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I. In General
A. Definition – Art. 1458 (1)
Art. 1458. By the contract of sale one of the
contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and
the other to pay therefor a price certain in money or
its equivalent.
Q: What is the nature of a sale?
A: It is a contract, a source of obligation.
B. History
Governing Law – RA No. 386 (August 30, 1950);
Arts. 1488, 1637
Commercial and Civil Sales
Art. 1488. The expropriation of property for public
use is governed by special laws. (1456)  ownership and to deliver a determinate thing, and
Art. 1637. The provisions of this Title are subject to
the rules laid down by the Mortgage Law and the
Land Registration Law with regard to immovable
property. (1537a)  Q: A obliged himself to deliver a certain thing to B.
Q: A and B entered into a contract. What law shall
govern?
A: If contracts are entered today, the Civil Code of
the Philippines will apply. The CCP took effect on
August 30, 1950. Civil sale is covered by the CCP;
commercial sale, by the Code of Commerce.
C. Characteristics
1. consensual – (Art. 1475) as distinguished from
real, because a contract of sale is perfected by mere
consent.
Art. 1475. The contract of sale is perfected at the
moment there is a me eting of minds upon the thing
which is the object of the contract and upon the
price.
From that moment, the parties may reciprocally
demand performance, subject to the provisions of
the law governing the form of contracts.
2. bilateral – (Art. 1458) because both parties are
bound by obligations dependent upon each other.
Art. 1458. By the contract of sale one of the
contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and
the other to pay therefor a price certain in money or
its equivalent.     #
A contract of sale may be absolute or conditional.
3. onerous – (Art. 1350) because to acquire rights,
valuable consideration must be given.
Art. 1350. In onerous contracts the cause is
understood to be, for each contracting party, the
prestation or promise of a thing or service by the
other; in remuneratory ones, the service or benefit
which is remunerated; and in contracts of pure
beneficence, the mere liberality of the benefactor.
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Sales Notes (Uribe)
4. commutative – (Art. 2010) as a rule, because
the values exchanged are almost equivalent to each
other.
Art. 2010. By an aleatory contract, one of the
parties or both reciprocally bind themselves to give
or to do something in consideration of what the
other shall give or do upon the happening of an
event which is uncertain, or which is to occur at an
indeterminate time.
5. principal – as distinguished from an accessory
contract, because for the contract of sale to validly
exist, there is no necessity for it to depend upon the
existence of another valid contract.
6. nominate – (Art. 1458) as distinguished from an
innominate contract, because the Code refers to it by a
special designation or name, i.e. the contract of sale.
Art. 1458. By the contract of sale one of the
contracting parties obligates himself to transfer the
the other to pay therefor a price certain in money or
its equivalent. 
Upon delivery, B would pay a sum of money to A.
What kind of contract?
A: It may be a contract of lease (no transfer of
ownership); it may be a contract of carriage. It cannot
be a contract of agency because in that contract,
the agent (B) does not pay for the price.
Q: A COS is essentially onerous and commutative?
A: Essentially onerous, but not always commutative --
- it may be aleatory, that is, what one receives
may in time be greater or smaller than that what
he has given.
Example: the sale of a genuine sweepstakes ticket
(Paras)
Q: Sale is perfected by delivery?
A: No. Perfected upon meeting of the minds as to the
thing which is the object of the contract and upon the
price. There can be no transfer of ownership
without delivery but delivery need not be
actual.(Baviera)
There can be no valid contract without meeting of
the minds because all kinds of contracts would require
such. (Uribe)
Sale of a right may also be perfected by mere
consent.
Ownership does not necessarily pass upon    ,
delivery because a COS may be absolute or    #
   "
conditional. If it is absolute, ownership passes    +
    *
upon delivery, absolute nga eh (no reservation of    &
ownership, so kahit wala pang bayad pwede). For    %
example, sobrang bait ng kaibigan mo diniliver na    )
   %
   (
sayo yung object pero sabi sige bayaran mo na lang    '
ako within the year (Uribe).    %
   &
   "
Q: Is Contract to Sell same as Conditional Contract of    %
   $
sale?    #
   "
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A: No. CTS is a kind of conditional sale, but not all A: Not necessarily. Because it pertains only to
conditional sale is a CTS. manner of payment and has nothing to do with the
transfer of ownership.
Q: In conditional sale, is ownership transferred upon
full payment of the price? Q: Example of real contracts?
A: No. Because full payment of the price may not be A: Both mutuum and commodatum; pledge, deposit
the condition, or may not be the only condition.
Kahit bayad ka na in full, pero kung may iba pang Q: Other characteristics of COS?
conditions na hindi nafufulfill, as in sale of a A: Bilateral --- which results in reciprocal obligations.
condominium, ownership is not transferred yet It cannot be unilateral because both parties have
(Uribe) obligations. Example of unilateral contract ---
commodatum
Q: Where does the Contract to sell
distinction lie between Q: Is a Contract of Sale gratuitous?
conditional contract of sale A: No. It is onerous otherwise the transfer of
and contract to sell (See ownership could be a donation. Note, donation is not a
Carrascoso, Jr. vs. contract, it is an act. (Uribe)
CA; Ursal vs. CA) Conditional
contract of sale Q: Is a Contract of Sale commutative?
1. The fulfillment of the 1. Upon fulfillment of A: Yes. Because the values exchanged are almost
suspensive condition renders the suspensive equivalent to each other. Ordinarily, the values
the sale absolute and affects condition, which is the should be equal. Why, dahil ganyan ang Pinoy.
the seller’s title thereto such full payment of the Canvass muna dito, canvass doon bago bumili ng
that if there had already been purchase price, isang bagay (Uribe)
previous delivery of the ownership will not
property subject of the sale to automatically transfe Q: Can a Contract of Sale be aleatory?
the buyer, ownership r to the buyer A: Yes, by way of exception. Example is the sale of a
thereto automatically transfer although the property sweepstakes ticket (sale of hope).
s to the buyer by operation of may have been Uribe: Sa ngayon around 340million ang jackpot.
law without any further act previously delivered The jackpot is napakalayo sa halaga ng 20pesos
having to be performed by the to him. The na pinambili mo ng lotto ticket.
seller. prospective seller still
has to convey title to Q: Why is there no equivalent of values in aleatory
the prospective buyer contracts?
by entering into a A: Because the obligation of the other party is not
contract of absolute certain to arise. In other words, because of the
sale. risk of fulfillment. (Uribe)

The obligation of the Q: Is there a sale formal in character?

seller to sell becomes A: Yes. Sale of a large cattle as you have learned in
demandable only your Oblicon (Uribe)
upon the happening
of the suspensive Q: Whether the thing is determinate or not, when
condition, that is, the would this be relevant?
full payment of the A: Under the concept of loss (Art. 1189) / obligation
purchase price by the to preserve the thing (Art. 1163)
buyer. It is only upon
the existence of the Art. 1189. When the conditions have bee n imposed
contract of sale that with the intention of suspending the efficacy of an
the seller becomes obligation to give, the following rules shall be
obligated to transfer observed in case of the improvement, loss or
the ownership of the deterioration of the thing during the pendency of
thing sold to the the condition: 
buyer. Prior to the (1) If the thing is lost without the fault of the
existence of the debtor, the obligation shall be extinguished.    #
contract of sale, the (2) If the thing is lost through the fault of the    ,
seller is not obligated debtor, he shall be obliged to pay damages; it    #
   "
   +
is understood that the thing is lost when it
to transfer the     *
ownership to the perishes, or goes out of commerce, or    &
buyer, even if there is disappears in such a way that its existence is    %
unknown or it cannot be recovered;     )
a contract to sell    %
   (
between them. (3) When the thing deteriorates without the    '
fault of the debtor, the impairment is to be    %
   &
borne by the creditor;     "
(4) If it deteriorates through the fault of the    %
   $
Q: Is sale on installments a conditional sale? debtor, the creditor may choose between the    #
   "

. 
 

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rescission of the obligation and its fulfillment, offered in lieu of

with indemnity for damages in either case;  the original
(5) If the thing is improved by its nature, or by credit.
time, the improvement shall inure to the 4. There is 4. There is
benefit of the creditor;  greater lesser freedom
(6) If it is improved at the expense of the freedom in in determining
debtor, he shall have no other right than that determining the price.
granted to the usufructuary. (1122) the price
5. the giving of 5. the giving of
Art. 1163. Every person obliged to give something the price may the object in lieu
is also obliged to take care of it with the proper generally end of the credit may
diligence of a good father of a family, unless the the obligation extinguish
law or the stipulation of the parties requires of the buyer. completely or
another standard of care. (1094a)  partially the
credit
Q: Sale of real property or personal property, under (depending upon
what concept of rules would this be relevant? the agreement)
A: Statute of Frauds (Art. 1403)/ Remedies/ Double NOTE: If the pre-existing obligation is not in
Sale (Article 1544)/ Prescription/ as to what law money, it will not be covered by the law on
should apple, that is, whether Maceda Law (for sales but the law on novation. Dacion may
Personal Property) or the Recto Law (for Real also be covered by the law on sales whether
Property) the pre-existing obligation is a debt in money.

