Professional Documents
Culture Documents
thereof at the time it is delivered. 1. It must be determinate things illicit per accidens
2. It must be licit
3. It must be w/in the commerce of men *When the thing is sold in violation of a right of 1 st refusal of another person, the sale is
4. As to rights, it must be transmissible or personal valid but rescissible
Seller need not own the thing to be sold, all that is required of him is the right to transfer
ownership thereof at the time it is delivered.
1460. A thing is determinate when it is particularly designated or physically segregated from all others of the same class. *Relate w/ Art. 1349, CC
1461. Things having a potential existence may be the object of the contract of sale. ‘Things having a potential existence’ – something that is reasonably certain to come into existence as the natural increment or usual incident of something in existence already
The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition belonging to the seller
that the thing will come into existence. - The moment the thing does come into existence, title is vested upon the buyer.
The sale of a vain hope or expectancy is void.
1462 does not apply if the goods are to be manufactured ESPECIALLY for the buyer, b/c that case is a contract for a piece of work & not of sale.
1463. The sole owner of a thing may sell an undivided interest therein. Legal effect of the sale of an undivided interest in a thing is to make the buyer a co-owner in the thing sold
1464. 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 & the Fungible goods – goods of w/c any unit is, from its nature or by mercantile usage, treated as the equivalent of any other unit
buyer to buy a definite number, weight or measure of the goods in the mass, & though the number, weight or measure of the goods in
the mass is undetermined. By such sale the buyer becomes owner in common of such a share of the mass as the number, weight or Owner of mass may sell only an undivided share thereof, provided the mass is specific or capable of being made determinate.
measure bought bears to the number, weight or measure of the mass. If the mass contains less than the number, weight or measure
- By such sale, buyer becomes a co-owner of the seller of the whole mass in proportion in w/c the definite share bought bears to the
bought, the buyer becomes the owner of the whole mass & the seller is bound to make good the deficiency from goods of the same kind mass
& quality, unless a contrary intent appears.
- Aliquot share of each owner can be determined only by the measurement of the entire mass. If it turns out that the whole mass is
actually LESS than the thing sold, the buyer becomes the owner of the whole mass & the seller must supply the deficiency.
1465. Things subject to a resolutory condition may be the object of the contract of sale. *Resolutory condition – an uncertain event upon the happening of w/c the obli (or right) subject to it is extinguished.
1466. In construing a contract containing characteristics of both the contract of sale & of By the contract of agency, a person binds himself to render some service or to do Read: Quiroga v Parsons
the contract of agency to sell, the essential clauses of the whole instrument shall be something in representation or on behalf of another, w/ the consent or authority of the
considered. latter. (1868, CC)
Atty. Busmente: Is there a case wherein a contract is both a contract of sale & a
contract of agency to sell at the same time?
Sale Agency Transaction b/w car dealerships & manufacturers. The dealers will own the cars sold by
Buyer receives the goods as owner Agent receives the goods as the goods of the manufacturers but are still able to give the warranties of the manufacturers when
the principal who retains ownership over they sell the cars in turn.
them & has the right to fix the price &
terms of the sale & receive the proceeds
less the agent’s commission upon the
sales made
Buyer has to pay the price Agent simply has to account for the
proceeds of the sale he may make on the
principal’s behalf
Buyer, generally, cannot return the object Agent can return the object in case he is
sold unable to sell the same to a 3rd person
Seller warrants the thing sold Agent makes no warranty for w/c he
assumes personal liability as long as he
1470. Gross inadequacy of price does not affect a contract of sale, except as it may Inadequacy of price however, may indicate a defect in the consent such as when fraud, mistake or undue influence is present. Read arts. 1355 & 1381, pars 1 & 2
indicate a defect in the consent, or that the parties really intended a donation, or some
other act or contract. Where the price is so low that ‘a man in his senses & not under a delusion’ would not accept it, the sale may be set aside.
1471. If the price is simulated, the sale is void, but the act may be shown to have been in Simulation – occurs when an apparent contract is a declaration of a fictitious will 1345. Simulation of a contract may be absolute or relative. The former takes place
reality a donation, or some other act or contract. deliberately made by agreement of the parties, in order to produce, for the purpose of when the parties do not intend to be bound at all; the latter when the parties conceal
deception, the appearance of a juridical act w/c does not exist or is different from that w/c their true agreement.
was really executed.
1409. The ff contracts are inexistent & void from the beginning:
Norkis Distributors v CA: “In all forms of delivery, it is necessary that the act of delivery
whether constructive or actual, be coupled w/ the intention of delivering the thing.
The act, w/o the intention, is insufficient.”
1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser *Gen’l rule is 1477. 1478 works only if there is a stipulation to that effect. (Read: EDCA Publishing v. Santos)
until he has fully paid the price.
1479. A promise to buy & sell a determinate thing for a price certain is reciprocally A unilateral promise of offer to sell or to buy a thing w/c is not accepted creates no Art 1324, CC. When the offeror has allowed the offeree a certain period to accept, the
demandable. juridical effect or legal bond. AKA Policitacion. offer may be w/drawn at any time before acceptance by communicating such
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is w/drawal except when the option is founded upon a consideration, as something paid
binding upon the promissor if the promise is supported by a consideration distinct from or promised.
Option – a contractual privilege existing in one person for w/c he has paid a consideration
the price. w/c gives him the right to buy/sell from/to another person, if he chooses, at any time w/in
the agreed period at a fixed price, or under, or in compliance w/ certain terms & Atkins v Cua Hian Tek: “If the option is given w/o consideration, it is a mere offer of a
conditions. contract of sale, w/c is not binding until accepted. If, however, acceptance is made
before a w/drawal, it constitutes a binding contract of sale, even though the option
was not supported by a sufficient consideration.”
Nature of Option Contract:
1. Preparatory contract separate & distinct from the main/principal contract.
2. Gives one party to the right to decide whether or not to enter into principal contract, Sanchez v Rigos: “1354 (presumption of cause) applies to contracts in gen’l, whereas
while it binds the other: a) not to enter into the principal contract w/ any other person the 2nd par of 1479 refers to ‘sales’ in particular, &, more specifically, to ‘an accepted
during the agreed time; & b) to enter into the principal contract w/ the party to whom unilateral promise to buy or to sell.’
the option was granted if the latter should decide to use the option w/in the agreed In order that said promise may be made ‘binding upon the promissor’, 1479 requires
period. the concurrence of a condition, namely, that the promise be ‘supported by a
3. It imposes no binding obli on the person holding the option aside from the consideration consideration distinct from the price.’ Accordingly, the promisee cannot compel the
for the offer. promissor to comply w/ the promise, UNLESS the former establishes the existence of
4. Must be supported by a consideration distinct from the price (in order to bind the said distinct consideration. In other words, the promisee has the burden of proving
promissor the oblis stated in No.2), else it is void. (read: Atkins v Cua Hian Tek, Sanchez v such consideration.”
