y sREL CHAPTER D- CAPAC gry TO ROY OR SEL CHAPTER 2 paciry TO BUY OF ee cal in Code to obliga, ha are rons y Art, 1489, AIL persons Oe contract red to a minor ,, see five contained In the followin taba aa sod and sate cred toa minor » ‘Where neressa't” . cs ae Miele 29 in peaan wih ose Feterreg a therefor. jes can bind themselve, are whether natural oF juridical who a" ani ego to enter intoa contract of Sale Persons who are incapacitated. Kinds of incapacity os i 1. Absolute tee persons who cannot enter into a cour of sale in These stances; otherwise, the contract of sale is del fective, either circum: . ; yoidable or unenforceable. Minors, insane, demented persons, and deaf-mutes who do not know how to write. y 2. Relative incapacity These are certain persons, under certain circumstances, cannot buy certain property.* Examples: a. Husband and wife; », The guardian, the property of the person or is eee! of the per persons who may be under his Ee eel fetid a prey whose administration or sale may have been i nen se ee consent of the principal has been given; adminstratieny ‘ators, the property of the estate unde € Publi lc officers and employees, the property of the State or of an subdivision " vernment-owned or controle bdivisto ; thereof Y of any government-owni led to them; : si of which has been in la + Wolfson va, Estate of Martinez, GR, No, 1-5970, October 30, 1911, in th authori _ saving the modificatio,, aapacity TO BUY OR ELL in Modifica oa onaia gs ; themseig nnot by under bs en; of a role rust cuaet FRM ¢ of superior and infertor ess CTS OF ected with | the sin ttigation or levied risdictian or territory vs, prosecuting attort sp pusices lees oer gees ond_ employees cours arf sie he property aan execution befare tne court wil ose fi ter exeretse their respective functions: what ries? 1 ae ere everything indispensable (or sustenance, dwelling aothing, medica attendance, education ‘and transportation. each other, wife cannot sell property to art. 1490. ‘The husband. and the ft ©7f1) When a separation of property was agreed upon in the marriage settlements; OF (2) When there has been a judicial separation of prope! Article 191. ty under not sell property to each other. General rule: band and the wife cam in the marriage The hus! Exception: xynen a separation of property was agreed upon i settlements; and 2, When there has been a judicial separation of property. Note: ‘he proscription against sale of property between spouses applies even to common law relationships. Problem: ‘On December 30, 1947, H and W were were born respondents A, B, C, D, and E. ‘A.B, C, D, and E claim that in 1961, their parents acquired a 661 square meter property but that as they were Chinese citizens at the time, the property was registered in the name of their aunt, S. (On May 1, 1993, $ executed a deed of sale over the property in bad af A B ¢ D, and E’s father, H. In turn, H executed on October 12, a deed of sale over the property in favor of his common-law-wife-, ¥. TCT No. 1234 was, thus, issued in Y's name. “ After H's death on March 11, 1996, A, B,C, D, and E dis » » A, B,C, D, ‘covered that ownership of the property had already been transferred in the name a A, B, C, D, and E thereupon had the purported signature of their er in the deed of sale verified by the Philippine National Police Crime Laboratory which found the same to be a forgery. A,B,C, D, and E, thus, filed a complaint for recovery of property. married, Out of the union FAmtide 194, Family Code of the Philippines, 63ry oR SI CHAPTER cavaceTy FO nu swipe ca Anawer nusband and. CLE 1490. whe anti ay wet agreed UI abner: exert sparason of POP pon in the Marriag, under Article 19), UE) When a sof oraerty dements; OF cial separation petween Spouse, ‘Bp men ener has een asd ersaie of PTOPERY Os Court rules ription aga nships- applies pater common, 1 eset 2k esate was null and voi tn Catimlirn-Canullas ¥- Head thatthe contract vs (eeate was made by , Anentthe second issu ete public he sate med his fami, d children lived ang for being contrary. after he ae 3 ae Thome where BIS Woo cate was subversive oj and left the conJUgt eir SUPP which pub) from whence they see trie social institution Public i 2 the stability of # cts. that: contracts whose pes and protes inter alia poy ed 1409 of the aul Laie fac morals, good customs, public c ae eginning. cause, bjt oF PUSS TTT ineustent fom the YOO) ETT ae onder, or public policy vovides that: "contracts withe 2 oF Article 1352 also P The cause is unlawful if no effect whatsoever. : law) és contrat yy Sy law emphatically prohibits the spouses from ae to each other suber > peu tions. Similarly, donations between spouses during iage sre prokibited. And this is so because if transfers or conveyances fereen spouses were allowed during marriage, that would destroy the ji i ic policy in civil law. It was also em of conjugal partnership, a basic pol Seagned to prevent the exercise of undue influence by one spouse over the other, as well as to protect the institution of marriage, which is the cornerstone of family law. "Those provisions are dictated by public interest and their criterion must be imposed upon the will of the parties. ‘As the conveyance in question was made by H in favor of his common- law-wife-herein Y, it was null and void.3 Note: Although under Art. 1490, the husband and wife a cannot sell property ¢0-one another as a rule which, for policy consideration and the aeates of morality require that the prohibition apply to common-law relationships. one ,, : see Marta B. Ching vs. Joseph C.Gayanko, tr, GR.No, 165879, November 10/2006, - eannot sell BEMBRUS LD emg 2sWhey, Pubj, sey ul if, Use Nees CHAPTER un %) was the owner af 4 I6ty tugether_ with the improvement eherenn; in 1977 she and reapondent R lived together 0 bus a ie tafe without the bonerit of marriaees in September 1982, solely she executed a deed of absol tary consideration: love and affection for R,s fot in favor of R without any mone! : ; d used the property a6 collate’ to protect her interest, she registered the document in his favor an for a bank loan of P350,000. Subsequently, ¢ executed an Affidavit of Adverse Claim which she filed with the one ser of Deeds sserting that her sale in favor of R was ull votd for lack o} Consideration and being contrary to law and public policy. ; ‘On February 22, mplaint against R for quieting 1990, she filed aco oftitie, declaration of nullity of documen's and damages. Denying 6's claim, he registered R claimed that he was already t having acquil G through a ‘owner of the property, jred the same from notarized deed ‘of absolute sale; the sale was for a valuable consideration and not tainted with fraud nor executed under duress; and, G was estopped from impugning the validity of the sale and questioning his title over the property. On May 22, 1990 the Register of Deeds filed a manifestation informing the trial court that the property had been sold by Rto M who was already the registered owner thereof. ‘On 24 September 1990, responding to the amended complaint, M answered that there was no privity of contract between him and G; M was a purchaser for value in good faith; the sale between him and R was ceecuted on 22 December 1989 or long before the execution of the Affidavit of Adverse Claim. G insists that she and R were common-law hus! sale between them was void and inexistent, citing Art. 1 Code. jer: band and wife, the 490 of the Civil Is the sale between G and R valid? - Although under Art. 1490, the husband and wife cannot sell Property a eee as a rule which, for policy consideration and the squire that the prohibition apply to common-law relationships, G can no longer seek reconveyance of the property to her as it has already been acquired by M in good faith and for value from her own transferee. At the time R executed the deed of absolute sale o: 1989 in favor of M, which was acknowledged a Seat R was the rested owner appesring in the certificate of title. When the sale was executed, nothing was annotated in the certificate to indicate ae claim ofa third person or the fact that the property was i x ject of a pending litigation, It was only on 22 January 1990, after the sale to M, that G filed her adverse claim with the Register of. Deeds Based 65.yon SELL _aracuty TO wuy o8 care was a purchases 5, ahere is 1° det oe property he hart a rok when Ke nt to or an adverse inter... ard faith a ger person ‘had for the property atthe time “ " ee ‘of G's claim or interest in y,, he had any nr gual and is perfected on,, he subject matter and 1}, u t dice, however, to az, ed etwes t preju 7 : "8 4 et ‘her erstwhile common-ta,, may t@ > se ty uire by purchase, even at, wing persons cannot acd” the mediation o, ction, either In person or r persons who ma: 1e guardian, the property of the person or pel Ts pea ay wh administration or sale may have bee, er reales the consent of the principal has bee, , e) ccocs and administrators, istration; (4) pubic officers and employees, the property of the State or of any ‘ subdivision thereof, or of any government-owned or controlled / corporation, or institution, the administration of which has been the property of the estate unde, intrusted to them; this provision shall apply to judges and yew government experts who, in any manner whatsoever, take partin om the sale; (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which Part by virtue of their profession. = eee | (6) Any others specially disqualified by law. (1459a) Note: In contract of ageng mat ts not prohibiced to i eid the termination of the relationship 'ase @ property belonging to the former ER. Na, t20) 122. Noversber 6, 1997PACreY TO BUY OR S! 1 Rare &® FF = ~ made at the instance of his clients EHAPTRR HL © om acquiring BY wore: Article 1491 (5) of the Cwvil Code prohibits kawgers [r° arehase ov assignment te Property rights involved which are the abjec cof Mich they incervene by virtue Of ‘their profession. ncy of the sult ‘and generally does effect onty after the difgation in WI iattion applies ens during the pende Pecover contracts for contingent [ees Pohere tie cransfer takes: Aratity of w favorable judgment. oe ee gee Yee contract is an agreement 10 writing where the fet often a fixed percentage of what may 7 areovered in the action, 1s mad’ 7a id upon the success of the litigation, The payment of