Q: Distinguish Contract of Sale from Contract to Sell. Q: Why is there a need to distinguish Contract of sale
Taken from the case of Torcuator vs. Bernabe from dacion en pago?
Contract of Sale Contract to Sell A: To avoid confusion, because there are similarities
Title passes to the Ownership is between these two concepts.
buyer upon delivery reserved in the seller
of the thing sold. and is not to pass Q: What are these similarities?
until the full payment A: Both transactions may be governed by the law on
of the purchase price sales.
is made. Both transactions involve transfer of ownership.
Non-payment of the Full payment is a Both involve delivery. In sale, actual delivery; in
price is a negative positive suspensive dacion en pago, promise to deliver.
resolutory condition condition
The vendor has lost The title remains in Q: What about the distinctions?
and cannot recover the vendor if the A: It is most important to distinguish the nature first---
the ownership of the vendee does not Contract of sale is a contract, a source of
land sold until and comply with the obligation; dacion en pago is a mode of
unless the contract condition precedent extinguishment of obligation. (Refer to the table above)
of sale is itself of making payment at
resolved and set the time specified in Q: Distinguish Absolute sale from Conditional Sale
aside. the contract. A: Absolute sale – no condition
Conditional sale – there is a condition, as when
Q: Distinguish Contract of Sale from Dacion en Pago. there is a sale with a pacto de retro, a right to
Table taken from Paras repurchase or redeem; or when there are
Contract of Dacion en Pago suspensive conditions, or when the things sold merely
Sale possess a potential existence.
1. there is no 1. there is a pre-
pre-existing existing credit Q: A issued a receipt in the following tenor: “Received
credit from B the amount of 50T as partial payment for the car
2. gives rise to 2. extinguishes and the balance to be paid at the end of the month.
obligation obligation Signed by A. September 30. Contract to sell?
3. the cause or 3. the cause or A: No. For it to be a contract to sell, there must be
consideration consideration reservation of ownership. It cannot also be a contract    #
   ,
here is the
price from the
here from the
viewpoint of the
of sale because
absolute Contract of sale is of two kinds---
and conditional.    #
   "
   +
viewpoint of person offering     *
the seller; or the dation in Massachussetts Rule--- whether the contract is a    &
Contract of sale or contract for a piece of work.    %
the obtaining payment is the    )
of the object extinguishment Used in the Philippines. If specially done at the    %
   (
from the of his debt’ form order of another, this a contract for a piece of work.    '
   %
viewpoint of the viewpoint of    &
the buyer. the creditor, it is New York Rule --- If the thing already exists, it is a    "
SALE; if not, WORK.    %
   $
the acquisition of
   #
the object    "

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English Rule --- If material is more valuable, SALE;

if skill is more valuable, WORK. Art. 1403. The following contracts are
unenforceable, unless they are ratified:
A contract of sale is normally commutative and x x x (2) Those that do not comply with the
onerous: not only does each one of the parties assume Statute of Frauds as set forth in this number. In the
a correlative obligation (the seller to deliver and following cases an agreement hereafter made shall
transfer ownership of the thing sold and the buyer to be unenforceable by action, unless the same, or
pay the price),but each party anticipates performance some note or memorandum, thereof, be in writing,
by the other from the very start. While in a sale and subscribed by the party charged, or by his
the obligation of one party can be lawfully subordinated agent; evidence, therefore, of the agreement
to an uncertain event, so that the other understands cannot be received without the writing, or a
that he assumes the risk of receiving nothing for secondary evidence of its contents:
what he gives (as in the case of a sale of hopes or (a) An agreement that by its terms is
expectations, emptio spei ), it is not in the usual course not to be performed within a year
of business to do so; hence, the contingent from the making thereof; 
character of the obligation must clearly appear. (Gaite (b) A special promise to answer for
vs. Fonacier) the debt, default, or miscarriage of
another; 
Sale is essentially onerous, and if there is doubt as (c) An agreement made in
to whether the parties intended a suspensive condition consideration of marriage, other than
or a suspensive period for the payment of the a mutual promise to marry; 
agreed price, the doubt shall be settled in favor of the (d) An agreement for the sale of
greatest reciprocity of interests, which will obtain if the goods, chattels or things in action, at
buyer’s obligation is is deemed to be actually a price not less than five hundred
existing, with only its maturity postponed or deferred. pesos, unless the buyer accept and
(Id.) receive part of such goods and
chattels, or the evidences, or some
D. Stages of them, of such things in action or
pay at the time some part of the
1. Negotiation/ Preparation purchase money; but when a sale is
2. Perfection – Arts. 1315, 1475 made by auction and entry is made
Art. 1315. Contracts are perfected by mere consent, by the auctioneer in his sales book,
and from that moment the parties are bound not at the time of the sale, of the amount
only to the fulfillment of what has been expressly and kind of property sold, terms of
stipulated but also to all the consequences which, sale, price, names of the purchasers
according to their nature, may be in keeping with and person on whose account the
good faith, usage and law. sale is made, it is a sufficient
memorandum; 
Art. 1475. The contract of sale is perfected at the (e) An agreement of the leasing for a
moment there is a me eting of minds upon the thing longer period than one year, or for
which is the object of the contract and upon the the sale of real property or of an
price. interest therein; 
(f) A representation as to the credit of
From that moment, the parties may reciprocally a third person. 
demand performance, subject to the provisions of
the law governing the form of contracts.

3. Performance – Arts. 1191, 1403 (2) Q: What are the Stages of a contract?
Art. 1191. The power to rescind obligations is A: Negotiation, perfection, performanc e,
implied in reciprocal ones, in case one of the consummation. Negotiation is initiated by an offer.
obligors should not comply with what is incumbent Perfection is initiated by the offerer.
upon him.
Q: When is a contract of sale perfected?
The injured party may choose between the A: Upon meeting of the minds upon the thing which is
fulfillment and the rescission of the obligation, with the object of the contract and upon the price. Object    #
the payment of damages in either case. He may can be a thing or a right, but not a service because    ,
also seek rescission, even after he has chosen service cannot be a subject of transfer of    #
   "
   +
fulfillment, if the latter should become impossible. ownership.
    *
   &
The court shall decree the rescission claimed, Q: What are the examples of a perfected contract but    %
unless there be just cause authorizing the fixing of unenforceable?    )
   %
   (
a period. A: Unenforceable contracts such as those covered by    '
the Statute of Frauds.    %
   &
This is understood to be without prejudice to the    "
rights of third persons who have acquired the E. Kinds of Sale – Arts. 1458 (2), 1488, 1544,    %
   $
thing, in accordance with Articles 1385 and 1388 1403, Maceda Law, Recto Law, 1477, 1501    #
and the Mortgage Law.
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Art. 1458. (2) A contract of sale may be absolute or
conditional.
Art. 1488. The expropriation of property for public
use is governed by special laws.
Art. 1544. If the same thing should have been sold
to different vendees, the ownership shall be
transferred to the person who may have first taken
possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership
shall belong to the person acquiring it who in good
faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall
pertain to the person who in good faith was first in
the possession; and, in the absence thereof, to the
person who presents the oldest title, provided
there is good faith.
Art. 1403. The following contracts are
unenforceable, unless they are ratified:
(1) Those entered into in the name of another
person by one who has been given no
authority or legal representation, or who has
acted beyond his powers; 
(2) Those that do not comply with the Statute
of Frauds as set forth in this number. In the
following cases an agreement hereafter made
shall be unenforceable by action, unless the
same, or some note or memorandum, thereof,
be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore,
of the agreement cannot be received without
the writing, or a secondary evidence of its
contents:  means of buying personal property without sufficient
(a) An agreement that by its terms is
not to be performed within a year
from the making thereof;  *The provision is also applicable to financing
(b) A special promise to answer for
the debt, default, or miscarriage of
another; 
(c) An agreement made in
consideration of marriage, other than
a mutual promise to marry;  vendor may exercise any of the following
(d) An agreement for the sale of
goods, chattels or things in action, at
a price not less than five hundred
pesos, unless the buyer accept and
receive part of such goods and
chattels, or the evidences, or some
of them, of such things in action or
pay at the time some part of the
purchase money; but when a sale is
made by auction and entry is made
by the auctioneer in his sales book,
at the time of the sale, of the amount
and kind of property sold, terms of
sale, price, names of the purchasers
and person on whose account the
sale is made, it is a sufficient
memorandum;     "
(e) An agreement of the leasing for a
longer period than one year, or for
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Sales Notes (Uribe)
the sale of real property or of an
interest therein; 
(f) A representation as to the credit of
a third person. 
(3) Those where both parties are incapable of
giving consent to a contract. 
Maceda Law in the Phillippines applies to the purchaser
of real property by installment payments when the
purchase becomes cancelled by a delinquency in
payment. It provides the buyer with a right to a refund
as a requisite for cancellation of contract due to
delinquency when the buyer has paid at least two
years. The refund is 50% of total payments; additional
5% per year after 5th year.
Article 1484 incorporates Act No. 4122 better known as
"Recto law" or installment sales law, in which the
vendor can exercise the following remedies.
1. Exact fulfillment, should the buyer failed to pay any
installments
2. Cancel the sale, should the buyer's failure to cover
two or more installments
3. Foreclose the chattel mortgage on the thing sold if
one is constituted, should the buyer's failure to cover
two or more installments.
*The remedies are recognized as alternatives and not
cumulative, should the buyer chose to foreclose the
chattel mortgage he/she cannot exercise the other two
remedies
*The rationale of the law is to prevent the abuses in
terms of chattel mortgages where the buyer can buy the
property at a lower price in the foreclosure sale. It also
aims to correct the evil created by desire for luxury by
means
transactions derived or arising from sale of movables
on installments.
Art. 1484. In a contract of sale of personal property
the price of which is payable in installments, the
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.    &
   %
Art. 1477. The ownership of the thing sold shall be    )
   %
   (
transferred to the vendee upon the actual or    '
constructive delivery thereof.    %
   &
Art. 1501. With respect to incorporeal property, the    %
   $
provisions of the first paragraph of article 1498    #
shall govern. In any other case wherein said
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provisions are not applicable, the placing of the
titles of ownership in the possession of the ve ndee
or the use by the vendee of his rights, with the
vendor's consent, shall be understood as a
delivery.
Art. 1498. (1) 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 dee d the contrary
does not appear or cannot clearly be inferred.
1. As to the nature of the subject matter
a. Sale of real property
b. Sale of personal property
2. As to whether the object is tangible or
intangible/ corporeal or incorporeal
a. sale of thing
b. sale of right
3. As to validity or defect of the transaction
a. valid sale
b. rescissible
c. voidable
d. unenforceable
e. void
4. As to the presence or absence of
condition
a. absolute sale
b. conditional sale
contract to sell
Where by a a writing in Manila seller guaranteed “the
arrival of the tobacco in New York in good condition,”
and at the time the tobacco was in transit on the high
seas and by its term the tobacco was to be delivered in
New York, the contract was executor and the title to it
did not pass until the arrival of the tobacco in New York.
The contract was executor and the sale was not
complete until after the “arrival of the tobacco in New
York in good condition.” (McCullough vs. Berger)
The provisions of paragraph 3, Article 1544 of the Civil
Code, do not apply to a case where the sale in favor of
one party was of the property   itself, while the
transaction in favor of another was either a mere
promise to assign or, at most, an actual assignment of
the right to repurchase  the same property. (Dichoso vs.
Roxas)
In contracts to sell, where ownership is retained by the
seller and is not to pass until the full payment of the
price, such payment, as we said, is a positive
suspensive condition, the failure of which is not a
breach, casual or serious, but simply an event that
prevented the obligation of the vendor to convey title
from acquiring binding force, in accordance with Article
1117 of the Old Civil Code. To argue that there was
only a casual breach is to proceed from the assumption
that the contract is one of absolute sale, where non-
payment is a resolutory condition. (Luzon Brokerage vs.
Maritime Building)
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Sales Notes (Uribe)
A judicial action for the rescission of a contract is not
necessary where the contract provides that it may be
revoked and cancelled for violation of any of its terms
and conditions. (Id.)
While generally the registered owner of a property is
the proper party to bring an action to quiet title, the
remedy may also be availed of by a person other than
the registered owner. (Portic vs. Cristobal)
In a contract to sell ownership is retained by the vendor
and it will not pass to the vendee until full payment of
the purchase price. (Id.)
Registration does not vest, but merely serves as
evidence of title. (Id.)
It is settled that a perfected contract of sale cannot be
challenged on the ground of the non-transfer of
ownership of the property sold at that time of the
perfection of the contract, since it is consummated upon
delivery of the property to the vendee. It is through
tradition or delivery that the buyer acquires ownership
of the property sold. As provided in Article 1458 of the
New Civil Code, when the sale is made through a public
instrument, the execution thereof is equivalent to the
delivery of the thing which is the object of the contract,
unless the contrary appears or can be inferred. The
record of the sale with the Register of Deeds and the
issuance of the certificate of title in the name of the
buyer over the property merely bind third parties to the
sale. (Heirs of Jesus Mascunana vs. CA)
A deed of sale is considered absolute in nature where
there is neither a stipulation in the deed that title to the
property sold is reserved in the seller until full payment
of the price, nor one giving the vendor the right to
unilaterally resolve the contract the moment the buyer
fails to pay within a fixed period. (Id.)
The condition in the deed that the balance shall be paid
to the vendor by the vendee as soon as the property
sold shall have been surveyed in the name of the
vendee and all papers pertinent and necessary to the
issuance of a separate certificate of title in the name of
the vendee shall have been prepared is not a condition
which prevented the efficacy of the contract of sale.(Id.)
Article 1169 of the New Civil Code provides that in
reciprocal obligations, neither party incurs in delay if the
other does not comply or is not ready to comply in a
proper manner with what is incumbent upon him; from
the moment one of the parties fulfills his obligation,
delay by the other begins. (Id.)
   #
Banks cannot merely rely on certificates of title in    ,
ascertaining the status of mortgaged properties; as their    #
   "
   +
business is impressed with public interes, they are
    *
expected to exercise more care and prudence in their    &
dealings than private individuals. (Ursal vs. CA)    %
   )
   %
   (
A contract to sell is a bilateral contract whereby the    '
prospective seller, while expressly reserving the    %
   &
ownership of the subject property despite delivery    "
therof to the prospective buyer, binds himself to sell the    %
   $
said property exclusively to the prospective buyer upon    #
   "
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fulfillment of the condition agreed upon, that is, full

