends upon a SUSPENSIVE CONDITION (Art.

1462) – there can also be the sale of GOODS SUBJECT to RESOLUTORY
CONDITION (Art 1465) – Pacto de Retro Sale or Sale with a Right to Repurchase.

* While FUTURE PROPERTIES may be sold – it is ABSOLUTE that FUTURE

PROPERTIES cannot be DONATED.

Things subject to a RESOLUTORY condition may be the object of a CONTRACT of SALE

Property subject to RESERVA TRONCAL

Property reserved for future heir

A usufruct which may end upon the happening of a condition

Sale of the right of redemption

Right

It should be transmissible in character.

* Rights are intransmissible by

(a) provision of law e.g. right to vote,

(b) stipulation of parties,

(c) personal in character e.g. right to attend ones wedding.

The RIGHT of REDEMPTION in a PACTO DE RETRO SALE or SALE WITH RIGHT TO

REPURCHASE is TRANSMISSIBLE.

A USUFRUCT may also be sold (Usus – Fructus)

The sole owner of a thing may sell an undivided interest therein. (Art 1463)

e.g. A sells the entire parcel of land to B.

A sells a distinct portion of the land identified by its metes and bounds to B.

A sells an undivided one-half interest in his land to B – until division they are considered
as CO-OWNERS. Co-ownership may validly exist for 10 years.

In the case of fungible goods, there may be a sale of an undivided share of a

specific mass, though the seller purports to sell and the buyer to buy a definite
number, weight or measure of the goods in the mass, and though the number, weight
or measure of the goods in the mass is undetermined. By such a sale the buyer
becomes owner in common of such share of the mass as the number, weight
or measure bought bears to the number, weight or measure of the mass. If
the mass contains less than the number, weight or measure bought, the buyer
becomes the owner of the whole mass and the seller is bound to make good
the deficiency from goods of the same kind and quality, unless a contrary intent
appears. (Art 1464)

SERVICE is NOT A VALID object – tantamount to INVOLUNTARY SERVITUDE.

Service is VALID OBJECT in a Lease of Service but not in Contract of Sale.

CAUSE OR CONSIDERATION – is the price which must be CERTAIN in money or its

equivalent (Negotiable Instruments).
It must be CERTAIN

1. If the parties have agreed on a definite amount for the sale;

2. When made with reference to another thing certain;

3. Determination thereof is left to the judgment of a specified person or persons – IF

NOT FIXED – inefficacious – unless the parties subsequently agree upon the price. If
acted in BAD FAITH or MISTAKE – courts may fix the price. E.g. Corporation Law –
Appraisal Right of S/H if they cannot agree on the price – it can be fixed by an
INDEPENDENT APPRAISER.

* Price of Securities, Grains, Liquids – CERTAIN?

a. When the price fixed is that which the thing sold would have on a definite day on
a particular exchange or market;

E.g. Price of the SS of ABC Corp that A sold is the same as the price of Common SS of
XYZ Corp on January 30, 2015.

When the price fixed is that which the thing sold would have on a particular
exchange or market;

E.g. Price of the Common SS of ABC Corp that A sold is the price determined by PSE on
January 30, 2015.

An amount is fixed above or below the price on such day or in such exchange or market

E.g. Price of the Common SS of ABC Corp that A sold is ONE PESO higher or lower that
the price determined by PSE on January 30, 2015.

N.B. If the price cannot be fixed using the above-outlined rules, there can be NO
PERFECTED CONTRACT OF SALE. But if the thing or any part thereof has been
delivered to and appropriated by the buyer, he must pay a reasonable price
therefore. What is a reasonable price is a question of fact dependent on the
circumstances of each particular case. (Art 1474) Basis? Solutio Indebitii

Gross Inadequacy of Price (LESION) does not affect sale EXCEPT if indicates defect
of consent or that the parties really intended a donation (Art 1470). E. g. inadequacy
of the price of was obtained through fraud, violence, intimidation etc. – VICES OF
CONSENT.

Judicial sales? Lesion will not affect validity BUT if the price is so
INADEQUATE as to SHOCK THE CONSCIENCE OF THE COURT – then the court
can set aside the sale

Simulated Price (feigned or pretended price) – void but it may be proven that the
contract is really a donation or some other act or contract. (Art 1471)

Fixing of price as RULE cannot be left to one of the contracting parties – but if the other
party will subsequently agree – and price is accepted by the other – sale is perfected.
(Art 1308 and 1473)

If NO price is fixed? No contract of sale and the parties will have no obligations to each
other. HOW ABOUT if there was already partial delivery? SHOULD PAY REASONABLE
PRICE thereof. It refers to market value at the time and place of delivery.

Fixing of price as RULE cannot be left to one of the contracting parties – but if the other
party will subsequently agree – and price is accepted by the other – sale is perfected.

If NO price is fixed? No contract of sale and the parties will have no obligations to each
other. HOW ABOUT if there was already partial delivery? SHOULD PAY REASONABLE
PRICE thereof. It refers to market value at the time and place of delivery.