the coneingent fee js not made during the pendency of the litigation involving the cltent’s tot only after the judgment has been rendered In the case properd handled by the lawyer iftcation imposed on public and, judicial officers and policy considerations which disallow the evnether directly or indirectly, in view of the peculiar control exercised by these The above disqual lawyers is grounded on public transactions entered into by them, tuciary relationship involved, or the sndividuals over the properties or rights covered.6 ‘Art. 1492. The prohibitions in the two preceding articles are applicable ‘compromises and renunciations. to sales in legal redemption, ‘The prohibition ordained in paragraph 5 of Article 1491 and Article ‘on public policy because, by virtue of his office, an attorney may easily take advantage of the credulity ‘and ignorance of his client and induly enrich himself at the expense of his client. The case ofin re: Ruste illustrates aforementioned prohibition. In that case, the attorney acquired his clients’ property subject of a case where he was acting as counsel pursuant to a deed Of sale executed by his clients in his favor. He contended that the sale was because they had no money to pay him for 5 acquisition of the property of e lawyer's btaining therein rendered him liable for 1492 is founded the significance of the his services. The Court ruled that the his clients under the circumstances o! malpractice. The Court held: Whether the deed of sale in question was executed at the instance of the spouses driven by financial necessity, as contended by the respondent, or at the ecter’s behest, as contended by the complainant, is of'no moment. In either case an attorney occupies a vantage position to press upon or dictate his terms toa harassed client, in breach of the “rule so amply protective of the confidential —— "The conjugal partnership ofthe spouses Vicente Cadavedo and Benita Arcoy-Cadavedo vs, Victorino T. Lacaya, GR No 173168, january 18,2014 ‘Mauro P. Mananquil vs, Atty. Crisostomo C. Villegas, A.M. No. 2430, August 30, 1990, 67me must necessarily extst between attorney and client, ang "fn, rotations, wht rights of both” Sane 715 Re; Suspension from he . 30,2004. Practice of law in the territory of Guam of Atty, Leon G: Maquera, BM. No. 793,10 68HEN THE THING 50, ov “at arteR? i gact . ; rut THe cS BEEN Lost i Zz ere sot THING 4, the thing wy, ™ poate Pee he contract chat rename ara : at, 1408 TIE tract NOE art only, the veng fa the obaeit of A jost In Po and demanding ,, tract ae to the total sum agre,, apn. mead perfection of the contract ho 4 “own vi ectof the contract has been entirely jog. tthe thing wht yi eany effect The reason is because there is an shall Oe ig, the object. eaten essential 2 PARTIALLY Lost if the thing should choase between: ” ‘a. Withdrawing from the contract; and b. Demanding the remaining part, paying its total sum agreed upon. have been Jost in part only, the vendee Tay price in proportion to the A thing is lost when it perishes or goes out of commerce or disappear; in such « may that its existence is unknown or it cannot be recovered. Art. 1494. Where the parties purport a sale of specific goods, and the seeds 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 monatiahy changed in character, the buyer may at his option treat the {2} As ava: or As aera in all ees rusting goods or in so much thereof as have zn eterna ere aus binding the buyer to pay the agreed price pots ownership will pass, if the sale was Note; This article rei They ont reiterates the : : ony ‘ifr in the obj of sae ies involved in the precedi icle Article spats of googys °° PreCedi is abe of goods Ng article speaks about © -CHAPTER I~ EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST Remedies: 4, Avoidance; or 2. Valid in all of the existing goods or in so much thereof as have not Hh deteriorated, and as binding the buyer to pay the agreed price for the N goods in which the ownership will pass, if the sale was divisible. ty * 73CHAPTER 4 OBLIGATIONS OF THE yENDOR SECTION 1. - General Provisions ind to transfer the ownership ofand deliver, bject of the sale. The vendor is bow h is the ol Art 1495. rrant the thing whic as well as wal obligations of the vendor 1, To transfer ownership of the 2 Todeliver the thing; 3, To warrant the object sold against ev! 4 Totake care of the object sold pending delivery: and 5. To pay for the expenses for the execution and registration oft ‘of sale unless there is a stipulation to the contrary. thing sold; iction and hidden defects; he contract ‘efers to the concurrent ip. This is the rationale delivery via execution ndee actually failed 27 In the same f the property, but by tained by the vendor DELIVERY nDelivery” as used in the Law on Sales transfer of two things: (1) possession and (2) owners! behind the jurisprudential doctrine that presumptive ofa public instruments negated by the reality that the ve to obtain material possession o in if the vendee is placed in actual possession agreement of the parties, ‘ownership of the same is ret aati the vendee has fully paid the price, the mere transfer of the possession of the property subject of the sale is not the "delivery" contemplated in the Law on Sales or as used in Article 1543 of the Civil Code.t purpose of delivery Under the Civil Code, ownership does not pass by mere stipulation put only by delivery. Manresa explains, “the delivery ofthe thing... signifies that title has passed from the seller to the buyer.” According to Tolentino, the purpose of delivery is not only for the enjoyment of the thing but also a mode of acquiring dominion and determines the transmission of ownership, the birth of the real right The delivery under any of the forms provided by Articles 1497 to 1505 of the Civil Code signifies that the transmission of ee from vendor to vendee has taken place.” ; us, ownership does not pass by mere stipulation but onl ele: Manresa explains, “the delivery of the thing xxx signifies: eee ae ‘passed from the seller ‘to the buyer." Moreover, according to Tolentino, parpore of delivery is not only for the enjoyment of the thing but also @ mode of acquiring dominion and determines the transmission of 3 Cebu Winland Development Corporat iow fon vs. Ong Stau Hua, G.R. No, 173215, May 21, /nland Development Corporation vs. Ong Siau Hua, GR. No. 173218, May’ 312008, 15GATIONS oF THE VENDOR HAPTER IV > OBE any of the for,,, ignifies that 1, aken place. Her, hich contemplay, oe thing sold is placed in th, phe delivery unde! om he birth of tne real right very oes provided by Articles 1497 te 1505 of the civil ast transmission OF ownership {ret Article 1497 0 emphasis is placed of qhar is known as real or getual activerys 4 control and possession of the vendee. 1 vendor t vende of the Civil Code, en th Watt deta Realty Development, Ine. y. Mayfair Theater, Inc, th, Oey hasbee elutdated 19 amps act,a thing in which boy, ‘es concur. It is an act by which, to and the posst f the property, and the the right to and the possession of the same. In its natura sense, delivery means some! to the delivery of property o, ‘on In the Law on Sales, delivery may be either actual or ‘constructive, but both forms of delivery contemplate "the T and custody of the property on the part of : absolute giving up of the contro a veador, and the assumption of the same By the vendee."> What is actual delivery? ‘Actual delivery of a thing sold occurs when it is placed under the control and possession of the vendee.* Art. 1496. The ownership of the thin; is , g sold is acquired by the from the moment sp is delivered to him in any of the ae Sreanel id Artick to |, or in any other manner signifyin; that the possession is transferred from the vendor Ee the peace omen General Rule: ; , Ownership of the thing sold is acquired only upon its delivery, actual or contructive, to the buyer. ca: . When the seller and the bi with the seller until t e buyer agree that the ownershi C Contacto sell; the full payment of the purchase orice: shall remain . ss a) approval, trial or satisfaction; plied reservation of ownership, 5 andler ends: ied met CHAPTER IV apts pays ip ; . ne Civil Gode st of the thing sold is transferee ste upon the actual OF constructive aotivery othe a the derstood as delivered when Wt 1s plac atte think gm ofthe ootidee, Payment of ee purchase pricetsnocessent Fre transfer of ownersiiP as Tong as the property 0 and such delivery {traditio) operated to divest the vendor property which may not be regained or recovered und a contract is resolved oF nescinded in accordance with law Problem: By Deed of Sale, brother R. R took initial steps to register tl the registration process. | , 1992, P died single and with ofownersh! {ial to transfer 0 NOT essen ne ates that ownership el of land to his red pares complete d but failed to out issue. She was p sold an unregiste! he lan ‘On November 26, survived by her siblings VQ and R. . ‘On November 22, 1995, V executed a public document entitled Sale" wherein he adjudicated d lot and sold it to Cc. “Extrajudicial Settlement by Sole Heir and eclaration No.002 in her own exclusively unto himself the questione Subsequently caused the issuance of Tax D name. 6, R, by Deed of Sale of even date, sold the w. hip of his land to R? "on February 5, 199 questioned lot to spouses H and Did P transfer the owners! ute Sale the parcel of land of hip thereof was transferred f the Civil Code reading: Answer: When P sold to R by Deed of Absol which the questioned lot formed part, owners} to the latter in accordance with Article 1496 o ART. 1496. The ownership of the thing sold is acquired by the vendee from the moment itis 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. In relation to Article 1498 of the Civil Code reading: ART, 1498. When the sale is made throu ic ii z : igh a public instrument, th ae thereof shall be equivalent to the delivery of the thing which is 1e object of the contract, if from the deed the contrary does not a| cannot clearly be inferred. amiad XXX The Deed of Absolute Sale in favor of R contains nothing contrary to an jntent to transfer ownership. *Spouses /Magdalino and Cleofe Badila vs Fe Bragat, GR. No, 187013, April 22, 2015. 7CHAPTER IV - OBLIGATIONS OF THE VENDOR she no longer owned 45, d not have inherited i, When P died on November 26, 1992, questioned lot and, therefore, her brather V coulTIONS OF THE VENDOR CHAPTER 1V - OBLIGA’ SRCTION 2.