Rigos, Sps. Trinidad v IAC)
5. Consideration need not be money or actual cash. It must be something of value though. Equatorial v Mayfair: “Where a period is given to the offeree w/in w/c to accept the
(read: Serra v CA & RCBC) offer, the ff rules gen’lly govern:
1. If the period is NOT ITSELF FOUNDED UPON OR SUPPORTED BY A CONSIDERATION,
the offeror is still free & has the right to w/draw the offer before its acceptance, or if
Option Contract Right of 1st Refusal an acceptance has been made, before the offeror’s coming to know of such fact, by
Promissor cannot sell the prop to a 3 rd Promissor cannot sell the prop to a 3rd communicating that w/drawal to the offeree.
person UNLESS the period agreed upon person UNLESS he allows the promisee to 2. If the period HAS A SEPARATE CONSIDERATION, a contract of ‘option’ is deemed
the option contract expires exercise his right of 1st refusal, i.e. giving perfected, & it would be a breach of that contract to w/draw the offer during the
the promisee a similar offer, allowing the agreed period. The option, however, is an independent contract by itself; & is to be
latter to choose whether or not to accept distinguished from the projected main agreement w/c obviously yet to be
such offer concluded. If, in fact, the optioner-offeror w/draws the offer before its acceptance
Promisee may compel promissor to enter Promisee cannot compel promissor to by the optionee-offeree, the latter may not sue for specific performance on the
into principal contract if he decides to enter into principal contract since right of proposed contract since it has failed to reach its own stage of perfection. The
exercise the option w/in the agreed 1st refusal arises only when promissor optioner-offeror, however, renders himself liable for damages for breach of the
period decides to sell option.”
If promisee elects to buy, the price of the If promisee elects to buy, the price is
object of sale is FIXED subject to negotiations Right of 1st Refusal - 1. A potential buyer's contractual right to meet the terms of a 3 rd
The consideration is DISTINCT from the Usually found in contracts of lease, the party's higher offer. -For example, A has a right of 1 st refusal on the purchase of B’s
purchase price consideration is INTEGRAL in the contract house, C then offers to buy the house for P1M, then A can match this offer & prevent C
Sale to a 3rd person in violation of Option: Sale to a 3rd person in violation of Right of from buying it. (Black’s Law Dictionary – 9th Ed.)
rd
a. is Valid IF 3 person is in GF. Buyer 1st Refusal is RESCISSIBLE
may only hold seller liable for
damages;
b. is Rescissible (by original buyer) if 3rd
person is in BF
Read: Equatorial v Mayfair
1480. Any injury to or benefit from the thing sold, after the contract has been perfected, Who bears the loss:
from the moment of the perfection of the contract to the time of delivery, shall be 1. Before perfection – seller (in accordance w/ res perit domino)
governed by Arts 1163 to 1165, & 1262. 2. At the time of perfection – contract is void & inexistent, therefore seller (1493)
This rule shall apply to the sale of fungible things, made independently & for a single price, 3. After perfection, before delivery – if basis is 1480, buyer, regardless w/n ownership has been transferred (note the exception in the 3 rd par of this Art, there has to be delivery
or w/o consideration of their weight, number, or measure. before the buyer can be made liable if things sold are fungible things for a price according to weight, number or measure). But if 1504, seller, if ownership is yet to be transferred.
Should fungible things be sold for a price fixed accdg to weight, number or measure, the If ownership has been transferred, buyer.
risk shall not be imputed to the vendee until they have been weighed, counted, or 4. After delivery – buyer
measured, & delivered, unless the latter has incurred in delay.
Atty. Busmente: 1480 v 1504. I don’t know w/c should prevail over the other. If your client is the seller, use 1480. If it’s the buyer, 1504. *Read
De Leon’s discussion of 1480 v 1504. Lumabas siya sa 2009 Sales Midterms ni Sir.
1481. In the contract of sale of goods by description or by sample, the contract may be Sale by description – occurs where a seller sells things as being of a particular kind, the buyer not knowing whether the seller’s representations are true or false, but relying on them
rescinded if the bulk of the goods delivered do not correspond w/ the description or the as true
sample, & if the contract be by sample as well as by description, it is not sufficient that the
bulk of goods correspond w/ the sample if they do not also correspond w/ the description. Sale by sample – to constitute a sale by sample, it must appear that the parties contracted solely w/ reference to the sample, w/ the understanding that the bulk was like it.
The buyer shall have a reasonable opportunity of comparing the bulk w/ the description or
the sample.
‘Bulk of goods’ in this art = goods to be actually sold
1482. Whenever earnest money is given in a contract of sale it shall be considered as part Earnest money – something of value given by the buyer to the seller to show that the buyer is really in earnest, & to bind the bargain.
of the price & as proof of the perfection of the contract. Earnest money forms part of the consideration ONLY IF the sale is PERFECTED & the sale is CONSUMMATED upon full payment of the purchase price. Earnest
money constitutes an advance or down payment & must therefore be deducted from the total price.
Registration of a public instrument in the registry of deeds is not indispensible as regards the contracting parties. However, doing so would bind 3 rd parties to the contract & protect
the buyer against claims of 3rd persons arising from subsequent alienations by the vendor.
1484. In a contract of sale of personal prop the price of w/c is payable in installments, the Remedies are alternative; election of one is a waiver of the right to resort to the others. Southern Motors v Moscoso:
vendor may exercise any of the ff remedies: Only the exercise of one of these remedies will serve as a bar to the others. Foreclosure incident to 1st remedy Foreclosure of chattel mortgage (3rd
1. Exact fulfillment of the obli, should the vendee fail to pay; remedy)
2. Cancel the sale, should the vendee’s failure to pay cover 2 or more installments. If seller chooses option 2, the buyer may demand the return of the installments unless Procedure is those prescribed for Procedure is outlined in §14 of Chattel
3. Foreclose the chattel mortgage on the thing sold, if one has been constituted, there is a stipulation effecting forfeiture (read 1486). ordinary civil actions, under the RoC Mortgage Law
should the vendee’s failure to pay cover 2 or more installments. In this case, he shall
have no further action against the purchaser to recover any unpaid balance of the price.
Any agreement to the contrary shall be void. The RULES APPLY to: Pascual v Universal Motors Corp: Sellers cannot go after guarantors if they have
(AKA RECTO Law) 1. The SALE of PERSONAL PROP, w/c is PAYABLE IN INSTALLMENTS already chosen 3rd remedy. B/c if they did, guarantors would have a right to go after
2. The LEASE of PERSONAL PROP, w/ OPTION TO BUY, & the LESSOR has DEPRIVED THE the original debtors, w/c would result in the situation the law seeks to prevent (double
LESSEE of the POSSESSION/ENJOYMENT of the thing. recovery).