payment of the purchase price. (Id.)
Reciprocal obligations are those which arise from the
same cause, and in which each party is a debtor and a
creditor of the other, such that the obligation of one is
dependent upon the obligation of the other. They are to
be performed simultaneously such that the performance
of one is conditioned
upon the simultaneous fulfillment
of the other. A contract of sale is a reciprocal obligation.
The seller obligates itself to transfer the ownership of
and deliver a determinate thing, and the buyer obligates
itself to pay therefor a price certain in money or its
equivalent. (Carrascosos, Jr. vs. CA)
A notice of lis pendens  is an announcement to the
whole world that a particular real property is in litigation,
and serves as a warning that one who acquires an
interest over said property does so at his own risk, or
that he gambles on the result of the litigation over said
property. (Id.)
In a conditional contract of sale, if the suspensive
condition is fulfilled, the contract of sale is thereby
perfected, such that if there had already been previous
delivery of the property subject of the sale to the buyer,
ownership thereto automatically transfers to the buyer
by operation of law without any further act having to be
performed by the seller. Whereas in a contract to sell,
upon fulfillment of the suspensive condition, ownership
will not automatically transfer to the buyer although
the property may have been previously delivered to
him. The prospective seller still has to convey title to the
prospective buyer by entering into a contract of
absolute sale. (Id.)
Knowledge of facts acquired or possessed by an officer
or agent of a corporation in the course of his
employment, and in relation to matters within the scope
of his authority, is notice to the corporation, whether he
communicates such knowledge or not. (Id.)
A non-existent obligation cannot be a subject of
rescission. (Sacobia Hills Development Corporation vs.
Ty)
A contract of sale is defined as an agreement whereby
one of the contracting parties obligates himself to
transfer the ownership and to deliver a determinate
thing, and the other to pay the price certain in money or
its equivalent. (Edrada vs. Ramos)
1. Contract for a piece of work
(Massachusetts rule) – Art. 1467
Art. 1467. A contract for the delivery at a certain
price of an article which the vendor in the ordinary
course of his business manufactures or procures
for the general market, whether the same is on
hand at the time or not, is a contract of sale, but if
the goods are to be manufactured specially for the
customer and upon his special order, and not for
the general market, it is a contract for a piece of
work.
Q: A and B went to an outlet of shoes. A, not finding
any pair of shoes which fits him, had to order a pair of
shoes, to be delivered after 15months according to
the verbal agreement between A and the store owner.
A’s shoe size is 23inches. B found a picture of
shoes in the store normally sold in the market but not
available at that time, to be delivered after
15months, at P5,000 per pair, payment upon
delivery. Contract for a piece of work?
A: As to A, it is a contract for a piece of work. But as
to B, it is contract of sale.
Q: May the contracts entered into by A and B covered
by the Statute of Frauds?
A: Both YES. Article 1403(2a)—An agreement that by
its terms is not to be performed within a year (in this
case 15months pa nga eh) from the making
thereof.
Q: What if the agreement for delivery is 6months,
covered by Statute of Frauds?
A: Yes. Article 1403(2d)—an agreement for the sale
of goods, chattels or things in action, at a price not less
than 500 pesos shall be in writing.
2. Contract of Lease with option to buy –
Art. 1485
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.
3. Dacion en Pago – Art. 1245
Art. 1245. Dation in payment, whereby property is
alienated to the creditor in satisfaction of a debt in
money, shall be governed by the law of sales.

The fact that there is a stated total purchase price 4. Barter or Exchange – Arts. 1468,
should not lead to the conclusion that a contract of sale 1638, 1954
had been perfected --- before a valid and binding Art. 1468. If the consideration of the contract    #
contract of sale can exist, the manner of payment of the consists partly in money, and partly in another    ,
purchase price must first be established, as such thing, the transaction shall be characterized by the    #
   "
   +
stands as essential to the validity of the sale. (Id.) manifest intention of the parties. If such intention
    *
does not clearly appear, it shall be considered a    &
A requisite for the judicial enforcement of an obligation barter if the value of the thing given as a part of the    %
is that the same time is due and demandable. The consideration exceeds the amount of the money or    )
   %
   (
absence of a stipulated by which the purchase price its equivalent; otherwise, it is a sale.    '
should be paid indicates that at the time of filing of the    %
   &
complaint, the obligation to pay was not yet due and Art. 1638. By the contract of barter or e xchange one    "
demandable. (Id.) of the parties binds himself to give one thing in    %
   $
consideration of the other's promise to give    #
F. Distinguished from other transactions another thing.
   "