- Delivery of the Thing Sald old shall be understood as delivered, when it is Art. 1497. The thing » placed inthe ‘control and possession of the vendee. as real or actual tis real or actual delivery? is known ssion of the ‘Article 1497 above ‘contemplates what when the thing sold fs placed In the control and posse: ‘vender. Article 1498, on the one hand, refers to symboli execution of a public instrument, It should be noted, however, tl hat the execution ‘of the deed provides a conclusive If to providing that 1498 does not say # presumption of the delivery of possession. It confines {tsel the execution thereof is equivalent to delivery, which means that the mption therein can be rebutted by means of clear and convincing evidence. Thus, the presumptive delivery by the execution of a public instrument can be negated by the failure of the vendee to take actual possession of the land sold. Kinds of Delivery 4, Real or Actual ‘The thing sold is placed in the control and possession of the vendee. 2. Legal or Constructive Itis a delivery by operation of law. 3. Quasi-Tradition Delivery of rights, credits, or incorporeal property, made by: a. Execution of public instrument; e placing of titles of ownership in the hands of buyer; or ¢. Allowing buyer to make use of rights. Kinds of Legal or Constructive Delivery a, Legal Formalities ~ When the sale is made through a public instrument. delivery by execution of public instrument gives rise to which is destroyed when actual delivery is not affected due to legal impediment. The b. Symbolical Tradition or ‘Traditio simbolica The parties use a symbol to represent the thing delivered. Example: With regard to movable pi delivery of the keys of the place or roperty, its delivery may also be made by depository where it is stored or kept. ca 79yuk VENDOR omagations oF CHAPTER WV radi {the contrartin, agreement Ol ; i ee i x anere consent or ager ea of sale with The deliver ties, where Ne Soeaeed of actu: ly dotvert had. already th “ a. Traditio Brevi MAME aye would be BUTT eae by virtue o or This occurs WEY ihefore the cOmITaGE Oe TT Contract ot the pessesio of te SMe owners (Ke e ee sale, see onan fe ere He wa = } 7 : - s ‘ame house)- : former lessee of eof consttatum possessorium ‘Tred a col ¢. Traditio Constitutum roeemtne ‘owner's continuous possession or ery 0! 0 The delivery O° ready sold to another person but his 2resey pr ofthe property he had alt but under another capacity, as pa of ee that of a lessee. ce Ike that iis opposite of traditio brevi manu. is made through a public instrument, the execu i i f the thing which tion thereof shall be equivalent to the delivery o ts the object of the contract, if from the deed the contrary does not or cannot clearly be inferred, ; With regard to movable property, its delivery may also be made by the delivery of the keys of the place or depository: where it is stored or kept. The above-stated article speaks about the two kinds of constructive j delivery which are legal formalities and tradition simbolica. Art, 1498. When the sale What is a public instrument? A document prepared by a notary public in the presence of the Parties who sign it before witnesses.” NOTARY PUBLIC A person authorized by a State to admini b minister oaths, certit ee to the authenticity of signatures, and perform official a iercial matters, such as protesting negotiable instruments.8 In Philippine Suburban De * General, The Supreme Court helde ent orPoration y. The Auditor Seema Joe P1427, Bach's Law Dictionary, Tenth Edtion ‘'s00 9.1225, Blacks Law Dictionary, Tenth Edition, 80active f the rtify acts ditor CHAPTER IY ~ OBLIGATIONS OF THE VENDOR When the sale of real property is made in.a public instrument, the execution thervof is 7 i from the deed the contrary does not appear or cannot clearly be inferred. in other words, there Is gumbolic delivery of the property subject of the sale by the execution of the public instrument, unless from the express terms of the instrument, or by clear inference therefrom, this was not the intention of the parties. Such would be the case, for instance, x x x where the vendor has no control over the thing sold at the moment of the sale, and, therefore, its material delivery could not have been made. Stated differently, as a general rule, the execution of a public instrument amounts to a ¢ cti ivery of the thing subject of a contract of sale. However, exceptions exist, among which is when mere presumptive and not conclusive delivery is created in cases where the buyer fails to take material possession of the subject of sale. A person who does not have actual possession of the thing sold cannot transfer constructive possession by the execution and delivery of a public instrument. Problem: Vis the registered owner of a parcel of land who entered into an Agreement with M for the purchase and sale of said parcel of land. Ina letter, M informed V that he was backing out from the sale agreed upon because there are tenants who are not willing to vacate the land without giving them back the amount that they mortgaged the land. M demanded refund of his P185,000 down payment; however, it was unheeded. On January 28, 2002, M filed a complaint for rescission of contract against V. In the said complaint, M sought the return of P185,000 which he paid to V. Is the failure of V to deliver to M both the physical possession of the subject property and the certificate of title constitutes a valid cause to rescind the agreement and deed of sale entered into by the parties? Answer: Although Articles 1458, 1495 and 1498 of the New Civil Code and case law do not generally require the seller to deliver to the buyer the physical possession of the property subject of a contract of sale and the Certificate of title covering the same, the agreement entered into by V and M provides otherwise. However, the terms of the agreement cannot be considered as violative of law, morals, good customs, public order, or public policy, hence, valid. - Balbino Mangaoil, GR, No. 198661, April 11,2012. 81 iCHAPTER IV - OBLIGATIONS OF THE VENDOR: ‘ Article £488 of the NCC obliges the seller to. transfer 4p, ownership of and to deliver a determinate thing to the buyer, who shal) i barn pay therefor a price certain in money oF its equivalent. In additi,,, thereto, Article 1495 af the NCC binds the seller to warrant the thing which is the object of the sale. Ont the other hand, Article 1498 of t)/ same code provides that when the sale is made through a Publi. dastrument, the execution thereof shall be equivalent to the delivery of the thing which ts the object of the contract, If from the deed, the contrar, does not appear or cannot clearly be inferred. ; In the case of Chua v, Court of Appeals, which was cited by V, jy was ruled that "when the deed of absolute sale is signed by the parties and notarized, then delivery of the real property is deemed made by the seller to the buyer.” The transfer of the certificate of title in the name of the buyer is not necessary to confer ownership upon him. ; As can be gleaned from the agreement of the contending parties, M initially paid V 2:185,000 for the latter to pay the loan obtained from ¢ Rural Bank and to cause the release from the said bank of the certificate of title covering the subject property. After the release of the TCT, a deeq of sale shall be executed and transfer shall be immediately effected so that the title covering the subject property can be used as a collateral for a loan M will apply for, the proceeds of which shall be given to V. While Articles 1458 and 1495 of the NCC and the doctrine enunciated in the case of Chua do not impose upon V the obligation to physically deliver to M the certificate of title covering the subject property or cause the transfer in the latter's name of the said title, a stipulation requiring otherwise is not prohibited by law and cannot be regarded as violative of morals, good customs, public order or public policy. Item no. 3 of the agreement executed by the parties expressly states that "transfer shall be immediately effected so that the latter can apply for a loan from any lending institution using the corresponding certificate of title as collateral therefore." Item no. 3 is literal enough to mean that there should be physical delivery of the TCT for how else can M use it asa collateral to obtain a loan if the title remains in V's possession. V failed to prove that she delivered the TCT covering the subject property toM.10 Art. 1499. The delivery of movable property may likewise be made by the mere consent or agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale, or if the latter already had it in his possession for any other reason. poesia iptntmenlgaieni rn ye EstelitaVilorar vs. Babine Margaol CR, No. 188661, April 11,2012, 82EE OE FE CHAPTER IV - OBLIGATIONS OF THE VENDOR ‘The above-stated article s ‘peaks of two kind which are traditie longa manu ar Inds of constructive delivery dl traditio brevi manu, Actual delivery vs. Constructive delivery itly, the law provides that the ownership of the thing sold the vendee from the moment itis delivered to him in any of the ways specified in Article 1497 to 1801, The word “delivered” should not be taken restrictively to mean transfer of actual physical possession of the property, The law recognizes two principal modes of delivery, to wit: (1) actual delivery; and (2) legal or constructive delivery. Actual delivery consists in placing the thing sold in the control and possession of the vendee. Legal or constructive delivery, on the other hand, may be had through any of the following ways: the execution of a public instrument evidencing the sale; symbolical tradition such as the delivery of the keys of the place where the movable sold is being kept; traditio longa manu or i Explic is acquired hy time of the sale; traditio brevi manu if the buyer already had possession of the object even before the sale; and traditio constitutum possessorium, where the seller remains in possession of the property in a different capacity.41 Problem: On August 20, 1986, Spouses H and W purportedly sold the two parcels of land to B for the price of P15 per square meter. B made a downpayment of P50,000 as evidenced by a memorandum receipt issued by W of the same date. Several other payments totaling P200,000 were made by B. Sometime in May 1989, B wrote a letter to W to demand the execution of a final deed of sale in his favor so that he could effect full payment of the purchase price. In the same letter, B notified the spouses about having received information that the spouses sold the same property to another without his knowledge and consent. He demanded that the second sale be cancelled and that a final deed of sale be issued in his favor. In response, W wrote a letter to B wherein she acknowledged having agreed to sell the property to him at P15 per square meter. She, however, reminded B that when the balance of the purchase price became due, he requested for a reduction of the price and when she refused, B backed out of the sale. W added that she returned the sum of P50,000 to B through C. San Lorenzo Development Corporation vs. CA, étal, GR. No, 124242, january 21, 2008. 