1485. The preceding art shall be applied to contracts purporting to be leases of
personal prop w/ option to buy, when the lessor has deprived the lessee of the possession
or enjoyment of the thing. RA 6552 governs sales of REAL ESTATE on installments. Ridad v Filinvest: “Should the vendor choose to foreclose the mortgage (3 rd remedy),
Where the buyer has paid at least 2 years of installments, the buyer is entitled to the ff he has to content himself w/ the proceeds of the sale at the public auction of the
rights in case he defaults in the payment of succeeding installments: chattels w/c were sold on installment & mortgaged to him.”
1486. In the cases referred to in the 2 preceding arts, a stipulation that the installments
or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the 1. Grace Period – to pay, w/o additional interest, the unpaid installments due w/in the
same may not be unconscionable under the circumstances. total grace period earned by him w/c is hereby fixed at the rate of one month grace
Why is it that in Southern Motors v Moscoso, they were able to exact the fulfillment of
period for every year of installment payments made; Provided, that this right shall be
the deficiency of the purchase price even after foreclosing the chattel mortgage while
exercised by the buyer only once in every 5 years of the life of the contract & its
in Ridad v Filinvest, the court ruled that the vendor has to content himself w/ the
extensions, if any;
proceeds of the foreclosure?
2. Refund of Cash Surrender Value – if the contract is cancelled, the seller shall refund to
B/c in the Moscoso case, what the vendors filed was a complaint to recover of the
the buyer the cash surrender value of the payments on the prop equivalent to 50% of
unpaid balance of the promissory note covering the chattel mortgage. In effect, what
the total payments made, &, after 5 years of installments, an additional 5% every year
they chose was the 1 st remedy. The foreclosure in this case was not an exercise of the
but not to exceed 90% of the total payments made; Provided, that the actual
3rd remedy but was merely incident of their choice to exact the fulfillment of the obli.
cancellation of the contract shall take 30 days from receipt by the buyer of the notice of
In Ridad, they chose to foreclose the chattel mortgage extrajudicially, w/c is the 3 rd
cancellation or the demand for rescission of the contract by a notarial act & upon full
remedy, barring them to recover the deficiency from the vendees.
payment of the cash surrender value to the buyer.
Read: Layug v IAC
1487. The expenses for the execution & registration of the sale shall be borne by the vendor, unless there is a stipulation to the contrary.
1488. The expropriation of prop for public use is governed by special laws.
CAPACITY TO BUY OR SELL
1489. All persons who are authorized in this Code to obligate themselves may enter into a Gen’l rule: All persons, whether natural/juridical, who can bind themselves have also legal Contracts of sale entered into by incapacitated persons are:
contract of sale, saving the modifications contained in the ff arts. capacity to buy & sell. 1. VOIDABLE, if only ONE of the parties is incapable of giving consent to a contract
Where necessaries are sold & delivered to a minor or other person w/o capacity to act, he Exceptions: When law determines that a party suffers from either absolute or relative (1390[1])
must pay a reasonable price therefor. Necessaries are those referred in Art 290. incapacity. 2. UNENFORCEABLE, if BOTH parties are incapable of giving consent to a contract
(1403[3])
*Art. 290, CC = Art. 94, FC Absolute incapacity – exists in case of persons who cannot bind themselves (e.g. minors,
insane or demented persons) Who are incapable of giving consent to a contract?
Ralative incapacity – exists only w/ reference to certain persons or a certain class of prop 1327. The ff cannot give consent to a contract:
(e.g. 1490, 1491) 1. Unemancipated minors;
2. Insane or demented persons, & deaf-mutes who do not know how to write.
Necessaries – those things w/c are needed for sustenance, dwelling, clothing, medical 1329. The incapacity declared in art 1327 is subject to the modifications determined by
attendance, education & transportation according to the financial capacity of the family of law, & is understood to be w/o prejudice to special dq’s established in the laws.
the incapacitated person (Art. 94, FC)
1490. The husband & the wife cannot sell props to each other, except: Prohibition also applies to common-law relationships. A sale b/w husband & wife is VOID. (1409[7]) If
1. When a separation of prop was agreed upon in the marriage settlements; or you want:
2. When there has been a judicial separation of prop under Art. 191. Persons allowed to question such sale: Read Art. 87, FC, re donations b/w husband & wife/common-law partners
134-142, FC, re judicial separation of prop
1. Those who bear such relation to the parties making the transfer or to the prop itself that
143-146, FC, re separation of prop
such transfer interferes w/ their rights or interests.
2. The government.
1491. The ff persons cannot acquire by purchase, even at public or judicial auction, either Pars. 1-3 = unenforceable, capable of ratification (b/c it involves private interests) Pars. Fiestan v CA: “The prohibition mandated by par 2 of Art 1491 does not apply where the
in person or thru the mediation of another: 4-6 = void (b/c it involves public interests) sale of the prop in dispute was made under a special power inserted in or attached to
1. The guardian, the prop of the person/s who may be under his guardianship; the real estate mortgage pursuant to Act No. 3135, as amended. Under Act No. 3135,
2. Agents, the prop whose administration or sale may have been intrusted to them, No. 2 not absolute, agent may buy the prop intrusted unto him if: as amended, a mortgagee-creditor is allowed to participate in the bidding & purchase
unless the consent of the principal have been given; under the same conditions as any other bidder.”
1. The agency has been terminated
3. Executors & administrators, the prop of the estate under administration; Act No. 3135 – An Act to Regulate the Sale of Prop under Special Powers inserted in or
2. His principal gives consent
4. Public officers & employees, the prop of the State or of any subdivision thereof, Annexed to Real Estate Mortgages. (applies in cases of extrajudicial foreclosure sales)
3. The sale was made under a special power pursuant to a special law (read: Fiestan v CA)
or of any gocc, or institution, the admin of w/c has been intrusted to them; this
provision shall apply to judges & gov’t experts who, in any manner whatsoever take part *It seems that we can consider pars. 1-3 of this article to be covered by 1403 [1] & pars.
in the sale; No.3 refers only to props under the administration of the executor or administrator at the
4-5 to be under 1409 [1]
5. Justices, judges, prosecuting attorneys, clerks of superior & inferior courts, & time of the acquisition.
other officers & employees connected w/ the administration of justice, the prop & rights Executor may purchase the hereditary rights of any heir, since they do not administer such
in litigation or levied upon an execution before the court w/in whose jurisdiction or rights.
territory they exercise their respective fxns; this prohibition includes the act of acquiring
by assignment & shall apply to lawyers, w/ respect to the prop & rights w/c may be the No.4 refers only to props:
object of any litigation in w/c they may take part by virtue of their profession; 1. Belonging to the Sate, or of any subdivision thereof, or of any gocc or institution 2.
