ARTICLE 1489.

All persons who are authorized in this Code to obligate themselves, may enter into a
contract of sale, saving the modifications contained in the following articles. Where necessaries are
those 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.

EXPLANATION:

All persons, whether natural/juridical, who can bind themselves have also legal capacity to buy & sell.
Exceptions: When law determines that a party suffers from either absolute or relative incapacity.

Absolute incapacity – exists in case of persons who cannot bind themselves (e.g. minors, insane or
demented persons)

Ralative incapacity – exists only w/ reference to certain persons or a certain class of prop Necessaries –
those things w/c are needed for sustenance, dwelling, clothing, medical attendance, education &
transportation according to the financial capacity of the family of the incapacitated person

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. (1458a)

EXPLANATION:

Prohibition also applies to common-law relationships.

Persons allowed to question such sale:

1. Those who bear such relation to the parties making the transfer or to the prop itself that such transfer
interferes w/ their rights or interests.

2. The government

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 his guardianship;

(2) Agents, the property whose administration or sale may have been intrusted 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
intrusted 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 an 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 may take part
by virtue of their profession;

(6) Any others specially disqualified by law. (1459a)

EXPLANATION:

Pars. 1-3 = unenforceable, capable of ratification (b/c it involves private interests)

Pars. 4-6 = void (b/c it involves public interests)

No. 2 not absolute, agent may buy the prop intrusted unto him if:

1. The agency has been terminated

2. His principal gives consent

3. The sale was made under a special power pursuant to a special law (read: Fiestan v CA)

No.3 refers only to props under the administration of the executor or administrator at the time of the
acquisition. Executor may purchase the hereditary rights of any heir, since they do not administer such
rights.

No.4 refers only to props:

1. Belonging to the Sate, or of any subdivision thereof, or of any gocc or institution

2. The admin of w/c has been entrusted to PO/Es.

For no. 5 to operate, sale or assignment must take place during the pendency of the litigation involving
the prop. A prop is “in litigation” from the moment it becomes subject to judicial action.

ARTICLE 1492. The prohibitions in the two preceding articles are applicable to sales in legal redemption,
compromises and renunciations. (n)

EXPLANATION:
Compromise – amicable settlement of a (legal) controversy

Renunciation – condonation (remember obli, read 1270-1274 kung trip mo)

CHAPTER 3

Effects of the Contract When the Thing Sold Has Been Lost.

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. (1460a)

EXPLANATION:

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 a 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. (n)

EXPLANATION:

CHAPTER 4

Obligations of the Vendor

SECTION 1

General Provisions

ARTICLE 1495. The vendor is bound to transfer the ownership of and deliver, as well as warrant the thing
which is the object of the sale. (1461a)
EXPLANATION:

ARTICLE 1496. The ownership of the thing sold is acquired by the vendee from the moment it is
delivered to him in any of the ways specified in articles 1497 to 1501, or in any other manner signifying
an agreement that the possession is transferred from the vendor to the vendee. (n)

EXPLANATION:

Ways of effecting delivery:

(1) Actual or real delivery (1497);

(2) Constructive or legal delivery (1498-1501); or

(3) Any other manner signifying an agreement that the possession is transferred to the vendee. (1496-
1499)

Delivery must be made to vendor or his authorized representative, if any.

Constructive delivery – a gen’l term comprehending all those acts w/c, although not conferring phys’l
possession of the thing, have been held by construction of law equivalent to acts of real delivery.

Ways of effecting constructive delivery:

Execution of a public instrument (1498, par. 1);

Symbolic tradition or tradition symbolica (1498, par. 2);

Traditio Longa Manu (1499, par. 1);

Traditio Brevi Manu (1499, par. 2);

Traditio Constitutum Possessorium (1500);

Quasi-traditio or quasi-delivery (1501).

In all forms of delivery, it is necessary that the act be coupled w/ the intention of delivering the thing.
For the same reason, any act, although not provided for in the preceding arts, but accompanied by the
evident intention of the vendor to deliver or of the vendee to receive the thing sold, will be considered
as constituting tradition. It is the intention w/c is essential.

SECTION 2

Delivery of the Thing Sold

ARTICLE 1497. The thing sold shall be understood as delivered, when it is placed in the control and
possession of the vendee. (1462a)

EXPLANATION:

Tradition is a derivative mode of acquiring ownership by virtue of w/c one who has the right & intention
to alienate a corporeal thing, transmits it by virtue of a just title to one who accepts the same.

Ownership is not transferred by contract merely but by delivery, actual or constructive. Contracts only
constitute title or rights to the transfer or acquisition of ownership, while delivery or tradition is the
method of accomplishing the same. Note however, that the parties to the contract may agree when &
on what conditions the ownership in the subject of the contract shall pass to the buyer.

Delivery of thing sold + payment of purchase price = consummation of contract of sale. Since perfection
≠ consummation, delivery is not essential to the perfection of the contract of sale.

Remedies of buyer if seller fails to deliver:

Specific performance

Rescission, w/ damages

ARTICLE 1498. When the sale is made through a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary
does not appear or cannot clearly be inferred.

With regard to movable property, its delivery may also be made by the delivery of the keys of the place
or depository where it is stored or kept. (1463a)

EXPLANATION:

1st par applies both to movable & immovable prop.

Delivery here is only PRESUMPTIVE & can be rebutted by evidence to the contrary.

A seller cannot deliver constructively if he cannot actually deliver even if he wants to.