83sur VENDOR LIGA TIONS OF Ht VEN! CHAPTER IV - 08 ipie: Performen Mey gag, B. filed # ommpaint for Spee 2 june 1989, Laenantte against bert W. Did B acquire one Answers yecution ofthe Feely gle o8 rt Bdid net acqui e re ownership BY eR he property. For on partial pay! as not embodies a rac ay Wacko ‘and W, chou vad Me lands couy B ay 7 the ageeement een Hence, 10 construct rere possession OF the oy iva public instrument Pe Tyother, B had not We Te in his favor g, ; j i me after the perfection © tions that he was th propery at any ie aT oe Tite his assertions that he wa sth exercised acts of rn nin nap seated, tere wa! ne lands. a tal to transfer ownership, rightful ewner 0! lan ve which fs essent whether actual or const we : sessorium. % may also be tradition consticutum POSSeSSOrI ; ca Se mins nd of delivery, the law considers all the te ler ‘ rave taken place by agreement of the parties. : al property, the provisions of the Pca ae 50. oe maar pone races ragraph of article 1498 sl n it frst paragraPs are not applicable, the placing of the titles of ownership sie possession of the vendee or the use by the vendee of his rights, with the vendor's consent, shall be understood as a delivery. Delivery of incorporeal property 1, Execution of public instrument; ; 2. The placing of the titles of ownership in the possession of the vendee; or 3. The use by the vendee of his rights, with the vendor's consent. Art. 1502. When goods are delivered to the buyer “on sale or return" to 4 give the buyer an option to return the goods instead of paying the price, = the ownership passes to the buyer on delivery, but he may revest the ownership in the seller by returning or tendering the goods within the time fixed in the contract, or, if no time has been fixed, within a reasonable time. When goods are delivered to the buyer on approval or on trial Fe or on satisfaction, o1 to the Buyers r other similar terms, the ownership therein passes (1) When he signifies his approval or acc e| any other act adopting the feameaccisa ee ee aoe (2) mI ane not signify his approval or acceptance to the seller, but Mea peaiaa agenda without Siving notice of rejection, then if a time @ for the return of the goods, on the expiration of such cea yy nw 6 * San Lorenzo Deveioy Pent Corporation v8.CA, etal... No, 124242, January 21, 2005,GATIONS OF ‘THR VENDOR, CHAPTER iV - OBL een fixed, on the expiration ofa if no time has be ime isa question of fact. qime, and, What is a reasonable ti reasonable time. ce,” “sale on trial," or “sale on twithstanding delivery of he following instances: to the seller or does ‘sate on approval ‘Also called " sale on acceptan eatisfactaon®, There ts NO transfer of ownership no the goods. Ownership passes to the buyer only in # 1, When the buyer signifies his approval or acceptance any other act adopting the transaction; 'S and B entered into a contract of Sale on Trial or Approval. The object of sole were 12 tables. Subsequently, * delivered the said tables. In this vase, there és yet no transfer of ownership despite delivery until the buyer signifies his approval, What if B did not ‘signify his approval but he sold these Sores to C? Then, there is transfer of ownership as B did an act adopting the transaction. or acceptance to the seller, but proval has 2. Ifthe buyer does not signify his ap retains the goods without giving notice of rejection, then if a time is, on the expiration of such time, and, been fixed for the return of the good: ifno time has been fixed, on the expiration of a reasonable time. Example: ~ and B entered into a contract of Sale on June 1, 2017. S$ simultaneously delivered the 12 tables, the object of sale agreed upon. One of “recide until june 30, 2017 on whether to accept the their stipulations is for B to tables so that if he rejects it, then he shall return the tables not later than June 30, 2017. If B did not yet issue a notice of rejection on July 1, 2017, then there is transfer of ownership. What if there is no date agreed upon for the return of the 12 tables? ‘Then B shall return the 12 tables within a reasonable time; otherwise, there is transfer of ownership after the expiration of the reasonable time. What is reasonable time is a question of fact. Sale or return Ina "sale or return,” the ‘ownership passes to the buyer on delivery. ‘The subsequent return of the goods reverts ownership in the seller. Delivery or tradition as a mode of acquiring ownership must be in consequence of a contract, e.g. sale.!? written agreement in Sale or Return or Sale on Approval The provision in the Uniform Sales Act and the Uniform Commercial Code from which Article 1502 was taken, clearly requires an express written — 1» Vidoria R Vallarta vs, CA and Judge Francisco Llamas, G.R, No, L-40195, May 29, 1987 85a } ATIONS OF vHE CHAPTER TY © OBLIG to eae cartes 10" val”. Parolor exteenste te: i: af chowing that ant tnyeice OE bu of sae and purporting © Tembudy a sale withe a contract of sale oF Corun f the govd and reject the rest si proval” situa parties in the “on @P! “payer on return ratory condition ‘areso eS v-atirely on the will of the buyer _. F isk of oss rests upon the buyer Art. 1503. When there I may, by the terms of the c ownership in the goods until right of ssession oF notwithstanding the delivel ‘ther bailee for the purpose Where goods are shipped, deliverable to the seller or his agent, his agent, the seller thereby reserves the owners! f the bill of lading, the ownership would have except for the form o! rier mamany cout ie Gwnership remains until approval or ace | approval oF a eee condi [ Subject 10 2 eee ee ee cod nthe quality of the goods Depends 0} is a contract of sale ontract, reserve certain conditions have ownership may be, thus, ry of the goods of transmission to the buyer. and by the bill of lading the goods are vENDOR or re adiraitt far the purpes, aplete in eVeTY asp, Peeriction CONSE jurntor a “sate ., ed a ‘sale not be that was 6° condition oF Yr 4 7 cannoraccept par, ye buyel and, the buyer mal intent of the falls side the 1 ais nts O46. in the seller buyer signifies his tance to the seller , sive condition the | ler Risk of loss remains with the seller of specific goods, the seller the right of possession or been fulfilled. The reserved to the buyer or to a carrier or or to the order of the seller or of hip in the goods. But, if passed to the buyer on shipment of the goods, the seller's it the goods shall be deemed to be only for the ae Secon performance by the buyer of his obligations under the contract. . denrestiets goods are shipped, and by the bill of lading the goods are peed rder of the buyer or of his agent, but possession of the Seer aie by the seller or his agent, the seller thereby ee ne possession of the goods as against the buyer. pen arr ee ree pe secure acceptance or payment of th ee ene toretur the bl of lading ithe does not honor aoc oe on if he wrongfully retains the bill of fea honor the bill of exchange, and Ing, he acquires no added right +4 Industrial Textite! Jamuasy 21, 1993: : onufacturing Company ofthe Philippines tac. vs: LP] Enterprises, Inc, GR. No. 66140,Vv - OBLIGATIONS OF THE VENDOR OLLI FE OTM Slee he HAPTER! at the goods are or is indorsed itt the bill of lading provides th one who ‘or to the order of the buyer by the consignee pared ading, oF goo ot ae, ak the bitt of he goats, 4 If however, Je to the buyer the buver > gherehy. getiverad ik, or to porehases in good faith, for value, the itl obtain the ownership int ae nge has not been honored, provided that such purc’ er ne received delivery of the bill of lading indorsed by the consignee ark thout notice of the facts making the tra’ therein, oF of the goods, wi wrongful. Note: le applies to the sale of ‘specific goods. aph of Article 1523 . | presumption provided in This artic 1503 is an exception to the first paragr! Article 1503 is an exception to the general the frst paragraph of Article 1523, which reads: Article 1523. Where, in pursuance of contract of sale, the seller Is authorized or required to send the goods to the buyer, delivery of the goods toa carrier, whether named by the buyer or not, for the purpose of to the buyer is deemed to be a delivery of the goods to the the cases provided for in Articles 1503, first, second and third paragraphs, or unless a contrary intent appears. 