6. Any others especially dq’d by law.
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.
1492. The prohibitions in the 2 preceding arts are applicable to sales in legal redemption, compromises & renunciations. Compromise – amicable settlement of a (legal) controversy
Renunciation – condonation (remember obli, read 1270-1274 kung trip mo)
EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST
1493. If at the time the contract of sale is perfected, the thing w/c is the object of the contract has been entirely lost, the 1493 applies to a sale of a specific thing. 1494 applies to a sale the object of w/c consists of a mass of “specific goods” Loss
contract shall be w/o any effect. or injury referred to in these articles is one w/c takes place BEFORE or AT THE TIME OF PERFECTION.
But if the thing should have been lost in part only, the vendee may choose b/w w/drawing from the contract & demanding the
remaining part, paying its price in proportion to the total sum agreed upon. 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. (1189, [3])
1494. Where the parties purport a sale of specific goods, & the goods w/o the knowledge of the seller have perished in part or Perish – material deteriorations, complete change in the nature of the thing in such a manner that it loses the utility it had during the time of
have wholly or in a material part so deteriorated in quality as to be substantially changed in character, the buyer may at his option, the perfection of the contract
treat the sale:
1. As avoided; or Rule in 1493 & 1494 similar:
2. As valid in all of the existing goods or in so much thereof as have not deteriorated, & as binding the buyer to pay the If lost/deteriorated in whole = void
agreed price for the goods in w/c the ownership will pass, if the sale was divisible. If lost/deteriorated in part = rescind contract or pay for what’s left (if divisible)
OBLIS OF THE VENDOR
Section 1. – Gen’l Provisions
1495. The vendor is bound to transfer the ownership of & deliver, as well as warrant the Principal oblis of a vendor:
thing w/c is the object of the sale. (1) To transfer the ownership of the determinate thing sold (1948, 1495);
(2) To deliver the thing, w/ its accessions & accessories, if any, in the condition in w/c they were upon the perfection of the contract; (1537)
(3) To warrant against eviction & against hidden defects; (1495, 1547)
(4) To take care of the thing, pending delivery, w/ proper diligence; (1163)
(5) To pay for the expenses of the deed of sale, unless there is a stipulation to the contrary. (1487)
*Seller need not be the owner of the thing at the time of perfection of the contract; 1459 provides that it is sufficient that he has a right to transfer the ownership thereof at the time
it is delivered.
1496. The ownership of the thing sold is acquired by the vendee from the moment it is Ways of effecting delivery:
delivered to him in any of the ways specified in arts 1497 to 1501, or in any other manner (1) Actual or real delivery (1497);
signifying an agreement that the possession is transferred from the vendor to the vendee. (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)
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.
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
1497. The thing sold shall be understood as delivered, when it is placed in the control & 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
possession of the vendee. accepts the same.
(Actual delivery) 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.
Symbolic tradition – when parties, to effect delivery, make use of a token symbol to Ten Forty Realty v Cruz: “Execution of a public instrument gives rise only to a prima
represent the thing delivered. (e.g. Delivery of car keys) facie presumption of delivery. Such presumption is destroyed when the delivery is not
effected b/c of a legal impediment. A constructive or symbolic delivery, being merely
presumptive, is deemed negated by the failure of the vendee to take actual possession
Where the seller of goods draws on the buyer for the price & transmits the bill of
exchange & bill of lading together to the buyer to secure acceptance or payment of the bill 3rd Scenario (3rd par): BoL is DELIVERABLE TO THE ORDER OF THE BUYER, but the SELLER RETAINS POSSESSION OF THE BoL.
of exchange, the buyer is bound to return the bill of lading if he does not honor the bill of Effect: Buyer, even if the BoL is deliverable to him, cannot recover the goods until he presents the BoL (w/c he cannot do KASI NGA na kay Seller ang putang inang BoL)
exchange, & if he wrongfully retains the bill of lading he acquires no added right thereby. De Leon: A 3rd person may be named as consignee in the BoL. In this case, the buyer can only obtain the goods when the consignee surrenders the BoL to the carrier/buyer or he
If, however, the bill of lading provides that the goods are deliverable to the buyer or to the indorses the bill in blank or especially to the buyer. The consignee will only do so upon payment of the price (b/c if he would do so nonetheless, then USELESS! Seller might as well
order of the buyer, or is indorsed in blank, or to the buyer by the consignee named save himself the trouble by naming the buyer the consignee in the BoL)
therein, one who purchases in GF, 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, 4th Scenario (4th par): Seller transmits the BoL, together w/ a bill of exchange. (In the BoE, drawer & payee is seller, drawee is buyer) Effects:
provided that such purchaser has received delivery of the bill of lading indorsed by the
consignee named therein, or of the goods, w/o notice of the facts making the transfer 1. Title is retained by the seller until the BoE is paid.
wrongful. 2. Delivery of goods is conditioned upon the payment/acceptance of the BoE
3. If BoE is not paid, buyer is BOUND to return the BoL.
4. If the buyer wrongfully retains the BoL, he acquires no additional right thereby.
5. If the BoL names the buyer as consignee or is indorsed in blank or specially to the buyer, a purchaser in GF for value of the BoL from the buyer will obtain ownership in the
goods even if BoE is not honored.
(De Leon: safe move for the seller is to send the BoL & BoE to a 3rd person b/c if sent to the buyer, he may obtain the goods & forget about honoring the BoE w/c would compel the
seller to enter upon litigation)
It seems that in these scenarios, the risk of loss is borne by the seller, as he reserves ownership in the things sold + res perit domino. The exception is when his only purpose is to
secure the performance of the buyer’s obli.
1504. Unless o/w 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 This provision states 2 exceptions to the principle of Res Perit Domino. In the 1 st par,
goods are at the buyer’s risk whether actual delivery has been made or not, except that: the owner is the seller but merely to secure the performance of the buyer of his oblis.
1. Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of the contract & the ownership in the goods has been retained by the seller In this par, the buyer is the one who bears the risk. In the 2nd par, the risk of loss is
merely to secure performance by the buyer of his oblis under the contract, the goods are at the buyer’s risk from the time of such delivery; 2. Where actual delivery has been delayed borne by the party at fault.
thru the fault of either the buyer or seller the goods are at the risk of the party in fault.
