FAR EASTERN UNIVERSITY

Institute of Accounts Business and Finance

LAW ON SALES

ACTIVITY ON MODULE 6

Instructions:

1. S sold to B a tractor payable at P50,000 upon delivery and the balance of P70,000 within 60
days. B failed to take the delivery of the tractor and pay the purchase price. S was forced to
sell the same to a third (3rd) person for only P100,000.
Is B liable to S for the difference of P20,000? Why?

- Yes, the seller is entitled to resell the goods if the buyer fails to accept delivery and
pay the purchasing price under a sales contract which is executory with both parties.
If he is obliged to sell for less than the contract price, he holds the buyer for the
difference; if he sells for as much or more than the contract price, the breach of
contract by the original buyer is damnum absque injuria. There is no need of an action
for rescission to authorize the vendor, who is still in possession, to dispose of the
property where the buyer fails to pay the price and take delivery. According to Article
1533 paragraph 3 It is not essential to the validity of resale that notice of an intention
to resell the goods be given by the seller to the original buyer.

2. S purchased a lot. When he tried to transfer the lot into his name, it was discovered that the
owner sold it to T (another person). T, the new buyer, was able to register it first in his name.
Who has a better right over the lot?

- The owner has the first privilege to the lot, and after him, only T can have the right
because the owner sold it to T first, and as a result, T was the first to record it in his
name. The owner's title has been changed to T, and the title applies to confirmation of
ownership and varies from possession. In accordance with article 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.

3. Bong bought a land from Jun five (5) years ago. Bong admits that there is an annotated
adverse claim of a certain Lino that he bought the land from the owner. However, the said
annotation was already canceled. Lino is claiming that he owned the land since this was first
sold to him. He further stated that he could recover the property since Bong had knowledge
that it was sold to him through the annotation of adverse claim.
Is Lino correct? Why or why not?
- No, the ownership of the land goes to the first owner who bought the property in good
faith if the same thing is sold to two parties and the thing is an immovable property.
And after the first owner, if property transfer to another person with full
documentation and in good faith then the ownership will get transferred. It appears
that Lino’s claim that was annotated on bong has already been cancelled. So, the
ownership lies with bong only and as what is stated in Article 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.