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Art. 1954. A contract whereby one person transfers
the ownership of non-fungible things to another
with the obligation on the part of the latter to give
things of the same kind, quantity, and quality shall
be considered a barter.
Q: Agreement between A and B. A obliged himself to
deliver a watch valued at 800,000. B obliged himself to
give his car plus 350,000.What law?
A: Article 1468— If the consideration of the contract
consists partly in money, and partly in another thing, the
transaction shall be characterized by the manifest
intention of the parties. If such intention does not clearly
appear, it shall be considered a BARTER if the
value of the THING GIVEN AS A PART OF THE
CONSIDERATION (in this case CAR) exceeds
the amount of the money or its equivalent; otherwise, it
is a sale.
Thus, if the value of the car exceeds 350,000 –
BARTER.
If the value of the car is equal or lower than
350,000 --- SALE
The price of watch is irrelevant.
Q: May the Law on Barter be applicable to Law on
Sales?
A: If the agreement is not covered by the provision of
the Law on Barter, it will be covered by the Law on
Sales.
5. Agency to sell – Art. 1466
Art. 1466. In construing a contract containing
provisions characteristic of both the contract of
sale and of the contract of agency to sell, the
essential clauses of the whole instrument shall be
considered.
Q: A obliged himself to deliver maong pants to B
which will be sold by B in Isabela. It was stipulated in
the contract that B has to pay the price of maong
within 30days from delivery to B. It was stipulated that B
will receive 20% commission on sale. The
maong pants were delivered to B. However, before B
could sell the goods, the store was burned. Can B be
compelled to pay the price?
A: YES.(Note: This case is similar to Quiroga vs.
Parsons) Apply Article 1466—In construing a contract
characteristic of both the contract of sale and of the
contract of agency to sell, the ESSENTIAL CLAUSES of
the whole instrument shall be considered.
In the instant case, it is a contract of sale.
Because of the stipulation that B has to pay the maong
pants within 30days regardless of whether or not B
sold the maong pants. It is contrary to an agency to sell
where the agent has the obligation to deliver the price
upn delivery. With delivery, ownership passes to B.
Apply the principle of res perit domino   – the buyer
(B) bears the loss. Therefore, he has to pay the
price.
Note: Agency does not always involve a contract.
It may only be an instrumentality. (Uribe)
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Sales Notes (Uribe)
The fact that the price of the machine was fixed in
the contract makes the latter not a lease but a purchase
and sale because in contracts of lease, as
distinguished from those of purchase and sale, it is
plain redundancy to fix or make any mention of the
price of the thing given in lease. (Heacock Co.
vs. Buntal Manufacturing Co. and Nieva)
In order to classify a contract, due regard must be
given to its essential clauses. In the contract in
question, what was essential, as constituting its
cause and subject matter, is that the plaintiff was
to furnish the defendant with the beds which the
latter might order, at the price stipulated, and that
the defendant was to pay the price in the manner
stipulated. These are precisely the essential
features of a contract of purchase and sale. There
was the obligation on the part of the plaintiff to
supply the beds, and, on the part of the defendant,
to pay their price. These features exclude the legal
conception of an agency or order to sell whereby
the mandatory or agent received the thing to sell it,
and does not pay its price, but delivers to the
principal the price he obtains from the sale of the
thing to a third person, and if he does not succeed
in selling it, he returns it. By virtue of the contract
between the plaintiff and the defendant, the latter,
on receiving the beds, was necessarily obliged to
pay their price within the term fixed, without any
other consideration and regardless as to whether
he had or had not sold the beds. (Quiroga vs.
Parsons Hardware)
II. Essential Elements of a Contract of Sale
A. Essential Elements
1. Consent of the Contracting Parties
Parties to the Contract
Capacity of the Parties – Arts. 1489,
1390, 1403
a. absolute – Arts. 1327, 1328,
Art. 234 Family Code as amended by RA 6809
b. relative – Art. XII, Secs. 7 & 8,
1987 Constitution
Arts. 1490-1492, 1533(5),
1476(4), Art. 124 Family Code
Art. 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.    #
   "
   +
    *
Art. 1390. The following contracts are voidable or    &
annullable, even though there may have been no    %
damage to the contracting parties:     )
   %
   (
(1) Those where one of the parties is incapable    '
of giving consent to a contract;     %
   &
(2) Those where the consent is vitiated by    "
mistake, violence, intimidation, undue    %
   $
influence or fraud.     #
   "
4 
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These contracts are binding, unless they are annulled Art. 234 Family Code. Emancipation takes
by a proper action in court. They are susceptible of place by attainment of majority. Unless
ratification. otherwise provided, majority commences at
the age of eighteen years.  (As amended by RA
Art. 1403. The following contracts are unenforceable, 6809)
unless they are ratified: 
(1) Those entered into in the name of another 1987 Constitution. Article XII. Section 7. Save in
person by one who has been given no cases of hereditary succession, no private lands shall be
authority or legal representation, or who has transferred or conveyed except to individuals, corporations,
acted beyond his powers;  or associations qualified to acquire or hold
(2) Those that do not comply with the Statute lands of the public domain.
of Frauds as set forth in this number. In the
following cases an agreement hereafter made Section 8. Notwithstanding the provisions of
shall be unenforceable by action, unless the Section 7 of this Article, a natural-born citizen of the
same, or some note or memorandum, thereof, Philippines who has lost his Philippine citizenship
be in writing, and subscribed by the party may be a transferee of private lands, subject to
charged, or by his agent; evidence, therefore, limitations provided by law.
of the agreement cannot be received without
the writing, or a secondary evidence of its Art. 1490. The husband and the wife cannot
contents:  sell property to each other, except: 
(a) An agreement that by its terms is (1) When a separation of property was agreed
not to be performed within a year from the upon in the marriage settlements; or 
making thereof;  (2) When there has been a judicial separation
(b) A special promise to answer for or property under Article 191. (1458a) 
the debt, default, or miscarriage of
another;  Art. 1491. The following persons cannot
(c) An agreement made in acquire by purchase, even at a public or judicial
consideration of marriage, other than auction, either in person or through the
a mutual promise to marry;  mediation of another: 
(d) An agreement for the sale of (1) The guardian, the property of the person or
goods, chattels or things in action, at persons who may be under his guardianship; 
a price not less than five hundred (2) Agents, the property whose administration
pesos, unless the buyer accept and or sale may have been entrusted to them,
receive part of such goods and unless the consent of the principal has been
chattels, or the evidences, or some given; 
of them, of such things in action or (3) Executors and administrators, the property
pay at the time some part of the of the e state under administration; 
purchase money; but when a sale is (4) Public officers and employees, the property
made by auction and entry is made of the State or of any subdivision thereof, or of
by the auctioneer in his sales book, any government-owned or controlled
at the time of the sale, of the amount corporation, or institution, the administration
and kind of property sold, terms of of which has been intrusted to them; this
sale, price, names of the purchasers provision shall apply to judges and
and person on whose account the government experts who, in any manner
sale is made, it is a sufficient whatsoever, take part in the sale; 
memorandum;  (5) Justices, judges, prosecuting attorneys,
(e) An agreement of the leasing for a clerks of superior and inferior courts, and
longer period than one year, or for other officers and employees connected with
the sale of real property or of an the administration of justice, the property and
interest therein;  rights in litigation or levied upon an execution
(f) A representation as to the credit of before the court within whose jurisdiction or
a third person.  territory they exercise their respective
(3) Those where both parties are incapable of functions; this prohibition includes the act of
giving consent to a contract. acquiring by assignment and shall apply to
lawyers, with respect to the property and    #
Art. 1327. The following cannot give consent to rights which may be the object of any litigation    ,
a contract: in which they may take part by virtue of their    #
   "
   +
(1) Unemancipated minors;  profession. 
    *
(2) Insane or demented persons, and deaf- (6) Any others specially disqualified by law.    &
mutes who do not know how to write.    %
Art. 1492. The prohibitions in the two    )
   %
   (
Art. 1328. Contracts entered into during a lucid preceding articles are applicable to sales in legal    '
interval are valid. Contracts agreed to in a redemption, compromises and    %
   &
state of drunkenness or during a hypnotic renunciations.    "
spell are voidable.    %
   $
Art. 1533. x x x (5) The seller is bound to    #
exercise reasonable care and judgment in making
   "

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a resale, and subject to this requirement may contract. Tengena ang arte. The essential
make a resale either by public or private sale. He elements of a contract of sale are:
cannot, however, directly or indirectly buy the goods.  1. Consent of the CONTRACTING PARTIES—not
 just one party, but both of them. Otherwise the
Art. 1476. In the case of a sale by auction:  contract may be void, voidable, unenforceable.
(1) Where goods are put up for sale by auction 2. Subject Matter—may be right or thing
in lots, each lot is the subject of a separate 3. Cause—As to the buyer, it is the obtaining of
contract of sale.  the object. As to the seller, it is the delivery of the
(2) A sale by auction is perfected when the price.
auctioneer announces its perfection by the fall
of the hammer, or in other customary manner. Q: Can there be a Contract of Sale where the parties
Until such announcement is made, any bidder did not actually give consent?
may retract his bid; and the auctioneer may A: Yes. Absolutely simulated contracts. Both parties
withdraw the goods from the sale unless the did not actually intend to bind themselves.
auction has been announced to be without
reserve.  Q: What may be the purpose in entering this
(3) A right to bid may be reserved expressly by absolutely simulated contract?
or on behalf of the seller, unless otherwise A: To defraud creditors (third person); debtor ang
provided by law or by stipulation.  seller—meaning debtor-seller will simulate a sale
(4) Where notice has not been given that a sale para kunwari wala na syang property na pwedeng
by auction is subject to a right to bid on behalf habulin ng creditor.
of the seller, it shall not be lawful for the seller
to bid himself or to employ or induce any Q: What about the reason for entering a relatively
person to bid at such sale on his behalf or for simulated contract?
the auctioneer, to employ or induce any A: To lessen taxes.
person to bid at such sale on behalf of the
seller or knowingly to take any bid from the Q: Consent was given by both parties. Status of the
seller or any person employed by him. Any contract?
sale contravening this rule may be treated as A: It depends on whether the parties are capable to
fraudulent by the buyer. give consent or not. If only one is capacitated---
VOIDABLE; if both are incapacitated—
Art. 124. The administration and enjoyment of UNENFORCEABLE. Lack of consent--- VOID
the conjugal partnership shall belong to both
spouses jointly. In case of disagreement, the Q: May service be an object of a contract of sale?
husband's decision shall prevail, subject to A: NO. Service cannot be the subject of ownership.
recourse to the court by the wife for proper remedy,
which must be availed of within five ye ars from the Q: What may transpire if the parties did not give
date of the contract implementing such decision. consent?
A: Relative or Absolute contract. Both parties did not
intend to be bound. These are called fictitious
or In the event
otherwise that one
unable to spouse is incapacitated
participate in the contracts. And this is usually committed by
FORGERY.
administration of the conjugal properties, the
other spouse may assume sole powers of
Q: Contract of Sale, one party is a minor. Guardian
administration. These powers do not include
wants to annul the contract. What instances in
disposition or encumbrance without authority of the
which annulment is not an option?
court or the written consent of the other spouse. In the
A: Contract of necessaries (Article 1489);
absence of such authority or consent, the disposition
Misrepresentation, as when the minor misrepresented
or encumbrance shall be void. However, the
that he is of aged.
transaction shall be construed as a
continuing offer on the part of the consenting
Q: In contract of necessaries, is the contract valid and
spouse and the third person, and may be
binding?
perfected as a binding contract upon the
A: It depends if the price is reasonable.
acceptance by the other spouse or
authorization by the court before the offer is
withdrawn by either or both offerors.
Q: Contract of sale, one party is an alien. Status of    #
sale?    ,
Q: Is delivery an essential element?
A: It depends on the subject matter—kase land   lang    #
   "
   +
  ang bawal nila i-acquire. It also depends on whether
A: NO.     *
the alien is the buyer or the seller. If the alen is the    &
buyer, void. Because he is prohibited from    %
Q: What are the essential elements of a contract of acquiring. If he is the seller, it is valid because he may    )
   %
   (
sale? dispose.    '
A: Consent, Subject matter, Cause--- WRONG!!!    %
Isang malaking WRONG para kay Uribe. These    &
Requirement for an alien to acquire lands located    "
are essential elements of a contract, and not a in the Phils.:    %
   $
contract of sale. A contract of sale is a special 1. natural-born Filipino citizen (allowed only to    #
acquire residential lands) Article XII, Sec. 3, 7, 8
   "