1505. Subject to the provisions of this Title, where goods are sold by a person who is not Gen’l rule: Buyer cannot acquire more rights than the seller had 559. The possession of movable prop acquired in GF is equivalent to a tile.
the owner thereof, & who does not sell them under authority or w/ the consent of the Exceptions: (in these cases, the buyer’s right to the prop is better than the owner, provided Nevertheless, one who has lost any movable or has been unlawfully deprived thereof,
owner, the buyer acquires no better title to the goods than the seller had, unless the he is in GF) may recover it from the person in possession of the same
owner of the goods is by his conduct precluded from denying the seller’s authority. 1. Owner is estopped from denying seller’s authority to sell If the possessor of a movable lost or of w/c the owner has been unlawfully deprived,
Nothing in this Title, however, shall effect: 2. Where the law enables the apparent owner to dispose of the goods as if he were the has acquired in GF at a public sale, the owner cannot obtain its return w/o reimbursing
1. The provisions of any factors’ acts, recording laws, or any other provision of law true owner thereof the price paid therefor.
enabling the apparent owner of goods to dispose of them as if he were the true 3. Where the sale is sanctioned by statutory or judicial authority
owner thereof; 4. Where the sale is made at merchant’s stores, fairs or markets Dizon v Suntay: “The right of the owner cannot be defeated even by proof that there
2. The validity of any contract of sale under statutory power of sale or under the order 5. When the seller has a voidable title w/c has not been avoided at the time of the sale was GF in acquisition by the possessor. Suffice it to say in this regard that the right of
of a court of competent jurisdiction; 6. Where seller subsequently acquires title the owner to recover personal prop acquired in GF by another, is based on his being
3. Purchases made in a merchant’s store, or in fairs, markets, in accordance w/ the Code Read: Dizon v Suntay, EDCA Publishing v Sps. Santos dispossessed w/o his consent. The common law principle that where 1 of 2 innocent
of Commerce & special laws. persons must suffer by a fraud perpetrated by another, the law imposes the loss upon
the party who, by his misplaced confidence, has enable the fraud to be committed,
cannot be applied in a case w/c is covered by an express provision of the new CC,
specifically 559 of the CC. B/w a common law principle & a statutory provision, the
latter must prevail in this jurisdiction.”
Why is it that in Dizon v Suntay, the owner (Suntay) was allowed to recover his prop but
in EDCA v Sps Santos, EDCA was not?
>In the latter case, the court held that EDCA WAS NOT UNLAWFULLY DEPRIVED OF
THEIR PROP. They delivered the prop in question (books) to Cruz (who talked them
into selling said books) & as we all know, ownership is transferred upon delivery,
actual or constructive. By the time Cruz sold the books to the Santoses, he was already
the owner of such books, allowing him to make a valid transfer of them.
1506. Where the seller of goods has a voidable title thereto, but his title has not been Requisites for acquisition of good title by buyer: 1385. (par 2) Neither shall rescission take place when the things w/c are the object of
avoided at the time of the sale, the buyer acquires a good title to the goods, provided he 1) The seller’s voidable title is yet to be avoided; the contract are legally in the possession of 3 rd persons who did not act in BF. (owner
buys them in good faith, for value, & w/o notice of the seller's defect of title. 2) Buyer buys in good faith & for value; cannot rescind contract b/w seller & buyer if buyer fulfills requisites)
3) Buyer has no notice of the seller’s defect of title.
1388. Whoever acquires in BF the things alienated in fraud of creditors, shall indemnify
If the seller has NO title, then a buyer, even if he purchases in GF & for value, cannot the latter for damages suffered by them on acct. of the alienation, whenever, due to
acquire a good title. Read the notes for the preceding article, specifically 559 & the Dizon v any cause, it should be impossible for him to return them.
Suntay doctrine. (If the buyer does not fulfill the requisites, this is the remedy of the owner if ever the
buyer cannot return the thing)
1507. A docu of title in w/c it is stated that the goods referred CLASSES OF DOCUMENTS OF TITLE:
to therein will be delivered to the bearer, or to the order of any 1) Negotiable Documents of Title (NDT) – deliverable to bearer or to the order of a specified person. 2)
person named in such docu is a NDT. Non-negotiable Documents of Title (Non-NDT) – deliverable to a specified person. (“straight” bill)
*A document deliverable to bearer or to the order of a specified person w/c is subsequently indorsed to a specified person DOES NOT lose its negotiable character, read 1509.
DEFINITION OF TERMS:
1) Document of Title of Goods – any document used in the ordinary course of business in the sale or transfer of goods, or authorizing a person to do so in his behalf.
a. Bill of Lading – a receipt for the transport of goods & their delivery to the person named therein. Three Persons Involved: Shipper – Carrier – Consignee. b.
Dock Warrant – instrument given by dock owners to an importer of goods warehoused on the dock.
c. Warehouse Receipt – a receipt of goods deposited w/ a warehouseman to hold & deliver the goods to the person named therein or bearer
DUTY OF SELLER: To prepare the good in a deliverable state at his expense. In such state,
the buyer is bound to accept delivery. (unless o/w agreed)
1522. Where the seller delivers to the buyer a quantity of goods less than he contracted to DELIVERY OF GOODS LESS THAN THE QUANTITY CONTRACTED: FAIR VALUE: not necessarily the market value; the benefit w/c the buyer may receive
sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered, - The buyer may reject delivery from the goods.
knowing that the seller is not going to perform the contract in full, he must pay for them - The buyer may accept delivery Since the seller did not delivery the correct quantity as agreed upon, the buyer is not
at the contract rate. If, however, the buyer has used or disposed of the goods delivered - Know that seller would not complete delivery: Pay contract price required to pay the contract price if such price is more than fair value to him
before he knows that the seller is not going to perform his contract in full, the buyer shall - Does not know that seller will not complete delivery: Fair value of the goods
not be liable for more than the fair value to him of the goods so received. DELIVERY OF GOODS MORE THAN THE QUANTITY CONTRACTED: 1233. A debt shall not be understood to have been paid unless the thing or service in
Where the seller delivers to the buyer a quantity of goods larger than he contracted to - Buyer may accept quantity contracted & reject the excess w/c the obli consists has been completely delivered or rendered, as the case may be.
sell, the buyer may accept the goods included in the contract & reject the rest. If the buyer - Buyer may accept including the excess provided, he pays for their value
accepts the whole of the goods so delivered he must pay for them at the contract rate. - If indivisible, buyer may reject the whole or accept it entirely DELIVERY OF
Where the seller delivers to the buyer the goods he contracted to sell mixed w/ goods of a 1235. When the obligee accepts the performance, knowing its incompleteness or
GOODS MIXED W/ OTHERS:
different description not included in the contract, the buyer may accept the goods w/c are irregularity, & w/o expressing any protest or objection, the obli is deemed fully
- Buyer may accept those w/c are in accordance w/ the contract & reject the rest
in accordance w/ the contract & reject the rest. complied w/.
- Buyer may accept including that w/c are not in accordance w/ the contract
In the preceding two paragraphs, if the subject matter is indivisible, the buyer may reject
provided, he pays for their value
the whole of the goods.