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. ifthe seller omit so to do, and the. goods are lost or damaged in the 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. ness 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 és 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. transmission buyer, except in Article 1503, on the other hand, provides: Article 1503. When there is a contract ofsale of specific goods, the seller may, by the terms of the contract, reserve the right of possession or until certain conditions have been fulfilled. The right of ownership in the goods 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 | 4 the seller or of his the seller thereby reserves the ownership in the goods. But, if except, Hs hepa 87: VENDOR CHAPTER IV OBLIGATIONS pp THe vel sed tothe Buyer on ships, —amerenip wnvend MAVEPTTIT rg cegred £0 nshipm poe butt at tating: ane nena tthiD rT ts ne : ia aie ponds, the pete a peoperty oe ms an nt ie Sano he pipet OF OU forme eentrinct pyred arid by hE putt of tain the G00ds a, where goods are ee a og tds agent BATE possession of the in heding ed of Mine seer oF Rts agent, anit “ BY Feserve, pn jon of the goods as inst the buyer. gu rie aright tod sreetler af goods «ariws the et on Waere the se rinye and Pill of lading together Co bt secu iil af Ext eee pill of exchange the buyer IS bound to return th, ‘ he does not honor th xchange, and iy he wrongful, Da of Baring ang, he acquires 20 iH ota right enereby. If HOWEVEr, th retains che hl of fade. aasare deliveran the buyer or to the orde, mae the buyer by the consignee nam desysed in prank, oF £0 the HYE! ft e af the bur, om chases in good faith for value, the bill of lading, or goog, therein ne wie pu jp in the goods, although the bill ¢ vil obtain the ownershi / exchange has vt been hon! that such purchaser has receive red, provide : haser he delivery of the vill of tading indorsed by the consignee name erein, OF Of the goods, st notice of the facts making the transfer wrongful. Articles 1523 and 1503 do not apply toa contract of carriage Articles 1523 and 1503, therefore, refer toa contract of sale betwee, seller and a buyer. In particular, they refer to who between the seller and the buyer has the right of possession orownership over the goods subject) of the sale Articles 1523 and 1503 do not apply to a contract of carriage between the shipper and the common carrier, The third paragraph of Article 1503, does not oblige the common carrier to withhold delivery of the goods in the event pat the oa of a is retained by the seller. Rather, it only gives the sellera tter right to the possession of tl i i ee po: jon of the goods as against the mere inchoate right Acontract of sale is separate and distinct fi They involve diferent ¢ , tinct from a contract of carriage abilities nt parties, different rights, different obligations and tremenats: the dil geveptance or payment a7? Art. 1504, until the SEER TISein Cae eeard ternal at the seller's risk ownership the! e buyer, buyer's risk isi eee ces to the buyer, tin goad ire A fe (1) Where delivery of th delivery has been made or not, except tha: ballee for the bu or goods has been made to the bu rae ownership in the sous a pursuance of the contra: a or to a secure performance ky een retained by the sell boat y the buyer of his obligations | nee under the better Baskets, Inc vs. Al ea Transport, ‘and Asla Cargo Container: March’ wer Babs, Ins. lr Bea Ine. and Asla Cargo Container Lines; ies GR, N Ine. G.R, No, 184513, March.TIONS OF THE ¥ NDOR Oe EEE EE AE AE A EEE Pe pBAPTER IV © 0 goods are at the Insyer's risk from the ume of such Jayed through the fault of either risk of the party fn fault. contract, the delivery: (ay where actual delivery has beert del the buyer or seller, the goods are at the The general rule is that the risk of loss of specific goods is horne by the ferred to the buyer. ‘eller until the ownership therein is eran blem: Pr On September 14, 1979, Hand W purchased from X Motor Corp. ‘one Cimarron Jeepney for P37,758.60 to be paid in installments. For La purpose, H and W executed a promissory note and a deed of. chattel mortgage in favor of X Motor Corp. Meanwhile, X Motor Corp. entered into a contract of assignment of the promissory note and chattel mortgage th ¥ Finance, Inc, Through S, an agent of X Motor Corp, the parties agreed that H and W would pay the amount of the promissory note toY Finance, Inc, the latter being the assignee of X Motor Corp. To effectuate the sale as well as the assignment of the promissory note and chattel mortgage, H and W were required to sign a notice of assignment, a deed of assignment, a sales invoice, a registration certificate, an affidavit, and S disclosure statement in order to have their application approved. Upon H and W's tender of the down payment worth P10,037, and X Motor Corp.'s acceptance of the same, the latter approved the sale. Although H and W have not yet physically possessed the vehicle, S required them to sign the receipt as a condition for the delivery of the vehicle. H and W continued paying the agreed installments even if the subject motor vehicle remained undelivered inasmuch as Y Finance, Inc. promised to deliver the subject jeepney. H and W have paid a total of P7,507 worth of installments before they discontinued paying on account of non-delivery of the subject motor vehicle. According to H and W, the reason why the vehicle was not delivered was due to the fact that Ss allegedly took the subject motor vehicle in his personal capacity. Should H and W bear the loss of the jeepney in accordance with Article 1504 of the New Civil Code which provides that when the ownership of goods is transferred to the buyer, the goods are at the buyer's risk whether actual delivery has been made or not? Answer: According to testimonial evidence adduced by H and W during the trial of the case, the documents were signed as a part of the processing and for the approval of their application to buy the subject motor vehicle. Without such signed documents, no sale, much less delivery, of the subject jeepney could be made. The documents were not therefore an acknowledgment by H and W of the physical acquisition of the subject 89that the por x Motor COM go that the sii, rely. a rea hem. oe: pat merely: ane denivered 10 FETS | oiee does not prey, ae would sales vente ceo jer; any invoice IS HOthin,, sotto them quantity and cost of the hot a bill oF sale: atromen proter’ vehicle ict INOKOT sap we haven trancfer oF owners etaile it amore than 2 ae een consiciered HO 8 a and W does nix thing sold and tion certificate SIE was made Mor thay The registration constructive deliver the receipt and thy sty oe t,t a ee a ener ng tthe safd documents WA® financing contract x, invoice, the s ale and was a requirement of X MOror Corp. for the sal ary that the act 9 a be approved. In a wheth w of detivery, Ht fs Mees rea with th 5 of ae actual, should be COUPI Win the y, er constr thing. The act, without aaah L, is eee of delivering the the different modes of effecting delivery 1. The eritical factor in th LG intention of the vendor ty legal effect to the act ist ia without that intention, there ig Getiver, and is acceptance Wy relic and Tioco wherein we rule, pe trodition. Enlightening is a th vendor the obligation to deliver the thing ee pe aera to be delivered when it is placed in the hands and possession ofthe vendee. (Civil Code, Art. 1462). Itis true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contrac, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had control over the thing sold that, at the moment of the sale, its material delivery could have been made. it is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor; symbolic delivery through the execution of a public instrument is sufficient. But if notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through i ne ma 7 7 other in his name, because such tenancy and enjoyment are Oppose’ 7 the interposition dale will, then fiction yields to reality the delivery Siege Bu of signing bes registration certificate was not intended td neo P of the subject motor vehicle to H and W inasmuch 'p. t ill needed fees for the approval of the financing ins . ironed shows that the registration has ae, Inc, which took possession T to hand over the said document !? Hon certificate was still Kept by Y Finan thereof until $ re h quested the |; him. The fact that the Fepistratr the ced ing s true rumen, e contra: ftraditiy things een mai 1 ther n theres: e tena. y throug nstandiy njoyme: - throug posed » delives ndedt asm pant stra sess nett? ino iE vENDOR BLIGATIONS or TH CHAPTER IV ~ o ta show that fies unhesitating move CO give the same tS just ques te nh Ine. AN stilt had na complete contrat aver the sublet archi Har inet even possess the sald niente of reqistratton Pek 8s packet a ht when Y Finance, Ine. handed over the said jor every FS eee nuch as there was neither mysical nor constructive gel emi case, the subject motor vehicle), the ' pould therefore bear the ofa determinate thing (i thi sold remained at the seller's toss of the subject motor vel Subject to th aperson who is not the ow! under: authority or with the consent of ‘the owner, ir Hitie to the goods than the seller had, unless goods is by his conduct precluded from denying the selle in this Title, however, shall affect: ny factors’ act, recording laws, Or any other bling the apparent owner of ‘goods to dispose the true owner thereof; f sale under statutory power of sale petent jurisdiction; or in fairs, or markets, im d special laws. k. X Motor Corp. 51 wicle after S allegedly stoke the same 6 re goods are sold and who does not sell them the buyer acquires no the owner of the 1’s authority to e provisions: of thts Title, whe: ner thereof, Nothing b (4) The provisions of a provision of law ena ofthem as ifhe were (2) The validity of any contract o| or under the order of a court of com ‘chases made in a merchant's store, (3) Pur accordance with the Code of Commerce am General Rule: 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. Exceptions: 1 The owner of the goods is by his conduct precluded from denying the seller's authority to sell. 2. A provision of law enables the apparent owner of goods to dispose of 3 a as if he were the true owner thereof. . The validity of any contract of sale unde ler statute ‘ under the order of a court of competent irieiecanta rn i -Purchises made in a merchant's store, or in fairs, or markets, ii a nce with the Code of Commerce and special laws. a , Where the seller of goods has avoidable title thereto, 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 _ Union Motor Cor poration vs, CA, etal, G.R.No. 117187, July 20, 2001, 1 sitsyENDOR CHAPTER IV - OBLIGATIONS OF THE good faith, forvay,, gootts, therm 1 , provided he puys and “thot more of the eller’s defect of ti wi red valid, is annutted, #18 considel © Before avoidable concract is: L tiff (Tagatac) sold her car to Feist, wp, plain ment. check issueq ;, 5 ez, When the pay! : 7 i ero Hr agar by Bs ns Hine ahe had beet unlawfully Pe ved 50 Jimenez on the gating for Jimenez, the Sour of stad C Tagatac has be, Feist’s deception. | is whether plaintiff-appel Jani ould seem that she The pom aprved of her car. At frst blush oy pare with, ey qorved thereof, considering te Warner Le Feist. Cer fepris eee ether : papas of the chicanery Re ood of deprivation of Property. In, swindling, like pane intipappellant was “illegally deprived’ of her a ron eich Warner Feist induced her to part with i egal and j, ished by law. But does this “unlawful deprivation” come within the scope ee ee XXX XXX 4 i ‘ist earmarks this sale q: + The fraud Rial iitied Mac reesra voidable contract, ae eerie of ater ratification or annulment. If the contract is ratified, th action to annul it is extinguished (Article 1392, N.CC.) and the contract i cleansed from all its defects (Article 1396, N.C.C); if the contract is annulled the contracting parties are restored to their respective situations before the contract and mutual restitution follows as a consequence (Article 1398, N.C.c) However, as long as no action is taken by the party entitled, either tha of annulment or of ratification, the contract of sale remains valid and binding When plaintiff-appellant Trinidad C. Tagatac delivered the car to Feist by virtue of said voidable contract of sale, the title to the car passed to Feist. 