From Atty. Deanabeth C.

Gonzales, Professor
Rizal Technological University, CBET

Sept. 13, 2020

For everyone who will get hold of a copy or portions of this material:

This is posted online in the light of the pandemic covid-virus which adversely affect not just the
Philippines but the entire world. It is a privilege for me to teach part-time in a state university for
more than a decade now. I teach subjects in the College of Business and Entrepreneurial
Technology (CBET), subjects which are all part of the Board Exam for CPAs. Being a CPA-Lawyer,
I know for a fact that having a book is a must in studying any law subject. However, teaching in a
school where many students cannot afford to buy a book, my former students in the past years can
attest to the fact that I went out of my way to pay for books in advance and allow some students to
pay me in installments over the entire semester just for them to have a book. Nevertheless, some
students still cannot afford to buy a book, and attended classes by just walking to school. Being a
product of the Public School System in the Philippines, up to college in PUP Sta. Mesa for
Accountancy, I fully understand the money issue in buying books for many students.

With Social Distancing rules and hygienic issues during this pandemic, students are not encouraged
to make use of the university physical library and the online library is not yet that fully operational.
Hence, I decided to post portions of some books online to help those students who cannot afford to
buy a book, specially now that unemployment in the country has risen at all-time high.

Portions of the book were copied by former CBET students from the book Law on Sales, Agency
and Bailments by Hector De Leon (definitely not the latest edition) and from other books/sources
(i.e., Law on Sales, Agency, Pledges and Mortgages by Carlos Suarez, Alexander Suarez, 2008
ed.) when they were asked to report in class. I wasn’t too happy to see reports which were mostly
copied from the books but I got the softcopies of their reports anyway sent thru email. In the end, I
found myself having a softcopy of many portions of the books on Law of Sales. There is no
copyright infringement here because it is for educational purposes and only portions of the book will
be posted to help students who cannot afford to buy a book in this pandemic times.

Note that the postings will not cover the entire assignment given for each session or particular day.
Rather, the postings will explain only some portions of the assignment for the day based on the
books previously used by the former CBET students. There is no new Civil Code to date so that the
contents of the books still apply. I will not prescribe any book on Sales for this semester in view of
the financial difficulty for most families. Students can buy (but NO available new stock of books in
Rex Bookstore per my online search as of September 10, 2020 nor in National Bookstores) or
borrow any edition of the book on sales by any author. Each student must download the proper civil
code provisions from the internet, make use of whatever postings available in the group/class
messenger that can be helpful for your classmates or do own research. The postings are for
personal use of the student only and not for mass production.

With no intent to have financial gain, but only to help students from the less privilege sector of our
society during this pandemic times, I hope many will benefit from this posting.

It may seem to be a cliché that “The Youth is the Hope of the Fatherland,” spoken by Dr. Jose Rizal.
Yet, in times like this, we need to give hope and to assist all students who will face more challenging
times ahead.

More power to all Filipinos and to all educators who in this pandemic times make extra efforts to
educate all learners.

May God who made heaven and earth continue to bless us all through Jesus Christ, by
whose blood shed on the cross save us all. Maraming salamat po.
LAW ON SALES – Notes 3

Art. 1481. In the contract of sale of goods by description or by sample, the contract may
be rescinded if the bulk of the goods delivered do not correspond with the description or
the sample, and if the contract be by sample as well as description, it is not sufficient
that the bulk of goods correspond with the sample if they do not also correspond with
the description.

The buyer shall have a reasonable opportunity of comparing the bulk with the description
or the sample.

Sale of goods by description and/or sample.