- If indivisible, buyer may reject the whole or accept it entirely
The provisions of this art are subject to any usage of trade, special agreement, or course of
DELIVERY OF INDIVISIBLE GOODS WHETHER IN EXCESS OR MIXED GOODS
dealing b/w the parties. Buyer may reject the whole or accept it entirel
1523. Where, in pursuance of a contract of sale, the seller is authorized or required to NOTA BENE: THIS PROVISION APPLIES ONLY IF THERE IS AN AGREEMENT THAT THE SELLER C.O.D. – Collect of Delivery – Carrier collects the purchase price.
send the goods to the buyer, delivery of the goods to a carrier, whether named by the WILL SHIP THE GOODS F.O.B. – Free on Board – where ever the FOB pertains to, the buyer shall not pay for
buyer or not, for the purpose of transmission to the buyer is deemed to be a delivery of the expenses of delivery up to that place of designation.
the goods to the buyer, except in the cases provided for in art 1503, first, second & third GEN’L RULE: Delivery to the carrier constitutes delivery to the buyer, whether the carrier
paragraphs, or unless a contrary intent appears. was named by the buyer or not. Ex. FOB-Manila. Buyer’s place of business is in Bulacan. The goods will be coming from
Unless o/w authorized by the buyer, the seller must make such contract w/ the carrier on EXCEPTIONS: Cebu (seller’s place of business). The expenses for shipping the goods from Cebu to
behalf of the buyer as may be reasonable, having regard to the nature of the goods & the
1) The contrary appears (parties did not intend delivery to carrier is delivery to buyer) Manila will be borne by the seller. The expenses for shipping the goods from Manila to
other circumstances of the case. If the seller omits so to do, & the goods are lost or
2) 1st, 2nd & 3rd pars of 1503 Bulacan shall be borne by the buyer. “Free” yung expenses from Cebu to Manila.
damaged in course of transit, the buyer may decline to treat the delivery to the carrier as a
delivery to himself, or may hold the seller responsible in damages.
Unless o/w agreed, where goods are sent by the seller to the buyer under circumstances DUTIES OF SELLER AFTER DELIVERY TO CARRIER: C.I.F. – Cost, Insurance & Freight – Signifies that the price fixed covers also expenses of
in w/c the seller knows or ought to know that it is usual to insure, the seller must give such 1) Enter into contract w/ the carrier on behalf of the buyer. freight & insurance. IOW, the seller pays for the insurance & shipping expenses.
notice to the buyer as may enable him to insure them during their transit, &, if the seller - Failure to do so:
fails to do so, the goods shall be deemed to be at his risk during such transit. A) Buyer may DECLINE to treat delivery to carrier as delivery to him; OR F.A.S. – Free Along Side – The seller pays all charges & is subject to risk until the goods
B) the buyer may hold seller responsible for DAMAGES are placed alongside the vessel. (Mem-Aid 2012)
2) To give notice to the buyer regarding necessity to insure the goods
- Failure to do so: RISK borne by the seller PROVIDED the buyer is unaware of the need
to insure such goods. If the buyer is aware of the need to insure, seller may not be held
responsible.
1524. The vendor shall not be bound to deliver the thing sold, if the vendee has not paid GEN’L RULE: The obligation to deliver arises from the moment the contract is perfected. The buyer may, from that moment, demand delivery. The seller, reciprocally, may demand
him the price, or if no period for the payment has been fixed in the contract. payment. Hence, the thing shall not be delivered unless the price be paid.
EXCEPTION: The thing shall be delivered but the price shall not be paid first, if the time of payment has been fixed to be paid at a latter date. (in such cases, the seller is considered to
have sold on credit)
EXCEPTION TO THE EXCEPTION: Vendee has lost the right to make use of the period of payment. Art. 1536 (Period of payment is at a latter date but the seller is not bound to make
delivery)
1525. The seller of goods is deemed to be an unpaid seller w/in the meaning of this Title: An UNPAID SELLER is one who: Art. 1249. Par. 2. The delivery of promissory notes payable to order, or bills of
(1) When the whole of the price has not been paid or tendered; 1) has not been paid or to whom the price has not been tendered exchange, or other mercantile documents shall produce the effect of payment only
(2) When a bill of exchange or other nego instrument has been received as conditional 2) has received a bill of exchange or other negotiable instrument as conditional payment, when they have been cashed x x x
payment, & the condition on w/c it was received has been broken by reason of the & the condition to w/c it was received has been broken by reason of the dishonor of the
dishonor of the instrument, the insolvency of the buyer, or o/w. instrument, insolvency of the buyer or o/w. Note consignation. 1256. If the creditor to whom tender of payment has been made
UNPAID SELLER includes: refuses w/o just cause to accept it, the debtor shall be released from responsibility by
(*In arts 1525 to 1535 the term "seller" includes an agent of the seller to whom the bill of 1) Agent of the seller; the consignation of the thing or sum due.
lading has been indorsed, or a consignor or agent who has himself paid, or is directly 2) Consignor or agent who has himself paid or is directly responsible for the
responsible for the price, or any other person who is in the position of a seller.) price; or 3) Any Other person in the position of the seller.
WHERE WHOLE OF PRICE HAS NOT BEEN PAID:
1) Tender of payment by buyer – such as checks (juan tamad). Seller’s lien is destroyed.
2) Payment of part of price – payment of price does NOT destroy a seller’s lien. The seller
remains an unpaid seller even if title has passed to the buyer.
3) Payment by negotiable instrument – OBLICON (Art. 1249)
1526. Subject to the provisions of this Title, notwithstanding that the ownership in the REMEDIES OF UNPAID SELLER (SAR-SPASMS)
goods may have passed to the buyer, the unpaid seller of goods, as such, has: 1) Possessory lien (Art 1527-1529)
(1) A lien on the goods or right to retain them for the price while he is in possession of 2) Stoppage of goods in transitu (Art 1530)
them; 3) Special right of resale (Art 1533)
(2) In case of the insolvency of the buyer, a right of stopping the goods in transitu after 4) Special right of rescission (Art 1534)
he has parted w/ the possession of them; 5) Action for the price (Art 1595)
(3) A right of resale as limited by this Title; 6) Action for damages (Art 1596)
(4) A right to rescind the sale as likewise limited by this Title. 7) Recto Law (Art 1484)
Where the ownership in the goods has not passed to the buyer, the unpaid seller has, in 8) Maceda Law (Governs financing of real estate on installment payment) (ung special law na cinite sa Layug v IAC) 9) Specific performance (Art 1595)
addition to his other remedies a right of withholding delivery similar to & coextensive w/
his rights of lien & stoppage in transitu where the ownership has passed to the buyer.