In order to bind 3rd parties to the sale, the public instrument needs to be recorded in the

Register of Deeds & a certificate of title must be issued in the name of the buyer over the prop. But, as
b/w the buyer & seller, the execution of the public instrument is enough to bind the 2 of them.

Symbolic tradition – when parties, to effect delivery, make use of a token symbol to represent the thing
delivered. (e.g. Delivery of car keys)
ARTICLE 1499. The delivery of movable property may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the
vendee at the time of the sale, or if the latter already had it in his possession for any other reason.
(1463a)

EXPLANATION:

Traditio Longa Manu – takes place by mere consent or agreement of the contracting parties IF the thing
sold cannot be transferred to the possession of the vendee at the time of the sale

Traditio Brevi Manu – happens when the vendee has already the possession of the thing sold by virtue
of another title (e.g. Lessor sells thing leased to lessee)

ARTICLE 1500. There may also be tradition constitutum possessorium. (n)

EXPLANATION:

Traditio Constitutum Possessorium – takes place when the vendor continues in possession of the prop
sold not as owner but in some other capacity. (e.g. A sells his land to B.

Instead of delivering the land to B, A continues to occupy the land as B’s tenant.)

ARTICLE 1501. With respect to incorporeal property, the provisions of the first paragraph of article 1498
shall govern. In any other case wherein said provisions are not applicable, the placing of the titles of
ownership in the possession of the vendee or the use by the vendee of his rights, with the vendor's
consent, shall be understood as a delivery. (1464)

EXPLANATION:

Quasi-traditio – delivery of incorporeal things thru:

- Execution of a public instrument;

- If (1) is inapplicable, the placing of titles of ownership in the possession of the vendee; or

- Allowing vendee to use his rights as new owner w/ the consent of the vendor.

ARTICLE 1502. When goods are delivered to the buyer "on sale or return" to give the buyer an option to
return the goods instead of paying the price, the ownership passes to the buyer on delivery, but he may
revest the ownership in the seller by returning or tendering the goods within the time fixed in the
contract, or, if no time has been fixed, within a reasonable time. (n)

When goods are delivered to the buyer on approval or on trial or on satisfaction, or other similar terms,
the ownership therein passes to the buyer:
(1) When he signifies his approval or acceptance to the seller or does any other act adopting the
transaction;

(2) If he does not signify his approval or acceptance to the seller, but retains the goods without giving
notice of rejection, then if a time has been fixed for the return of the goods, on the expiration of such
time, and, if no time has been fixed, on the expiration of a reasonable time. What is a reasonable time is
a question of fact. (n)

EXPLANATION:

Sale or Return – a contract by w/c prop is sold but the buyer, who becomes the owner of the prop on
delivery, has the option to return the same to the seller instead of paying the price. If buyer does not
return w/in the time fixed in the contract, or if no time has been fixed, w/in reasonable time, sale is
absolute & he is liable to pay the seller.

Sale on Trial or Approval – a contract in the nature of an option to purchase if the goods prove
satisfactory, the approval of the buyer being a condition precedent.

*Buyer cannot accept part & reject the rest of the goods.

In both cases, if the goods are injured or damaged substantially thru the negligence or misuse of the
buyer, his right to return is lost & the sale becomes absolute.

ARTICLE 1503. When 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.

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.

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.

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. (n)

EXPLANATION:

GEN’L RULE: ownership in the goods sold passes to the buyer upon their delivery to the carrier. This is so
b/c the carrier is presumed to be a bailee for the buyer.

EXCEPTIONS: 1st, 2nd, & 3rd pars of 1503

Bakit di kasama yung 4th paragraph? B/c it talks about transmission of the Bill of Lading (BoL) w/ a Bill of
Exchange (BoE) & not delivery of goods to a carrier or bailee

*Bill of Lading - A docu acknowledging the receipt of goods by a carrier or by the shipper's agent & the
contract for the transportation of those goods; a docu that indicates the receipt of goods for shipment &
that is issued by a person engaged in the business of transporting or forwarding goods.

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 delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of
the contract and the 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. (n)

EXPLANATION:

This provision states 2 exceptions to the principle of Res Perit Domino. In the 1st par, the owner is the
seller but merely to secure the performance of the buyer of his oblis.

In this par, the buyer is the one who bears the risk. In the 2nd par, the risk of loss is borne by the party
at fault.

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 than the seller had, unless the owner of 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' act, recording laws, or any other provision 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 statutory power of sale or under the order of a court of
competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with the Code of
Commerce and special laws. (n)

EXPLANATION:

Gen’l rule: Buyer cannot acquire more rights than the seller had

Exceptions: (in these cases, the buyer’s right to the prop is better than the owner, provided he is in GF)

1. Owner is estopped from denying seller’s authority to sell

2. Where the law enables the apparent owner to dispose of the goods as if he were the true owner
thereof

3. Where the sale is sanctioned by statutory or judicial authority

4. Where the sale is made at merchant’s stores, fairs or markets

5. When the seller has a voidable title w/c has not been avoided at the time of the sale

6. Where seller subsequently acquires title

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. (n)

EXPLANATION:

Requisites for acquisition of good title by buyer:

1) The seller’s voidable title is yet to be avoided;

2) Buyer buys in good faith & for value;

3) Buyer has no notice of the seller’s defect of title.

If the seller has NO title, then a buyer, even if he purchases in GF & for value, cannot acquire a good
title. Read the notes for the preceding article, specifically 559 & the Dizon v Suntay doctrine.