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through hereditary succession entitled only to the eastern portion. The western portion
must be given to the spouses. The Narcsissos are
Remember the case of Rubias vs. Batiller   not buyers in good faith. Before the sale is made, they
“The permanent disqualification  of public and went to the spouses to ask if they (spouses) permit
 judicial officers and lawyers grounded on  public their brother to sell the lot. It only means that Narcissos
policy differs from the first three cases of are aware that the spouses possessed the lot.
guardians, agents and administrators (Article 1491,
Contracts without a cause or consideration produce no
Civil Code), as to whose transactions it had been effect whatsoever. The statement of a false cause
opined that they may be "ratified" by means of and in renders the contract voidable, unless it is supported by
"the form of a new contract , in which cases its another real   and licit   consideration. Inexistent contract
validity shall be determined only by the cannot be the subject of prescription. (Mapalo vs.
circumstances at the time the execution of such Mapalo)
new contract. The causes of nullity which have
Sale of land by a non-Christian inhabitant without
ceased to exist cannot impair the validity of the
approval of provincial governor is null and void for lack
new contract. Thus, the object which was illegal at of executive approval. (Miguel vs. Catalino)
the time of the first contract, may have already
become lawful at the time of the ratification or As a rule, only a Filipino citizen can acquire private
second contract; or the service which was lands in the Philippines and the only instances when a
impossible may have become possible; or the intention foreigner can own private lands are by hereditary
succession and if he was formerly a natural-born
which could not be ascertained may have been
Filipino citizen who lost his Philippine citizenship.
clarified by the parties. The ratification or second
(Estate of Salvador Serra Serra vs. Heirs of Primitivo
contract would then be valid from its execution ; Hernaez)
however, it does not retroact to the date of the
first contract." A party’s alleged possession of TCT and actual
possession of the subject land, although strong proof of
Uribe: Contract involving the Guardian, Agent, ownership, are not necessarily conclusive where the
Executor are merely voidable because they may assertion of proprietary rights is founded on dubious
be “ratified.” Why enclosed in quotation marks? claim of ownership. (Id.)
Because it is not ratification used in the same
sense as in voidable contracts. It does not
retroact to the date of the first contract. 2. Subject Matter (things and
rights) – Arts. 1347, 1311, 1636 (goods)
Q: Does the civil code supports this voidable theory?
A: Yes. In 1409 (7) – The following contracts are Requisites – Art. 1458(1),
inexistent and void from the beginning: (7) those 1459-1462, 1347-1349
expressly PROHIBITED or declared void by law. Rules on the object of a
contract of sale – Arts. 1463-1465
In 1491, it is state “the following persons Assignment of Credit and
CANNOT…” --- meaning “di pwede”. Ang point ni Uribe, other incorporeal rights – Arts. 1624-1635
walang sinabi sa 1491 na VOID, di tulad sa
1409(7) na express yung pagsasabi na VOID. Right as an object is not a SALE but ASSIGNMENT. It
may be in the form of donation or dacion en pago. The
But De Leon said that if 1490 is violated, it is SC is consistent that dacion en pago involves not a
VOID. And 1490 has the same reason as in 1491, thing but a RIGHT.
that is, on grounds of public policy, therefore there Requirement as to RIGHT:
is n reason to distinguish them. Both articles are void if  
• It must not be intransmissible –
violated. Ewan ko na kung alin ang paniniwalaan. But Article 1311
for me mas maganda yung view ni De Leon na both
rd
1490 and 1491 are grounded on public policy therefore Sale of a right to bind 3  persons, requires: Art. 1625.
VOID if violated. I don’t adhere to jurisprudence, An assignment of a credit, right or action shall
because it may be reversed at any time lalo na at ang produce no effect as against third person, unless it
Supreme Court ay by division kung magdecide, appears in a public instrument, or the instrument is    #
recorded in the Registry of Property in case    ,
buti sana kung laging en banc. (Saba, hahaha) the assignment involves real property.    #
   "
   +
Case of Mapalo vs. Mapalo if Personal property—must be in a public     *
   &
st
1  contract – eastern portion—this is donation—no instrument
problem here because spouses Mapalo actually if real property—must be registered    %
   )
gave consent.    %
   (
   '
nd
2  contract—this is the one in controversy—this is Requirement as to THING:
  must not be outside the commerce    %
the sale. Because Miguel (the donee) sold the •
   &
lot (east and west) to Narcisso. The western part of man    "
cannot be sold by Miguel, because that belonged    %
   $
Q: Sale of a generic thing, valid sale?    #
to the spouses. And since the spouses did not give    "
consent to the sale, the same is VOID. Narcisso is