1527. Subject to the provisions of this Title, the unpaid seller of goods who is in possession POSSESSORY LIEN – a right to retain possession of goods CREDIT SALE – whereby the seller binds himself to give the goods to the buyer w/o
of them is entitled to retain possession of them until payment or tender of the price in the receiving at that time payment for them.
ff cases, namely: Stipulation as to credit – means that a period of payment price has been fixed in the
WHEN IT MAY BE EXERCISED
(1) Where the goods have been sold w/o any stipulation as to credit; contract. In the absence of this stipulation, the seller is entitled to the payment of the
a) The goods has been sold w/o any stipulation as to credit
(2) Where the goods have been sold on credit, but the term of credit has expired; price at the same time that he transfers the possession of the goods. Accordingly, the
b) The goods has been sold on credit, but the term of credit has expired
(3) Where the buyer becomes insolvent. seller always has a lien upon the goods until payment or tender of the entire price.
c) 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. INSOLVENT – is a person who either ceased to pay his debts in the ordinary course of
business or cannot pay his debts as they become due. (w or w/o insolvency
proceedings)
Insolvency does not dissolve the bargain, it merely revives the seller’s lien.
remainder of the goods may be stopped in transitu, unless such part delivery has been
under such circumstances as to show an agreement w/ the buyer to give up possession of
the whole of the goods.
1532. The unpaid seller may exercise his right of stoppage in transitu either by obtaining actual possession of the goods or by giving notice of his claim to the carrier or other bailee in WAYS OF EXERCISING THE RIGHT OF STOPPAGE
whose possession the goods are. Such notice may be given either to the person in actual possession of the goods or to his principal. In the latter case the notice, to be effectual, must be 1. By taking actual possession of the goods
given at such time & under such circumstances that the principal, by the exercise of reasonable diligence, may prevent a delivery to the buyer. 2. By giving notice of his claim to the carrier or bailee
When notice of stoppage in transitu is given by the seller to the carrier, or other bailee in possession of the goods, he must redeliver the goods to, or according to the directions of, the
seller. The expenses of such delivery must be borne by the seller. If, however, a NDT representing the goods has been issued by the carrier or other bailee, he shall not be obliged to
The seller’s power to stop in transitu includes:
deliver or justified in delivering the goods to the seller unless such docu is first surrendered for cancellation.
1. Power to counter delivery
2. Power to order redelivery to himself
1533. Where the goods are of perishable nature, or where the seller expressly reserves SPECIAL RIGHT OF RESALE Art 1533 only applies id the title to goods has already passed to the buyer. Otherwise,
the right of resale in case the buyer should make default, or where the buyer has been in May be exercised only when the unpaid seller has either a right of lien or has stopped the the goods cannot be resold.
default in the payment of the price for an unreasonable time, an unpaid seller having a goods in transitu & under any of the ff conditions:
right of lien or having stopped the goods in transitu may resell the goods. He shall not 1. Goods are perishable in nature ILLUSTRATIVE CASE:
thereafter be liable to the original buyer upon the contract of sale or for any profit made 2. The right to resell is expressly reserved in case the buyer should make a default Facts: S sold to B a tractor for P12, 000 - - P5, 000 upon delivery & 7,000 w/in 60 days.
by such resale, but may recover from the buyer damages for any loss occasioned by the 3. The buyer delays in the payment of the price for an unreasonable time B failed to take delivery of the tractor & pay the purchase price. S was forced to sell
breach of the contract of sale.
the tractor at a lower price of P10, 000.
Where a resale is made, as authorized in this art, the buyer acquires a good title as against
the original buyer. EFFECT OF RESALE
The buyer acquires a good title as against the original buyer. The seller is not liable to the Issue: Is B liable for the difference of P2, 000?
original buyer for any profit earned in the resale & may recover damages occasioned by
It is not essential to the validity of resale that notice of an intention to resell the goods be the buyer’s breach of the contract of sale. Action for the rescission of the sale is not
given by the seller to the original buyer. Held: YES. In a contract of sale w/c is executory as to both parties, the vendor is
necessary. (Pineda, Civil Code Annotated 2010)
entitled to resell the goods if the purchaser fails to take delivery & pay the purchase
price. If he is obliged to resell for lesser value, he holds the buyer for the difference
But where the right to resell is not based on the perishable nature of the goods or upon an Resale may be public or private sale BUT if he sells for the same or more than the contract price, the breach of contract of
express provision of the contract of sale, the giving or failure to give such notice shall be To avoid injustice & unfairness, the seller is prohibited from becoming the buyer of the original buyer is DAMNUM ABSQUE INJURIA. (A loss or damage w/o injury)
relevant in any issue involving the question whether the buyer had been in default for an the goods whether directly or indirectly
unreasonable time before the resale was made.
Notice of sale need not be sent to the original buyer
It is not essential to the validity of a resale that notice of the time & place of such resale
Atty. Busmente: When is notice essential?
should be given by the seller to the original buyer.
- When the right of resale is exercised under the condition of the buyer delaying
payment for an unreasonable time
The seller is bound to exercise reasonable care & judgment in making a resale, & subject - De Leon: safe move is to always send notice.
to this requirement may make a resale either by public or private sale. He cannot,
however, directly or indirectly buy the goods.
1534. An unpaid seller having the right of lien or having stopped the goods in transitu, may SPECIAL RIGHT TO RESCIND – available ONLY if the seller has either the right of lien or a Rescission – a party’s unilateral unmaking of a contract for a legally sufficient reason, or
rescind the transfer of title & resume the ownership in the goods, where he expressly right to stop the goods in transitu PLUS either of two situations: a judgment rescinding the contract. (BLD – 9th Ed.)
reserved the right to do so in case the buyer should make default, or where the buyer has 1. Where the right to rescind on default has been expressly reserved
been in default in the payment of the price for an unreasonable time. The seller shall not 2. Where the buyer has been in default for an unreasonable time Effect of rescission:
thereafter be liable to the buyer upon the contract of sale, but may recover from the
1385. Rescission creates the obli to return the things w/c were the object of the
buyer damages for any loss occasioned by the breach of the contract.
EFFECT OF EXERCISE OF RIGHT contract, together w/ their fruits, & the price w/ its interests; consequently, it can be
The transfer of title shall not be held to have been rescinded by an unpaid seller until he
has manifested by notice to the buyer or by some other overt act an intention to rescind. The seller shall not thereafter be liable to the buyer upon the contract of sale, but may carried out only when he who demands rescission can return whatever he may be
recover from the buyer damages for any loss occasioned by the breach. obliged to restore.
It is not necessary that such overt act should be communicated to the buyer, but the (If the thing cannot be returned anymore, then damages, 1388)
giving or failure to give notice to the buyer of the intention to rescind shall be relevant in
any issue involving the question whether the buyer had been in default for an There must be NOTICE or some other OVERT ACT of intention to rescind.
unreasonable time before the right of rescission was asserted. Overt act need not be communicated BUT the giving of notice is relevant in case of
default for an unreasonable time.