(1) Sale by description. — Sale by description occurs where a seller sells things as being of
a particular kind, the buyer not know ing whether the seller’s representations are true or false,
but relying on them as true; or, as otherwise stated, where the purchaser has not seen the
article sold and relies on the description given him by the vendor, or has seen the goods but the
want of identity is not apparent on inspection.
(2) Sale by sample. — To constitute a sale by sample, it must appear that the parties
contracted solely with reference to the sample, with the understanding that the bulk was like it.
Whether a sale is by sample is determined by the intent of the parties as shown by the terms of
the contract and the circumstances surrounding the transaction.
(3) Sale by description and sample. — When a sale is made both by sample and by
description, the goods must satisfy all the warranties (see Art. 1565.) appropriate to either kind
of sale, and it is not sufficient that the bulk of the goods correspond with the sample if they do
not also correspond with the description, and vice versa.

ART. 1482. Whenever earnest money is given in a contract of sale, it shall be

considered as part of the price and as proof of the perfection of the contract. (1454a)

Meaning of earnest money.

Earnest money is something of value given by the buyer to the seller to show that the buyer
is really in earnest, and to bind the bargain. It is actually a partial payment of the purchase price
and is considered as proof of the perfection of the contract.

Earnest money and option money distinguished.

They may be distinguished as follows:
(1) Earnest money is part of the purchase price, while option money (see Art. 1479, par. 2.)
is the money given as distinct consideration for an option contract;

(2) Earnest money is given only where there is already a sale, while option money applies to
a sale not yet perfected; and

(3) When earnest money is given, the buyer is bound to pay

the balance, while the would be buyer who gives option money is not required to buy.

ART. 1483. Subject to the provisions of the Statute of Frauds and of any other
2
applicable statute, a contract of sale may be made in writing, or by word of mouth, or
partly in writing and partly by word of mouth, or may be inferred from the conduct of the
parties.

Form of contract of sale.

(1) General rule. — The form of a contract refers to the manner in which it is executed or
manifested. As a general rule, a contract may be entered into in any form provided all the
essential requisites for its validity are present.

(2) Where contract covered by Statute of Frauds. — In case the contract of sale should be
covered by the Statute of Frauds, the law requires that the agreement (or some note or
memorandum thereof) be in writing subscribed by the party charged, or by his agent; otherwise,
the contract cannot be enforced by action.

(3) Where form is required in order that a contract may be valid. — Where the “applicable
statute” requires that the contract of sale be in a certain form for its validity, the required form
must be observed in order that the contract may be both valid and enforceable.

(4) Where form is required only for the convenience of the parties. — In certain cases, a
certain form (e.g., public instrument) is required for the convenience of the parties in order that
the sale may be registered in the Registry of Deeds to make effective as against third persons
the right acquired under such sale.

ART. 1484. In a contract of sale of personal property the price of which is payable in
installments, the vendor may exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay;
(2) Cancel the sale, should the vendee’s failure to pay cover two or more
installments;
(3) Foreclose the chattel mortgage on the thing sold; if one has been constituted,
should the vendee’s failure to pay cover two 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. (1454Aa)

Remedies of vendor in sale of personal property payable in installments

The vendor of personal property payable in installments may exercise any of the following
remedies:

(1) Elect fulfillment upon the vendee’s failure to pay; or

(2) Cancel the sale, if the vendee shall have failed to pay two or more installments; or
(3) Foreclose the chattel mortgage, if one has been constituted, if the vendee shall have
failed to pay two or more installments.

ART. 1485. The preceding article shall be applied to contracts purporting to be

leases of personal property with option to buy, when the lessor has deprived the lessee
of the possession or enjoyment of the thing.

Lease of personal property with option to buy.

Leases of personal property with option to buy on the part of the lessee who takes possession
or enjoyment of the property leased are really sales of personal thing payable in installments.

Art. 1486. In the case referred to in two preceding articles, a stipulation that the
installments or rents paid shall not be returned to the vendee or lessee shall be valid
insofar as the same may not be unconscionable under the circumstances.

Stipulation authorizing the forfeiture of installments or rents paid.

In sales of personal property by installments or leases of personal property with option to buy,
the parties may stipulate that the installments or rents paid are not to be returned.

Art. 1487. The expenses for the execution and registration of the sale shall be borne by
the vendor, unless there is a stipulation to the contrary.

Art. 1488. The expropriation of property for public use is governed by special laws.