0f course, the title that Feist acquired was defective and voidable. Nevertheless, at the time he sold the car to Felix Sanchez, his title thereto had not been avoidei and he therefore conferred a good title on the latter, provided he bought th car in good faith, for value and without noti a en mes (Article 1506, N.C. lotice of the defect in Feist's titk é 1 ~). There being no proof on record that Felix Sanchez actei in bad faith, it is safe to assume that he acted in good faith? ae Article 1505 vs, Article 1505 refers Article 1506 tosale with avoidable tite, "* With Votd title, while Article 1506 refes in 2 oeHONS OF ‘THE VENDOR cuapTbR IV - OBLIGAT * ods that the go ‘ 1507, A document of title in which It Is a (het Maer of any erre ‘avail! be delivered to the bearety a referred vo ein ‘table document of title. i person named in such document is a nego! of title to goods . AD ehouse Fei er iaindes any bill of lading, dock warrant quedan, i a ne Br receipt or order for the delivery af goods, or any — oe ner ‘roof oythe cle siyse of business in the sale or transfer 5, as he rea or On nse Otero! of the goods, or authorizing OF purporting ie ‘ petnorite tthe possessor of the document (0 transfer or receiv, a ° teh Girforsemont or By delivery, goods represented by such document she hy ce: ' «acti f Cena Goods cludes all chattels personal but not things in action OF money o ey, Jegal tender in the Philippines. The term includes growing fruits or crop’ Car al ag, oflading / * SCopy, Bl ‘Adocument acknowledging the receipt of goods by a carrier or by the : 'd the contract for the transportation of those goods; a nt and that is issued shipper’s agent an : document that indicates the receipt of goods for shipme by a person engaged in the business of ‘transporting or nt that serves as evidence of receipt of goods for ship! forwarding goods.'® ment A docume! issued by a common carrier. Dock warrant ‘An interim document issued by a maritime carrier to evidence the delivery of goods at the dock.!? ‘A warrant given by dock-owners to the owner of merchandise imported and warehoused on the dock. Quedan ‘Awarehouse receipt that covers sugar. Warehouse receipt A document evidencing title to goods stored with someone else; esp., areceipt issued by a person engaged in the business of storing goods for a fee. i war iouse receipt, which is considered a document of title, may be a negotiable instrument and is ofte i ith inven ea is often used for financing with inventory as Areceipt received by the bailee to be delivered to the bearer or to order of any person named in such receipt or to a specified person. kes ‘seep 198, Black’s Law Dictionary, Tenth Edition Y ‘2400 p.585, Black's Law Dictionary, Tenth Edition. See p.1817, Black’s Law Dictionary, Tenth Edition. 93 —————yRNDOR qHAPTER IY” pMntGA TIONS oF THE ct ¢ bear’ a , stanids For th goods IL covers, so nee that actually Manas docu ae 7 : two ‘Adacurnent pata A rahe goods reapaes 3 e : ay rao et te at whic tS istatedt that te goods referred , rder of any person name, . 41 A docarment © fait be detivered to the bearer, prsuch document. TRE document es 0 the gowns are deliverable to wares OF 2 Toegoeds are deliverable to the order of acertaltt person. 2 Non negotiable Document of Title | ‘A document of title that merely serves a5 evidence of the goods , covers? Art. 1508, A negotiable document of title may pe negotiated by deliver, (2) Where by the terms of the document the carrier, warehousem, wg Art gr other bailee issuing the same undertakes to deliver the oon, er to the bearer; Or toe {2) Where by the terms of the document the carrier, warehouse: ‘wo , syecher bailee issuing the same undertakes to deliver the goog, a TNO e . to the order of a specified person, and such pers se) nce! - Rosequent endorsee of the document has ind See me ’ as indorst i 8 ? . te bers, itin blank cor ye terms of i wwe deliverable to bearer of es negotiable document of title the goods car see eae oy Neer any holder may indorse the sm th ; , any holder may ind to Z ay in en or to ov specified person, and in such pone he don ‘ae eafter negoti: cum: endoreee. gotiated only by the endorsement of ey nA ‘of such ne Balle, meaning a] Someone who recei es receives possessio : personal proj ad the ae nettle to the property. A pallee ae another, and ha © «i Someone who b: is returned to the owner. ponsible for keeping Ne of tite acknowledges -y warehouse receipt, bill of ladi oe Possession of goods and contrat ing, or other documer! ¥ cts to deliver them. A title of the docume: may be negotiated : nt deliverable, Such = onder the goods are by sure the bearer or to be a specified ndorsemi again negotiated by the en Ifindorsed to = may be in blank, # endorsement of sch, cified person, it ma! Person in blank, 2580 989, black’ 2 her pane Cet s Law bk EB, ction eee peg eee ae pre Tenth Eto, nk law Dinar Tee eo . Tenth Edition,ret the saw of sud and ke peurnes em? by gpk ie nk? VENDOR € HAPTER Ww OBLIGATIONS OF THE ent negotiations may be rer or to another specified person. subseq! made in like manner, qwo Kinds of Negotiation 1.Delive! the one issuing the same here by the terms of the document, undertakes to deliver the goods to the bearer. indorsement and delivery 2.BY Indo endorsement may be in blank, t0 bearer, or to a specified person. 1s to negotiation by indorsement and delivery. ins an undertaking by 4 ‘er the goods to bearer, which contains Article 1509 pertain: title which contaii Art. 1510. If a document of ther bailee to deliv darrier, warehouseman oF O! toa specified person or order of a specified person or words of like import, has placed upon it the words “not negotiable,” worrnegotiable” or the like, such document Waly nevertheless be negotiated by the holder andis a negotiable document of title within the Meaning of this Title. But nothing in this Title contained shall be mestrued as limiting or defining the effect upon the obligations of the ‘warehouseman, or other bailee issuing a document of title or carrier, the words "not negotiable,” “non-negotiable,” OF the placing thereon like. Art. 1511. A document of title which is not in such form that it can be negotiated by delivery may be transferred by the holder by delivery to tiable document cannot be negotiated a purchaser or donee. A non-negot and the endorsement of such a document gives the transferee no additional right. Non-negotiable Document It cannot be negotiated. Art. 1512. A negotiable docume: nt of tit 9 By the owner therefor; or eee By any person to whom the i possession or custody of th tas tea bpebrinie by the owner, if, by the fae of the fide noe oe ee Hering the document undertakes to deliver the ered Sera ras person ‘fo whom the possession or custody of rusted, or if entrusting the document is in such form th: ri es y delivery. at it may be negotiated 85 ae ——eoR cn pore VE CHAPTERIV’ omucartons° a ¢ritle: oF can negotiate? otiable aveunent © ody of the document h, 2. Any per sown? ne issuing the docuny, nt ; eed @ document pailee, 185 arson to whom, tw ‘a By the serms 5 to « a; 'e vjetiver the BF n entrusted; OF eas toy 1 doce enim such form tha, PN session of such entree tae bi ae negousted by delivery: Effects ith ast, 1513.4 person [0 whom @ negotiable document of title has bee, 1. 1 2 ereby? . duly negotiate aegis rete person negotiating the document , tre (4) Such Ce had ability t convey to purchaser in good faith fo, 2.7 aan ‘jals0 Such title to the goods as the person to whose orde, ar the goods were tO be delivered by ‘the terms of the document hay th or had ability to convey toa purchaser in good faith for value; ang ‘ (2) The direct obligation of the bailee issuing the document to holy paile ession of the goods for ‘him according to the terms Of the document as fully as if such bailee had contracted directly wit, poss him. the p Effects of negotiation: of tit Aperson to whom a negotiable document of title has been negotiate; quires: Art. a, Titleto the goods as the person negotiating the document to him hai by | or. had ability to convey to a purchaser in good faith for value and als neg eae ene to the goods as the person to whose order the goods were tobe con elivered by the terms of the ‘document had or had ability to convey to apr 5 purchaser in good faith for value; and : on . The direct obligation il possession of paar herkennalraorte ie aoerie nt to r : as fully as i ; e terms of the doct _ Eff ly as if such bailee had contracted directly with him. ume en Art. 1514. A person R to whom a docum : ent of title has been transferred, yr $0 but not negotiated, ac |, acquires thereby, to the goods, subj , as against the trai it mod sbject othe terms of any agreement och the roan right to notify the ballon eae such person also Sequirest ereof, and 0 issued the d thereby to acquire the direct obligation of f ne & an uch bailee tt hold possession of the document. goods for him accordi 4 " ling to the terms of tt ae Prior to th transferee of a eee to transferee to the goo su -tlegotiable document ora the transferor tle, the title of ds and the ri; hi ight to acquire the obligation of sub atity mh das to yt me SEs ‘ ¢ y E Vl CHAPTER Wv- OBLIGATIONS OF on attachment of execution UP! tion to such tor of the transferor, or bya notifica' subsequent purchaser from the transfer of e transferor. may be defeated by the levy of a" ods by a credit transferor or a sale of the goods by th bailee the £0" hailee by the asubsequent the rights of a transferee, not the rights of 4 Note: This article deals with egotiated. person to whom the document was M Effects of Transfer (Not negotiation) | ts whom the document is assigned acquires rms of any agree! ‘Aperson subject to the tel ent of the transfer 1. The title to the goods, transferor; and 2. The right to nol issued the docum’ a and also acquire ‘of such bailee to hold possession of the goods for him accor the document. ment with the tify the bailee who i the direct obligation ding to the terms of Baile, meaning Someone who receives personal property from another, and has Abailee is responsible for keeping possession of but not title to the property. the property safe until it is returned to the owner. ‘Someone who by warehouse receipt, bill of lading, OF other document of title acknowledges possession of goods and contracts to deliver them,?