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A: Yes. 1) if capable of being made determinate; 2)
without the need of further new agreement; 3) at
the time the contract is entered into.
Q: Sale of a dog?
A: VOID. Not determinate.
Q: Sale of a car when would be valid?
A: Honda Civic, 2006 model, red color for 1M.
Q: Emptio rei sperati, meaning?
A: Sale of future things.
Q: A obliged himself to deliver to B 100 cavans of
palay that will be harvested from a specific ricefield in
December 2011.
What if by August no palay was harvested? Status
off the sale?
A: There are 2 issues here – one is that the object is
not yet in existence and another, that there was
failure to deliver.
Art. 1462 – Future goods may the object of sale.
May A be held liable for damages. In answering
this question it is important to know what is the
cause of the failure to harvest. Failure to deliver
goes into the performance, it does not affect the
validity of the sale. If fortuitous event, A is not
liable. If A is guilty of fraud or negligence, he is
liable for damages under Article 1170
Q: Sale of a lotto ticket drawn a week ago?
A: VOID only if sale of VAIN HOPE, meaning kapag
yung ticket TALO. Pero kung nanalo yung ticket, it is
valid because in that case RIGHT na yung binebenta
hence hindi na SALE OF VAIN HOPE.
Q: Why sell a winning ticket?
A: To avoid identification, as when the winner lives in
Mindanao. It is not safe to go to Manila to claim the
prize.
Q: Sale of a parcel of land to B with a right to
repurchase within one year. A delivered the land to B
(by the execution of the document ha, not actual
delivery). On the 5th month, B sold the land to
th
C. However, on the 9   month, A offered to
repurchase the land.
Status of the sale between B and C? Who has a
better right?
A: Sale between B and C is valid. Things subject to
resolutory condition may be the object of a contract
of sale. Article 1465. Even in sale with right to
repurchase ownership passes to the buyer upon
delivery. However it is subject to resolutory condition.
Ordinarily, A has a better right if he exercised the
redemption within the period stipulated. Except,
if C proves that he is a buyer in good faith and for
value—that is, that A did not register his right to
repurchase. Registration serves as constructive
notice to C. But even if A’s right is not registered,
if C is aware of A’s right to repurchase, C cannot
claim good faith because that is actual notice.
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Sales Notes (Uribe)
Q: In order for the sale to be valid, seller must have a
right?
A: Ownership has nothing to do with the validity of
the sale. As long as the 3 essential elements are
present, it is valid. It is only required that the seller
must have a right at the time the object is delivered.
Whether or not the seller has a right to transfer will only
go to the performance of his obligation. If he did
not comply with his obligation, he may be liable.
Right of State to recover non-registrable land does not
prescribe. (Martinez vs. CA)
3. Cause- Arts. 1350, 1352-1353
Price Certain in money – Arts.
1469, 1471-1474, 1308; RA 529, RA 8183, PD 72
Lesion – Arts. 1470, 1355
Art. 1350. In onerous contracts the cause is understood
to be, for each contracting party, the prestation or
promise of a thing or service by the other; in
remuneratory ones, the service or benefit which is
remunerated; and in contracts of pure beneficence, the
mere liberality of the benefactor.
Art. 1352. Contracts without cause, or with unlawful
cause, produce no effect whatever. The cause is
unlawful if it is contrary to law, morals, good customs,
public order or public policy.
Art. 1353. The statement of a false cause in contracts
shall render them void, if it should not be proved that
they were founded upon another cause which is true
and lawful.
Art. 1469. In order that the price may be considered
certain, it shall be sufficient that it be so with reference
to another thing certain, or that the determination
thereof be left to the judgment of a special person or
persons.
Should such person or persons be unable or unwilling
to fix it, the contract shall be inefficacious, unless the
parties subsequently agree upon the price.
If the third person or persons acted in bad faith or by
mistake, the courts may fix the price.
Where such third person or persons are prevented from
fixing the price or terms by fault of the seller or the
buyer, the party not in fault may have such remedies
against the party in fault as are allowed the seller or the
buyer, as the case may be.
   #
Art. 1471. If the price is simulated, the sale is void, but    ,
the act may be shown to have been in reality a donation,    #
   "
   +
or some other act or contract. (n)
    *
   &
Art. 1472. The price of securities, grain, liquids, and    %
other things shall also be considered certain, when the    )
   %
   (
price fixed is that which the thing sold would have on a    '
definite day, or in a particular exchange or market, or    %
   &
when an amount is fixed above or below the price on    "
such day, or in such exchange or market, provided said    %
   $
amount be certain.    #
   "
-.
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Art. 1473. The fixing of the price can never be left to the
discretion of one of the contracting parties. However, if
the price fixed by one of the parties is accepted by the
other, the sale is perfected.
Art. 1474. Where the price cannot be determined in
accordance with the preceding articles, or in any other
manner, the contract is inefficacious. However, if the
thing or any part thereof has been delivered to and
appropriated by the buyer he must pay a reasonable
price therefor. What is a reasonable price is a question
of fact dependent on the circumstances of each
particular case.
Art. 1308. The contract must bind both contracting
parties; its validity or compliance cannot be left to the
will of one of them.
Republic Act No. 529 June 16, 1950  intensive information campaign on the effect of this Act.
AN ACT TO ASSURE UNIFORM VALUE TO PHILIPPINE
COIN AND CURRENCY 
Be it enacted by the Senate and House of Representatives
of the Philippines in Congress assembled: :
WHEREAS, the value of Philippine coin and currency affects
public interest and is subject to regulation by the Congress of
the Philippines; and
WHEREAS, it has been disclosed that the provisions of
certain obligations contracted in the Philippines purport to
give the obligee the right to require payment in gold or in a
particular kind of coin or currency or in an amount in money
of the Philippines measured thereby, thus obstructing the
power of the Congress to regulate the value of the money of
the Philippines and contravening the policy of the Congress,
here declared, to maintain at all times the equal and stable
power of every peso coined or issued by the Philippines, in
the markets and in the payment of debts; Now, therefore.
Section 1.  Every provision contained in, or made with
respect to, any obligation which provision purports to give
the obligee the right to require payment in gold or in a
particular kind of coin or currency other than Philippine
currency or in an amount of money of the Philippines
measured thereby, be as it is hereby declared against public
policy, and null, void and of no effect, and no such provision
shall be contained in, or made with respect to, any obligation
hereafter incurred. Every obligation heretofore or hereafter
incurred, whether or not any such provision as to payment is
contained therein or made with respect thereto, shall be
discharged upon payment in any coin or currency which at
the time of payment is legal tender for public and private
debts: Provided, That, if the obligation was incurred prior to
the enactment of this Act and required payment in a
particular kind of coin or currency other than Philippine
currency, it shall be discharged in Philippine currency
measured at the prevailing rates of exchange at the time the
obligation was incurred, except in case of a loan made in a
foreign currency stipulated to be payable in the same
currency in which case the rate of exchange prevailing at the
time of the stipulated date of payment shall prevail. All coin
and currency, including Central Bank notes, heretofore or
hereafter issued and declared by the Government of the
Philippines shall be legal tender for all debts, public and
private.
REPUBLIC ACT NO. 8183 Approved: June 11, 1996     %
AN  ACT REPEALING REPUBLIC ACT NUMBERED FIVE
HUNDRED TWENTY-NINE AS AMENDED, ENTITLED"AN
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Sales Notes (Uribe)
ACT TO ASSURE THE UNIFORM VALUE OF PHILIPPINE
COIN AND CURRENCY."  
Section 1. All monetary obligations shall be settled in the
Philippine currency which is legal tender in the Philippines.
However, the parties may agree that the obligation or
transaction shall be settled in any other currency at the time
of payment.
Sec. 2. Republic Act Numbered Five Hundred Twenty-Nine
(R.A. No. 529), as amended entitled "An Act to Assume the
Uniform Value of Philippine Coin and Currency,"   is hereby
repealed.
Sec. 3. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in two (2) national
newspapers of general circulation. The Bangko Sentral ng
Pilipinas and the Department of Finance shall conduct an
Q: Contract of sale entered into by A and B. The price
agreed upon was 1M yen. May that be a valid
sale? Can the seller compel the buyer to pay in
yen?
A: YES. By definition of a contract of sale, it is only
required that the price be in money or its
equivalent. Hence, it may be checks, promissory
note, bill of exchange. letter of credit.
Q: Promissory note has to be negotiable?
A: NO, only in money or its equivalent. Kaya yung
letter of credit kahit hindi negotiable, pwede.
As to whether the seller can compel the buyer to
pay in yen, YES. Because that is the agreement.
And RA 8183 allows payment not in Philippine
currency.
Q: Can the buyer compel the seller to accept 1M
coin? NO. Because today legal tender of P1 or
below is up to P100 only. Yung PD 72, wala nay
un nung 2006 pa.
Q: In the Deed of Sale nothing was mentioned about
the price, valid?
A: YES. Article 1354- although the cause is not
stated in the contract, it is presumed to exist and is
lawful, unless the debtor proves the contrary. In
fact, verbal sale may be valid.
Q: Price in shares of stock, valid?
A: NO. There are different classes of shares –
Doctrine of Common Knowledge. Also, shares of
stock differ from day to day and time to time    #
(1472).    ,
Art. 1472. The price of securities, grain, liquids,    #
   "
   +
and other things shall also be considered certain,
    *
when the price fixed is that which the thing    &
sold would have on a definite day, or in a particular    %
exchange or market, or when an amount is fixed    )
   %
   (
above or below the price on such day, or in    '
such exchange or market, provided said amount be    %
   &
certain.    "
   $
Q: Sale of a car in which the price will be equivalent    #
to tuition fee of a student for two years, valid?
   "
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A: NO Price is not certain.
Q: Sale of a car valued at 300T, for P1. Valid?
A: YES. Gross inadequacy does not affect the sale.
Article 1470.
If the price is simulated, it is void. But the act may
be shown to be a donation or some other act.
(Article 1471)
Price left to the discretion of one party – cannot
be, but perfected when accepted by the other.
(Article 1473)
Price left to third person—valid. Void if such third
person is unable or unwilling to fix it. (Article 1469)
Acceptance which contains request for changes in offer
but does not essentially change terms of offer does not
constitute a counter-offer. (Villonco Realty Co. vs.
Borromeo, Inc.)
The right to rescind contracts is not absolute and is
subject to scrutiny and review by the proper court;
Rescission of reciprocal contracts may be extrajudicially
rescinded unless successfully impugned in court;
Rescission creates the obligation to return the things
which were the object of the contrat with their fruits and
interests. (Goldenrod, Inc. vs. CA)
The manner of payment of the purchase price is an
essential element before a valid and binding contract of
sale can exist; The absence of any formal deed of
conveyance is a strong indication that the parties did
not intend immediate transfer of ownership. (Cruz vs.
Fernando)
Consideration of P1.00 in deed of conveyance is not
unusual; Bad faith and inadequacy of monetary
consideration do not render a conveyance inexistent.
(Morales Dev’t. Co. vs. CA)
While in ordinary sales for reasons of equity a
transaction may be invalidated on the ground of
inadequacy of price, or when such inadequacy shocks
one’s conscience as to justify the courts to interfere,
such does not follow when the law gives to the owner
the right to redeem, as when a sale is made at public
auction, upon the theory that the lesser the easier it is
for the owner to effect the redemption. And so it was
aptly said that when there is the right to redeem,
inadequacy of price should not be material, because the
 judgment debtor may reacquire t he property or also sell
his right to redeem and thus recover the loss he claims
to have suffered by reason of the price obtained at the
auction sale. (De Leon vs. Salvador)
B. Natural Elements
1. warranties
2. subrogation
C. Accidental Elements
III. Perfection of the Contract
A. When perfected – Arts. 1475-1476,
1479(1)
B. Contract of Option/ Option Clause/Deed
of Option – Arts. 1479, 1324
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Sales Notes (Uribe)
Art. 1475. The contract of sale is perfected at
the moment there is a meeting of minds upon the
thing which is the object of the contract
and upon the price.
From that moment, the parties may
reciprocally demand performance, subject to the
provisions of the law governing the form of
contracts.
Art. 1476. In the case of a sale by auction: 
(1) Where goods are put up for sale by auction
in lots, each lot is the subject of a separate
contract of sale. 
(2) A sale by auction is perfected when the
auctioneer announces its perfection by the fall
of the hammer, or in other customary manner.
Until such announcement is made, any bidder
may retract his bid; and the auctioneer may
withdraw the goods from the sale unless the
auction has been announced to be without
reserve. 
(3) A right to bid may be rese rved expressly by
or on behalf of the seller, unless otherwise
provided by law or by stipulation. 
(4) Where notice has not been given that a sale
by auction is subject to a right to bid on behalf
of the seller, it shall not be lawful for the seller
to bid himself or to employ or induce any
person to bid at such sale on his behalf or for
the auctioneer, to employ or induce any
person to bid at such sale on behalf of the
seller or knowingly to take any bid from the
seller or any person employed by him. Any
sale contravening this rule may be treated as
fraudulent by the buyer.
Art. 1479. A promise to buy and sell a
determinate thing for a price certain is
reciprocally demandable.
An accepted unilateral promise to buy or to
sell a determinate thing for a price certain is
binding upon the promissor if the promise is
supported by a consideration distinct from the
price.
Art. 1324. When the offerer has allowed the
offeree a certain period to accept, the offer
may be withdrawn at any time before
acceptance by communicating such
withdrawal, except when the option is founded
upon a consideration, as something paid or
promised.    #
   ,
   #
   "
   +
Consideration not presumed in an accepted
    *
unilateral promise to buy or to sell; Promisee in an    &
accepted unilateral promise to sell must prove the    %
existence of consideration; Accepted promise    )
   %
   (
to sell is an offer to sell and when accepted    '
becomes a contract of sale. (Sanchez vs. Rigos)    %
   &
   "
The deed of option or the option clause in a    %
   $
contract in order to be valid and enforceable must    #
among other things indicate the definite price at
   "
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A: Yes. Sale of large cattle. Sale must be in
a public instrument, registered, and certificate of
title must be obtained for the sale to be valid.
A written note or memorandum, embodying the
essentials of the contract and signed by the party
charged, or his agent, suffices to make the verbal
agreement enforceable, taking it out of the operation of
the Statute of Frauds. (Paredes vs. Espino)
The Statute of Frauds is applicable only to executor
contracts, not to contracts either partially or totally
performed. (Inigo vs. Estate of Maloto)
The necessity of a public instrument provided for in
Article 1358 is only for convenience, not for validity or
enforceability. (Dalion vs. CA)
A sale of a piece of land appearing in a private deed
cannot be considered binding on third persons if it is not
embodied in a public instrument and recorded in the
Registry of Deeds. (Santos vs. Manalili)
IV. Rights and Obligations of the Vendor – Art.
1495
Art. 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.
A. To transfer ownership
Who can transfer ownership
General Rule – Arts. 1505-
1506, 1547
Cuison vs. Remoto – Where
the party has a prior existing interest which is
unregistered at the time he acquired interest has
the effect of registration as to him; No one can give what
he does not have.
Exceptions: Art. 1505
1. Estoppel
2. Sale by an apparent owner
3. Purchase at Merchant’s
Store, Market or Fair – Art. 559
When and How transfer is effected? –
Arts. 1477, 1459, 1496, 1547, 1588
General Rule:
Ilao-Quianay vs. Mapile -
Ownership of the thing sold is acquired only from the
delivery thereof,either actual or constructive.
Exceptions:  seller or grantor acquires title thereto, such title passes
1. Sale or return – Art. 1502
(1)
2. Sale on approval or trial –
Art. 1502 (2)
3. Conditional sales – Arts.
1478, 1503 (1), 1458 (2)
Art. 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. 
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Sales Notes (Uribe)
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.
Art. 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.
Art. 1547. In a contract of sale, unless a contrary
intention appears, there is: 
(1) An implied warranty on the part of the
seller that he has a right to sell the thing at the
time when the ownership is to pass, and that
the buyer shall from that time have and enjoy
the legal and peaceful possession of the thing; 
(2) An implied warranty that the thing shall be
free from any hidden faults or defects, or any
charge or encumbrance not declared or known
to the buyer. 
This Article shall not, however, be held to render liable a
sheriff, auctioneer, mortgagee, pledgee, or other person
professing to sell by virtue of authority in fact or law, for
the sale of a thing in which a third person has a legal or
equitable interest.
Art. 1431. Through estoppel an admission or
representation is rendered conclusive upon the person
making it, and cannot be denied or disproved as against
the person relying thereon. 
Art. 1433. Estoppel may be in pais  or by deed. 
Art. 1434. When a person who is not the owner of a
thing sells or alienates and delivers it, and later the
by operation of law to the buyer or grantee.
   #
Art. 559. The possession of movable property acquired    ,
in good faith is equivalent to a title. Nevertheless, one
who has lost any movable or has been unlawfully    #
   "
   +
deprived thereof may recover it from the person in     *
   &
possession of the same.    %
   )
If the possessor of a movable lost or which the owner    %
   (
   '
has been unlawfully deprived, has acquired it in good    %
faith at a public sale, the owner cannot obtain its return    &
   "
without reimbursing the price paid therefor.    %
   $
   #
   "
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Art. 1477. The ownership of the thing sold shall be
transferred to the vendee upon the actual or
constructive de livery thereof.
Art. 1459. The thing must be licit and the vendor must
have a right to transfer the ownership thereof at the
time it is delivered.
Art. 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.
Art. 1588. If there is no stipulation as specified in the
first paragraph of article 1523, when the buyer's refusal
to accept the goods is without just cause, the title
thereto passes to him from the moment they are placed
at his disposal.
Art. 1523. Where, in pursuance of a contract of sale, the
seller
buyer,isdelivery
authorized orgoods
of the required
to atocarrier,
send the goodsnamed
whether to the
by the buyer or not, for the purpose of transmission to
the buyer is deemed to be a delivery of the goods to the
buyer, except in the case provided for in Article 1503,
first, second and third paragraphs, or unless a contrary
intent appears.  buyer of his obligations under the contract.
Unless otherwise authorized by the buyer, the seller
must make such contract with the carrier on behalf of
the buyer as may be reasonable, having regard to the
nature of the goods and the other circumstances of the
case. If the seller omit so to do, and the goods are lost
or 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.  buyer.
Unless otherwise agreed, where goods are sent by the
seller to the buyer under circumstances in which the
seller knows or ought to know that it is usual to insure,
the seller must give such notice to the buyer as may
enable him to insure them during their transit, and, if the
seller fails to do so, the goods shall be deemed to be at
his risk during such transit.
Art. 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 of 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.
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
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Sales Notes (Uribe)
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.
Art. 1478. The parties may stipulate that ownership in
the thing shall not pass to the purchaser until he has
fully paid the price.
Art. 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
 