1535. Subject to the provisions of this Title, the unpaid seller's right of lien or stoppage in EFFECT OF SALE OF GOODS SUBJECT TO LIEN OR STOPPAGE IN TRANSITU The rule protects a purchaser w/o notice after the seller had stopped the goods either
transitu is not affected by any sale, or other disposition of the goods w/c the buyer may 1) Where goods are NOT covered by negotiable doc of title - seller can give NO larger than by virtue of right of lien or stoppage in transitu.
have made, unless the seller has assented thereto. what he has. When goods are subject to a legal lien a purchaser from the original buyer
If, however, a NDT has been issued for goods, no seller's lien or right of stoppage in can acquire ONLY such rights as the buyer then had.
transitu shall defeat the right of any purchaser for value in good faith to whom such docu
has been nego’d, whether such nego’n be prior or subsequent to the notification to the
2) Where goods are covered by negotiable doc of title – the seller’s lien cannot prevail
carrier, or other bailee who issued such docu, of the seller's claim to a lien or right of
against rights of a PURCHASER FOR VALUE IN GOOD FAITH to whom the document has
stoppage in transitu.
been indorsed.
1536. The vendor is not bound to deliver the thing sold in case the vendee should lose the RIGHT OF THE VENDOR TO HOLD DELIVERY IN SALE ON CREDIT
right to make use of the terms as provided in art 1198. GEN RULE: The vendor is NOT bound to make delivery if the vendee has not paid the price.
EXCEPTION: If a period has been fixed for payment, the vendor must deliver the thing sold THOUGH the price is not yet paid.
EXCEPTION TO THE EXCEPTION: Vendor may not be compelled to make delivery, even if vendee was given the benefit of period, in case the vendee should lose the right to make use
of the term (Art 1198) & such vendee has NOT yet paid the price.
WHEN DOES A VENDEE LOSE EVERY RIGHT TO MAKE USE OF PERIOD: (1198)
1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the price
2) When he does not furnish to the creditor/vendor the guaranties or securities w/c he has promised
3) When by his own acts he has impaired said guaranties or securities after their establishment, & when thru a fortuitous event they disappear, unless he immediately gives new ones
equally satisfactory
4) When the debtor/vendee violates any undertaking, in consideration of w/c the creditor agreed to the period. 5) When the debtor/vendee attempts to abscond
1537. The vendor is bound to deliver the thing sold & its accessions & accessories in the CONDITION OF THING TO BE DELIVERED thus, in Consing vs CA (1989) the Court ruled that a subdivision lot seller should not
condition in w/c they were upon the perfection of the contract. The THING sold & its ACCESSIONS & ACCESSORIES must be in the condition in w/c they shift to the buyer the burden of providing access to & from the subdivision. It is the
were upon the perfection of the contract. seller’s duty to construct the necessary roads in the subdivision that could serve as
All the fruits shall pertain to the vendee from the day on w/c the contract was perfected. SELLER’S DUTY- outlets. Proper access to the residence is essential to its enjoyment
1) To preserve the thing pending delivery (relate to Arts. 1163 & 1164)
2) To deliver the thing sold in a condition suitable for its enjoyment by the buyer for the 1166. The obli to give a determinate thing includes that of delivering all its accessions &
purposes contemplated accessories, even though they may not have been mentioned.
Accessions – are the fruits of a thing; additions to, or improvements upon, a thing such as *Sale of the principal entitles the buyer to the accessions & accessories, but sale of the
the young of animals, house or trees on a land, etc. accessories & accessions does not entitle buyer to the principal.
Accessories – are anything attached to a principal thing for its completion, ornament, or
better use such as picture frame, key of a house, etc.
VENDEE IS ENTITLED TO THE FRUITS
Art. 1164 - the vendee has a right to the fruits of the thing sold from the time the
obligation to deliver it arises.
Art. 1475 - the obligation to deliver arises upon the perfection of the contract of sale
1541. The provisions of the two preceding arts shall apply to judicial sales.
1542. In the sale of real estate, made for a lump sum & not at the rate of a certain sum for SALE OF REAL ESTATE MADE FOR A LUMP SUM - a cuerpo cierto/por precio alzado
a unit of measure or number, there shall be no increase or decrease of the price, although If the sale is made for lump sum, & not so much per unit of measure or number, the cause of the contract is the thing sold independent & irrespective of its number or measure.
there be a greater or less area or number than that stated in the contract.
2 types of pricing agreement
The same rule shall be applied when two or more immovables as sold for a single price; 1. Unit price contract – purchase price is determined by way of reference to a stated rate per unit
but if, besides mentioning the boundaries, w/c is indispensable in every conveyance of 2. Lump sum contract – states a full purchase price for an immovable the area of w/c may be declared based on estimate or where both the area & boundaries are stated.
real estate, its area or number should be designated in the contract, the vendor shall be Example: P1M for 1,000 square meters.
bound to deliver all that is included w/in said boundaries, even when it exceeds the area
or number specified in the contract; &, should he not be able to do so, he shall suffer a
Sale of real estate made for a lump sum
reduction in the price, in proportion to what is lacking in the area or number, unless the
1) Mistake of area stated in contract immaterial –
contract is rescinded b/c the vendee does not accede to the failure to deliver what has
the vendor is obligated to deliver all the land included w/in the boundaries, regardless whether the real estate should be greater or smaller than they recited in the deed
been stipulated.
(Balantakbo vs CA)
The boundaries of the land stated in the contract determine the effects & scope of the sale, NOT the area thereof (Semira vs CA)
2) Where area or number stated together w/ boundaries – (De Leon p.274-276)
If vendor cannot deliver to vendee all that is stated in the contract, the vendee has the option:
a. To reduce the price in proportion to the deficiency OR
b. To set aside the contract
Phrase “should not be able to do so” refers to a situation when the vendor cannot deliver all that is included w/in the boundaries b/c a part or parcel of the real estate does
not belong to him.
3) Where there is conflict b/w area stipulated & title to property – (p.276)
Area included w/in the stipulated boundaries prevails over that w/c the title shows when the boundaries are certain & no alterations thereof has been proven.
4) Where identity of erroneously designated property clearly established – (p.277)
-the mistake in designating the property in the deed of sale does NOT vitiate consent of the parties or affect the validity & binding effect of the contract
Remedy: have the document reformed
5) Where words “about” , “more or less” , etc. Are used – (p. 277-278)
Words when used in connection w/ quantity or distance are intended to cover some slight or unimportant inaccuracy. They do NOT weaken or destroy the statements of distance
& quantity when no other guides are furnished.
When 2 or more real estates are sold for a single price, the rule is the same as when the real estate is sold for a lump sum. There shall be no increase or decrease in the area actually
delivered & the area stated in the contract (Beda MemAid)