* ‘Art. 1515. Where a negotiable document of title is transferred for value by delivery, and the endorsement of the transferor is essential for negotiation, the transferee acquires a right against the transferor to compel him to endorse the document unless a contrary intention appears. The negotiation shall take effect as of the time when the endorsement is actually made. Effect of transfer of a NEGOTIABLE document of title without endorsement The transferee acquires a right against the transferor to compel him to endorse the document unless a contrary intention appears. Note: The negotiation shall take effect as of the time when the endorsement is actually made. Art. 1516, A person who for value cum negotiates or transfers a di title by endorsement or delivery, including one who assigns for al + s¢e p.168, Black’s Law Dictionary, Tenth Edition. 97oenrGaTio’! inten intens * contrary they, e document of vide © 7 aes is genuine gransfer 56 ost are oF CoE aie ach would impair the validy, pst 5 kno : ot the doe men ee she tide to tHe goods and that 1, wns H ple or ie for # icular purpose, WHENE ve, o gaive intend have beer implied sf the contract of th, 2 gor to trans! without? document of title the goog, a tae by: = ante red thereby: ete on ation oF Assignment ee re document is gemuines : or it has a legal right to negotiate oF transfer its : e of no fact which would impair the validity ,. ofthe document; ree 4. That he has 3 right to transfer the title to the goods; and exe & ‘That the goods are merchantable or fitfor a particular purpose. 1 NEGOTIATION 2 The transfer of possession of an instrument, whether voluntary 9; fnvoluntary, by a person other than the issuer to @ person who th . ate becomes its holder 25 10 thereby : po ASSIGNMENT Ex The transfer of rights or property. Art, 1517. The eae ee eae en ofa document of title shall not make th 2 document or acl va aa on the part of the bailee who issued i: i im endorsers © fn obligations. thereof to fulfill their respective i Effect of failure of i bailee obit or previous i ligations endorsers to fulfill their ; It shall ! not make the present endorser liable. ( e Vi of negotiation of a neg Art, 1518. The validity of the negotiati f a negotiable document 0 Sle is not impaired by the fact that the negot we re impaired Ql ed by the fact that the negotiation was " ti abreach of duty ue on the part of the perso 0) rm erson making the ney the t gotiation, or by the fact that Me as deprives 10! e by ; : d of the amt ’ Pi ao of the same bY Bae mistake, duress, or conversion, if the perso” a see 9.1200, 1.1200, Blac Hee 142, Bac | Law Dictionay ry, Tenth & ‘aw Dictionary, Tenth pingVolunty Who the! ot make 0 issuedy " Pespedt fulfill the pcumedl! ach oft act that ne sant! the pe THE VENDOR HAPTER Wv- OBLIGATIONS oF was negotiated OF 4 tly negotiated pal e document fh of duty, oF I ment was subsequer fh without notice of the breac mistake, duress OF conversion. red toa bail! to whom he mer or D} chaser in goo ee by the ow! 9. If goods are delive! 2. pA inconveying the title to them oe e Pe wuld bind the owner and a negotiable cannot thereafter, WD therwise ument Of jon of such pailee, be execution gotiation to deliver up the ele red to him who: value wo" for them they attached by garnish Gnless the document be fi enjoined. The bailee shall in no ¢: actual pos: the goods until the doc! session of or impounded by the court. General Rule: No attachment Exceptions: 1, The document be first surrendered 2. The documents’ negotiation is enjoined. to the bailee; or to deliver up the actual General Rule: The bailee shall in no case be compelled possession of the goods. Exceptions: jered to the baile; or 1. The document is surrend 2, The document is impounded by the court. ‘Art. 1520. A creditor whose debtor is the owner of a negotiable ited to such aid from courts of appropriate document of title shall be enti jurisdiction by injunction and otherwise in attaching such document or in satisfying the claim by means thereof as is allowed at law or in equity in regard to property which cannot readily be attached or levied upon by ordinary legal process. Creditor’s remedies He is entitled to such aid from courts of appropriate jurisdiction by injunction and otherwise in attaching such document or in satisfyi i | nt or in satis! tal by means thereof as allowed at law or in equity in regard to See ich cannot readily be attached or levied upon by ordinary legal process. Injunction, meaning A court order commanding or preventing an action.27 * see p904, Black's Law Dictionary, Tenth 99 stspor a8 judgment or to bea n of the BO0ds ,, the «OOK ott ‘ aestninn of I Aa ee possess “ om ristor the poy?! a yestion depending in each are san. WHEEL ben he Buyer od. bet een the P 8: ADan coe her to send tl for inplie’ 4, of e of trade to th, oer implied: Oe of business If he hy, we on the foxpress ot ce aha n conte ry i te ses Pontract of sale of specif, a0 contrary, ee nis residence? but beng parties the onan OF the one. a knowledge © place, then that place Is the place sale was d to send the Hier is boun Bod, ofsale hem is fixed, the seller is bound t, me. time of sale are in the possession of , led his obligation to deliver to the the seller has not fulfil gine oeewledges to the bes 's behalf. the goods on the buyer be treated as ineffectua, r of delivery may bayer that he holds is a reasonable hour is, Demand oF tende! made at a reasonable hour. What s of and incidental tp of fact. therwise agreed, the expense: aesod verable state must pe borne by the seller. patting the; goods into a deli the place and manner of delivery is parties. The thing sold can only ke placed in the buyer's contro A stipulation designating controlling on the contracting understood as delivered to the buyer when it is and possession at the agreed place of delivery. Place of delivery 1. The place of delivery agreed upon; a i ioe 7 no agreement, it is determined by usage of trade; . If there is no agreement and usage of trade, it i i business if he has one, and if not his residence; ——— 4 8 a et a contract of sale of specific goods, which to the knowledge“ en the contract or the sale was made were in some othe. place, then that place is.the place of delivery. ae % see p.1S2, Black’s Law Dictionary, Tenth Edition, San Fernando bodied = Regala Trading, Gargil Phippines, ne, GR. No.178008, October 4 ; October 9, 2013. ont Qyi yi im CHAPTER LV - OBLIGATIONS OF THE VENDOR Note: Where the delivery was not effected at the place specified An the eantnact bit the buyer accepted the qouds without camplaint, the buyer would be deemevd to have watved the seller's fuilure to deliver according to the terms af the contract, and would be liable to pay the price agreed upon. ‘Time of delivery 1, Stipulated time; 2. In the absence of agreement, within a reasonable time. Where the goods at the time of sale are in the possession of a third person The seller has not fulfilled his obligation to deliver to the buyer unless and until such third person acknowledges to the buyer that he holds the goods an the buyer's behalf. ‘When must demand or tender of delivery be made? Ata reasonable hour. Note; What is a reasonable hour is a question of fact. QUESTION OF FACT An issue that has not been predetermined and authoritatively answered by the law.30 Who pays for the expenses of putting the goods into a deliverable state? The seller, unless otherwise agreed. Art. 1522. Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered, knowing that the seller is not going to perform the contract in full, he must pay for them at the contract rate. If, however, the buyer has used or disposed of the goods delivered before he knows that the seller is not going to perform his contract in full, the buyer shall not be liable for more than the fair value to him of the goods so received. Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the buyer may accept the goods included in the contract and reject the rest. If the buyer accepts the whole of the goods so delivered he must pay for them at the contract rate, Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a different description not included in the % Gee p:1442, Black's Law Dictionary, Tenth Edition. 101pk VENDOR CHAPTER LY aL aga TIOns OF v : which are in accordance win, ods » accept tre BO% : if the subject matter |, contract, the hayer 4 un ghe contract and reject (Be rest saragraphs, two Pi ¢ goods. tm the preceding (0. Hine whole of the Es ny usage of tra, indivisible, the Buyer MAY OO ile are subject to any te. The provision’ che at jealing between the parties. special agreent ait, oF C0! ° red ts LESS Quantity of goods deliver he goods; oF 1, Buyer may reject ¢ _ 2, Buyer may pce is with knowledge that the a ie going 1, a in aie veatratt, the buyer shall pay Ee ead vetore s used or disposed 0! s bit he Re to ler is not going to perform his oe i aa the hae hail not be liable for more than the fair va the goods so received. FalR VALUE , or asset’s potential price, based on; An estimate of a good, service, tial | rational and unbiased assessment of the amount at which it could currently be bought and sold between willing parties.