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
 
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.    '
   %
   "
Q: The seller may have how many obligations?    %
   $
A: It depends upon the stipulation of the parties.    #
   "
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Ex. It may be stipulated in the COS that it will be A seller may not have a right to sell if he is a thief.
the seller who will have the obligation to cause the
transfer of registration. Q: If the seller has no right to sell, what is the effect
on the buyer?
Q: Why would the person in possession of the thing A: The buyer will acquire no right because the seller
buy the thing? has no right to sell. Article 1505
A: To improve his title.
Ex. Lessee/depositary/ Borrower/bailee Q: If the seller has no right to sell, is it possible for the
buyer to acquire ownership in the thing?
Q: May the seller be held liable for deterioration even A: YES. If the owner is in estoppel. Article 1505
if he has exercised the diligence of a good father of a Sale by an apparent owner.
family? Purchase at merchant’s store
A: Yes. The parties may agree on different degree of
diligence. ESTOPPEL
1.  In pais – equitable (Rule 131, Sec. 2a)
Q: “A” sold a mango plantation to B but they 2.  By deed – technical
stipulated that delivery will be made after the signing of By deed – party may stipulate in the DOS
the DOS. After the expiration of the 6month period, B that the seller is the owner of thing being sold
demanded for the delivery. The vendor (A) was when in fact he is not the true owner.
able to deliver one month after the date when was
supposed to deliver the mango plantation. During this period, In estoppel, ownership passes to the buyer
A harvested mango fruits and sold them to X. A even if at the time of the sale the seller does
was able to deliver only after other fruits were harvested not have the right to sell.
and sold to Y.
Q: A lost his ring in a hold-up. It was found in a
Can B recover the mango fruits from Y during the pawnshop. Can the robber redeem the ring?
6month period? A: NO.
A: NO. Article 1537 should be interpreted to mean
that the obligations of the parties already Q: A noticed the ring from B and Asked for the return
due and demandable during the perfection of the contract if of the ring. Can B be compelled to return the ring to
there was no agreement as to when the obligation A?
was to be performed without prejudice to the
provision of Article 1164 if there was stipulation as to the A: YES. The owner can recover the ring as long as
period of delivery, in which case the buyer will only he reimburses B for the amount if B acquired the
be entitled from the time the obligation to deliver it arises. ring in good faith (Article 559) – because the owner of the
thing was unlawfully deprived of the thing.
No inconsistency between Article 1537 and 1164.
Q: A painting was stolen from R. Three years
Q: Can B recover from Y the fruits sold to Y? thereafter, she noticed the painting on the wall of M. It was
A: YES. During the one month period B is already the painting stole from R. R asked M how he acquired the
entitled to the fruits but he may not recover painting and he said that it was by gallery auction.
because e may not have real rights until the fruits are Can M be compelled to return the painting to R?
delivered. Article 1164 A: YES. R can demand the return of the painting.
Only those who would buy from a public sale in good
Q: May a person sell something which does not faith that are protected in the sense that the can retain the
belong to him? thing bought until they are reimbursed. If they did
A: YES. Because the law does not require oqnership. not buy the thing from public sale, they are not protected by
As long as the essential requisites are present. Ex. law, therefore they are compelled to deliver without
Agency reimbursement because it was not acquired in a public
auction
Seller may be able to transfer ownership as long
as he has the right to sell. Article 1547 Gallery auction is not a public sale. It is by
invitation. Si Uribe daw naimbitahan na minsan sa
Q: If the seller has no authority from the owner, may Makati sa isang Gallery auction. Sosyal!
he have the authority to sell?    #
A: YES. a) owner-agent Merchant’s store is a public sale.    ,
b) judicial-sheriff    #
   "
   +
c) law- By way of exception, the buyer may acquire
    *
executors/administrators/guardians/notary public ownership because the buyer acquire no better title than    &
what the seller had.    %
Q: When should the seller have the right to sell in Merchant store has no right to sell.    )
   %
   (
order for the buyer to acquire ownership?    '
A: Generally, Art. 1459-right to transfer ownership at If A bought the item from a merchant store but the    %
   &
the time the thing is delivered. owner was not unlawfully deprived of the thing nor was    "
Specifically, Art. 1547-at the time when ownership the thing lost, the buyer becomes the absolute owner of    %
   $
is to pass. the thing.    #
   "

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If the buyer is in good faith, no knowledge of
defect in the seller’s title, he would acquire absolute
ownership.
Forged title can be a root of a valid title. But a
forger acquires no title.
Even if the real owner is willing to reimburse the
purchase price, the buyer is not obliged to return the
thing.
Sale by an apparent owner  (registered owner) will
only result in acquisition by the buyer if there is a law
(Property Registration Decree) enabling such person to
deposit the thing as if he is a true owner. To be valid,
purchaser must acquire from an apparent owner in good
faith and for value.
Q: A, the owner of a parcel of land, entrusted to his
clerk the TCT of the parcel of land for safekeeping. This
clerk instead forged the signature in the DOS with him
as the buyer. Thereafter, he was able to have the
property registered in his name. Then he sold the land
to a third person.
Did the clerk acquire title over the land? Can the
owner of the land have the property registered in his
name?
A: If the buyer is in good faith, the owner cannot
recover. This means that the buyer had no knowledge
of the defect of the seller’s title at the time of signing the
DOS (Buyer is in good faith and for value)
Q: May there be transfer of ownership without
delivery?
A: YES. Delivery must not always be actual.
Q: If there is actual delivery, ownership passes upon
such actual delivery?
A: Not necessarily. There are instances where the
sale has no transfer of ownership notwithstanding actual
delivery – sale on trial/sale on satisfaction/contract to sell
Q: Sale on installment is a conditional sale?
A: Not necessarily. Only if ownership is retained
For the presumption in Article 1602 of the New Civil Code to
arise, two requirements must concur: (a) that the parties
entered into a contract denominated as a contract of sale;
and (b) that their intention was to secure
an existing debt by way of a mortgage. The existence of any
of the circumstances defined in Article 1602 of the New Civil
Code, not the concurrence nor an overwhelming number of
such circumstances is sufficient for a contract of sale to be
presumed an equitable mortgage. (Salonga vs. Concepcion)
When in doubt, courts are generally inclined to construe a
transaction purporting to be a sale as an equitable mortgage,
which involves a lesser transmission of rights and interests
over the property in controversy. (Id.)
The notarization of the document does not guarantee its
validity because it is not the function of the notary public to
validate an instrument that was never intended by the parties
to have any binding legal effect on him. Neither is the
notarization of a document conclusive of the nature of the
transaction conferred by the said document, nor is it
conclusive of the true agreement of the parties thereto.(Id.)
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Sales Notes (Uribe)
The defense of having purchased the property in good faith
may be availed of only where registered land is involved and
the buyer had relied in good faith on the clean title of the
registered owner. (Id.)
The law on double sales as provided in Art. 1544 of the Civil
Code contemplates a situation where a single vendor sold
one and the same immovable property to two or more
buyers. For the rule to apply, it is necessary that the
conveyance must have been made by a party who has an
existing right in the thing and the power to dispose it. The
rule cannot be invoked where the two different contracts of
sale are made by two different persons, one of them not
being the owner of the property sold. (Sigaya vs. Mayuga)
A piece of land cannot plausibly be covered at the same
time, under the same concept of ownership, by two (2)
outstanding certificates of title, each having the same
validity, force and effect. (Premiere Dev’t Bank vs. CA)
The payment by a person of land taxes does not also
necessary detract from the spurious nature of his title. After
all, any one can pay real estate taxes on a given property
without being quizzed by the local treasury whether or not
the payor owns the real property in question.(Id.)
Where the certificate of title is in the name of the seller or
mortgagor, the innocent purchaser or mortgagee for value
has the right to rely on what appears on the certificate
without inquiring further in the absence of anything to excite
or arouse suspicion, or except when the party concerned
had actual knowledge of facts or circumstances that should
impel a reasonably cautious person to make such further
inquiry. (Id.)
A purchaser of a property cannot be in good faith where the
title thereof shows that it was reconstituted. (Id.)
Properly, then, the transaction entered into by Cruz and
Vallarta was not a "sale on return." Rather, it was a "sale on
approval " (also called " sale on acceptance, " "sale on trial."
or "sale on satisfaction" [CIVIL CODE, Art. 1502]). In a "sale
or return," the ownership passes to the buyer on delivery
(CIVIL CODE, art. 1502). (The subsequent return of the
goods reverts ownership in the seller [CIVIL CODE, art.
1502]). Delivery, or tradition. as a mode of acquiring
ownership must be in consequence  of a contract (CIVIL
CODE, art. 712), e.g. sale. (Vallarta vs. CA)
If there was no meeting of the minds on November 20, 1968,
then, as of that date, there was yet no contract of sale which
could be the basis of delivery or tradition. Thus, the delivery
made on November 20, 1968 was not a delivery for
purposes of transferring ownership — the prestation    #
incumbent on the vendor. If ownership over the jewelry was    ,
not transmitted on that date, then it could have been    #
   "
   +
transmitted only in December 1968, the date when the check
    *
was issued. In which case, it was a "sale on approval" since    &
ownership passed to the buyer. Vallarta, only when she    %
signified her approval or acceptance to the seller, Cruz, and    )
   %
   (
the price was agreed upon. (Id.)    '
   %
   &
   "
Risk of Loss or Deterioration    %
   $
(Total/Partial – Arts. 1504, 1480, 1493-1494, 1538 (1189),    #
1163, 1174
   "
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General Rule: Res
perit domino
Exceptions:
1. Stipulation
2. Security title
3. Delay
Double Sales – Art. 1544
Rule (Movables/Immovables)
When not applicable?
1. Unregistered lands
Art. 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:  to give, the following rules shall be observed in case of
(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;  debtor, he shall be obliged to pay damages; it
(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.
Art. 1480. Any injury to or benefit from the thing sold,
after the contract has been perfected, from the moment
of the perfection of the contract to the time of delivery,
shall be governed by Articles 1163 to 1165, and 1262. 
This rule shall apply to the sale of fungible things, made
independently and for a single price, or without
consideration of their weight, number, or measure. 
Should fungible things be sold for a price fixed
according to weight, number, or measure, the risk shall
not be imputed to the vendee until they have been
weighed, counted, or measured and delivered, unless
the latter has incurred in delay.
Art. 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.  Art. 1163. Every person obliged to give something is
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)  Art. 1174. Except in cases expressly specified by the
Art. 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
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Sales Notes (Uribe)
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.
Art. 1538. In case of loss, deterioration or improvement
of the thing before its delivery, the rules in Article 1189
shall be observed, the vendor being considered the
debtor.
Art. 1189. When the conditions have been imposed with
the intention of suspending the e fficacy of an obligation
the improvement, loss or deterioration of the thing
during the pendency of the condition: 
(1) If the thing is lost without the fault of the
debtor, the obligation shall be extinguished; 
(2) If the thing is lost through the fault of the
is understood that 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; 
(3) When the thing deteriorates without the
fault of the debtor, the impairment is to be
borne by the creditor; 
(4) If it deteriorates through the fault of the
debtor, the creditor may choose between the
rescission of the obligation and its fulfillment,
with indemnity for damages in either case; 
(5) If the thing is improved by its nature, or by
time, the improvement shall inure to the
benefit of the creditor; 
(6) If it is improved at the expense of the
debtor, he shall have no other right than that
granted to the usufructuary.
   #
also obliged to take care of it with the proper diligence    ,
of a good father of a family, unless the law or the    #
   "
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stipulation of the parties requires another standard of     *
care.    &
   %
   )
   %
   (
law, or when it is otherwise declared by stipulation, or    '
when the nature of the obligation requires the    %
   &
assumption of risk, no person shall be responsible for    "
those events which could not be foreseen, or which,    %
   $
though foreseen, were inevitable.    #
   "
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In a contract of sale where the seller agreed that the A: Yes, if by the buyer’s fault, he delays in obtaining
ownership of the books shall remain with it until the purchase the goods. (Art. 1504 [2])
price shall have been fully paid, it is held that such stipulation
cannot make the seller liable in case of loss not only Q: Ownership has already passed to the buyer but
because such was agreed merely to secure the performance the goods were still with the seller. When would the seller
by the buyer of his obligation but in the very contract it was bear the loss?
expressly agreed that the "loss or damage to the books after A: If through the seller’s fault, he delays in delivering
delivery to the buyer shall be borne by the buyer." (Lawyers the goods.
Cooperative vs. Tabora)
Q: A sold a parcel of land to B who did not register
The rule that an obligor should be held exempt from liability the sale. Thereafter, A sold the very same land to C
when the loss occurs thru a fortuitous event only holds true who registered and obtained a new TCT in his name. Who
when the obligation consists in the delivery of a determinate would have a better right?
thing and there is no stipulation holding him liable even in A: C, if he registered the sale in good faith. If not, the
case of fortuitous event. (Id.) first buyer will have a better right.

Registration means only entry made in the books of the Q: Bar exam question.
Registry which records solemnly and permanently the right 1. The first buyer registered the sale with
of ownership and other real rights. knowledge of the second sale.
2. The second buyer registered the sale with
A purchaser who has knowledge of facts which should put knowledge of the prior sale.
him upon inquiry and investigation as to possible defects of
the title of the vendor and fails to make such inquiry and Who will have a better right?
investigation, cannot claim that he is a purchaser in good A: 1. The first buyer until registration.
faith and has acquired a valid title thereto. (Paylago vs. 2. Not in good faith because he has already
Bernabe) knowledge of the prior sale.
Article 1544 does not apply to unregistered lands. (Carumba
vs. CA) Q: How could a first buyer be in bad faith, eh first
buyer na nga sya?
The  “better right" that cannot be prejudiced by the A: If he knows a defect in the seller’s title.
registration of a second sale of a parcel of land, referred to in The law requires registration in good faith.  A
Act No. 3344, is much more than the mere prior deed of sale person may not have knowledge at the time of
in favor of the first vendee. In the Lichauco case just perfection of sale but he has knowledge after the sale up to
mentioned, it was the prescriptive right that had supervened. the time of registration. In that case, he will not be a
Or, as also suggested in that case, other facts and registrant in good faith. Normal yung ngayon ang
circumstances exist which, in addition to his deed of sale, the bentahan, bukas o makalawa o sa susunod na buwan pa
first vendee can be said to have better right than the second ang registration.
purchaser. (Hanopol vs. Pilapil)
Q: A sold a parcel of land to B. After the sale, they
entered into a contract of lease. Who would be the
Q: After delivery who will bear the loss? lessor?
A: General Rule- Owner(buyer) res perit domino A: The lessor now is the buyer (new owner) – B.
Article 1504
Q: A sold again the parcel of land to C who took
It is important to determine the nature of the thing, possession of the land without knowledge of the
whether generic or specific. Then consider the cause of prior sale. Who will have a better right?
the loss. Then consider whether the loss occurred before, at A: B. Possession need not be actual. B is already in
the time or after the perfection of the contract. legal possession having leased the property to A.
This a case of constitutum possessorium.
Q: When there was actual delivery, may the seller
bear the loss under the res perit domino rule? Q: A sold a parcel of land to B who took physical
A: YES. When the seller reserves ownership. Article possession immediately. A delivered the land to B.
1504 Thereafter, A sold the land to C who registered the sale
without knowledge of the prior sale. Who has a
Q: There was actual delivery, however, ownership is better right?    #
A: C    ,
still
A:with the
Byseller, maystipulation
express the buyerof bear
the the loss?buyer will
parties,    #
   "
   +
Q: Is it possible for B to have a better right?
bear the loss even when the ownership was still with the     *
seller. A: YES, if the land is unregistered under the Torrens    &
•   If the reason why the seller system.    %
   )
retained ownership is to secure the    %
   (
fulfilment of the obligation of the buyer, it Q: How could C registered the sale if the first sale is    '
unregistered?    %
will be the buyer who will bear the loss.    &
A: Because there can be a registration of sale    "
Q: The seller was still the owner of the goods at the involving unregistered land.    %
   $
   #
time of the loss due to fortuitous event, may the    "
buyer bear the loss?

.-
 

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Article 1544 can be invoked only if the land is

registered. In 1544, the question is not the validity of the two
sales. Because they are both valid, ownership having been
transferred. The only question is who has a better right.

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   &
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   )
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   (
   '
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   &
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