** ‘Sand B entered into a contract of sale of 100 chairs at P100 per chair, “At the date of delivery, S delivered 80 chairs only. In this case, B may reject the 80 chairs. However, if B accepts the chairs with knowledge that S is not going to perform the contract, B shall pay the 80 chairs at P100 per chair. If B has used or disposed of the 80 chairs delivered before he knows that the seller is not going to perform his contract in full, B shall not be liable for more than the fair value to him of the goods so received. Quantity of goods delivered is MORE ae may accept the goods included in the contract and reject the 5 Or 2, Buyer may ae a ee the whole of the goods and pay for them at the 3. If indivisible, the buyer may Teject the whole of the goods, Example: Sand B entered i Atthe date ofdehvery Sdelnerea Tiara 4/100 chairs at P100 per chat chairs and reject the 10 chairs or B may ae el eas se at P100 per chair which is the contract eee the 110 chairs and pay for thet rc ‘1808 B7RS, Black's Law Ditsmary, ‘Tenth fdition, 102 aut gor of an0 pera Y ein snot : he ky ot be lis reject m at? ret for s of Different Description txed with Good: ee e In.accordance Ww! 1, Buyer may accept the goods which ar ‘and reject the rest; or 2. Hindivisible, the buyer may reject the whole of the goods. Example: ‘S and B entered into a contract of sale livered 90 100 per chair, At the date of delivery, S de pieden chairs. in this case, B may accept the 90 plastic chairs a 10 wooden chairs. of 100 plastte chairs only at 7 plastic chairs and 10 ind reject the Example: : s and B entered into a contract of sale of 100 plastic chairs only at p10 per chair. At the date of delivery, S delivered 100 chairs which was vranufactured using plastic and wood materials which cannot be separate raed means itis indivisible, In this case, B may reject the 100 chairs delivered. Art. 1523. Where, in pursuance of a contract of sale, the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether named 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. 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 omits so to do, and the goods are Jost 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. Unless otherwise agreed, where goods are sent by the seller to the buyer under circumstances in which the seller knows or ought to inow that it is usual to insure, the seller must give such notice to the buyer as may fae nee fe fears a during their transit, and, if the 5 Is i panei Bt shall be deemed to be at his risk during Rule: Delivery to the carrier is delivery to the bi i i requlred to endthe goodstothe buyer, ne Sele IS Problem: D is the owner of D Electric Sales, a company engaged in the business of supplyin, ig transforme! n Electric Cooperative, Inc. OM, ae for rural electric cooperatives like M 103 _..,... ______sor THE yeNDOR CHAPTER IY opiscartons Loin al e Atog aiiem OF power she aerehase a 10 Mie " a r ager, R to saive It probl™ essed SITET oneral Mani at within tes coverage | Fa this cea ly the power {Fans Saree “ because the ite, pert es = ¢, wou ares board resolution whic, would stil have er fn the requested transformer. In turn, ° R Pe hase of one 10 MVA of said transformer. T};, cod authorized the aps for the acquisition | A ero his cit sae ee ee ae we and the discussion of terms, j a A her the reading ot Pe name of R atthe end oft instruct re! 9 he end of th ces se pe document under the word jen are - jal. .d to the propos: resolution Was thereafter attache te Pro ormet, Sethe wg the proposal, the h ‘As stated in the p! Jued at Ps,200,000. It was also stipulateg a the Pr : the basic accessories, Wa6 ice should be paid as down paymen therei the pur ; d : and SN SE icine to be paid upon delivery. or handling il inci re for the ac ee customs duties, and incidental expenses wel fc ‘count sa afthe buyer. sq Resolution, on the other hand, stated that the Ww of the said transformer was to be financed through a loan from «» In the National Electrification ‘Administration (NEA). As there was no & immediate action on the loan application, R requested D to deliver the w transformer to them even without the required downpayment. ) of granted the request provided that M, Inc. would pay interest at 24% per te annum. R acquiesced to the condition. On December 17, 1992, the goods: fs tl were shipped to Ozamiz City via W Lines. ‘ t - When nothing was heard from M, Inc. for sometime after the t ee % Ds Marketing Manager, went to Ozamiz City to check on the boo t ar cicasd and cele a very with R who told him that the loan was not t 7 ‘ ; possible to withdraw the shipped items es: tet When no bo See ‘ ponitratned to oud; devant eee after several months, K was! } » dated September 15, 1993, which! j M, Inc. duly received. R replied in writin, that the goo. ere still int . i i ‘warehouse of William Li g that the goods were inthe 4 the correspo: Ss su Subsea Aon delivery reente by areceipt of payment wit! | ntly, demand letters i were sent t aot amount, As; 0M, Inc. di the! Aside from the formal Alemaud veer) 104 [ fATIONS OF THR VENDOR . CHAPTER WV + OBLIG: y sent through ne gh . ccoums were regulatl RA added that several statentents Oe Sper adfeputedd BY Mine. hs the mis By the companty aM veer pla fOr specific sit Sy pmnaty 17 19k D filed A CONT AT ies isin ‘sal eS eefrnnarnce with damages. In responce M4, tne ‘ pore gronnd that there wasn contract otal Wt, is Article 1523 of the Civil Code applicable’ swer: he Civil ‘on the basis of this express agreement, Article 1523 of t code becomes applicabte. It provides: Her Is authorized or Where, in pursuance of @ contract of sale, the sel required to send the goods to the buyer delivery of the goods 10 of Carrier, whether named by the buyer or not, for the purpose 0) er transmission to the buyer Is deemed to be a delivery of the goo ea ne sre buyer, except in the cases provided for In ‘Article 1503, fi = second and third paragraphs, or unless a contrary intent appears. ray thus, the delivery made by Dto W Lines, Inc, as evidenced BY the rm pill of Lading, was deemed to be a delivery to M, Inc. D was authorized to send the power transformer to the buyer pursuant (> their agreement. = a When D sent the item through the carrier, it amounted to a delivery to M, n Inc. By Furthermore, in the case of Behn, Meyer & Co. (Ltd.) v. Yangco, it ery was pointed out that a specification in a contract relative to the payment ent of freight can be taken to indicate the intention of the parties with regard hy to the place of delivery. So that, if the buyer is to pay the freight, as in em this case, it is reasonable to suppose that the subject of the sale is transferred to the buyer at the point of shipment. In other words, the er title to the goods transfers to the buyer upon shipment or delivery to mag the carrier. st Of course, Article 1523 provides a mere presumption and in tes order to overcome said presumption, M, Inc. should have presented evidence to the contrary. The burden of proof was shifted to M, Inc. who « had to show that the rule under Article 1523 was not applicable. In this te regard, however, M, Inc. failed.3? ao : eres Pee Feo a bound to deliver the thing sold, if the i e price, or if no period for the pa ¢ _ been fixed in the contract. Pe payment has e o Rationale; 6 Contract of sale is a reciprocal contract. o d pues eee ec $ 2 Virgilio S. David Ws, Misamis Occidental I! Blectric Cooperative, Inc. G.R. No, 194785, July 14, 2012. 105ws OF THE vENDOR CHAPTER IV OBLIGATIONS vomde ipthe ports stipulated on diffe, os ; . re deliver on the," the on is jeu aeort , The vendor ee in a periods for delivery ond pereyment ay price at he time ike in & fared upon se one erat One term won 7 “east id sell ter of goods is deemed to be an unp2! er with, : | art 1825, The se f : peer’ the meaning of tis THEY. price has not Beet paid or tendered; ; ss 1) When the whole of he DT ther negotiable Instrument Nas ey, {2) When a bill of emtional payment and the condition on a c received wed has been broken by reason ee Lae or of si insta {the buyer, or ott i : ment, the insolveney ota vgn “seller” includes an agent y - In Articles 1525 to f lading has been indorsed, OF a Consigno, a the selier to whom the aid ding rectly responsible for the price a caren person who ’ osition of a seller. : ether person who Is in the P “ mn inst Who is an unpaid seller? hermit s Mrole of the price has not been paid oF ; 1, When the whole OF th Peer other negotiable instrument has bee asa ill of exchange it has eed as conditional payment, and the condition on which it wa; received has been broken by reason of the dishonor of the instrumen, oie the insolvency of the buyer, or otherwise. Bill of exchange, meaning the ‘An unconditional written order by one person to another, signed by se the maker, requiring the person addressed to pay to a third party a specified yi { sum on demand or ata fixed or ascertainable future time.33 Negotiable instrument, meaning Awritten instrument that is signed by the maker or drawer, includes an unconditional promise or order to pay a specified sum of money, is payable on demand or at a definite time, and is payable to order or bearer.34 Dishonor, meaning To rel | Pee eAe fuse to accept or pay (a negotiable instrument) whe good th eee Bet soormat tw Diclonay, Tenth Edition, see p56 Blacks Law Dictionary, TenthDs APTER IV ~ OBLIGATIONS OF THE VENDO! cH Bt inthe ‘aon ay debts as they fall due oF i wo Tre cao of MIM yg py dete a mature" sual course of husit a jace of another; Agee nil eon who is authorized to act for or In pl representative” meaning . bythe ca te orament ing owledging the receipt of goods by foal a Le . pipper's agent and the Contract for the transportation of those ued speament that indicates the receipt of goods for shipment an dtr goods. by aperson engaged in the business of transporting OF forwarding 8° |, meaning Te sign (a negotiable instrument), usually 0} accept responsibility for paying 2% obligation m instrument or to make the instrument payable to someon’ payee? Consignor, meaning The person named ina bill as the person received for shipment? n the back, either to emorialized by the e other than the from whom goods have been notwithstanding that ions of this Title, the unpaid ‘Art. 1526. Subject to the provisi the ownership in the goods may have passed to the buyer, seller of goods, as such, has: (1) Alien on the goods or right to retain them for the price while he is in possession of them; (2) Incase of the insolvency of the buyer, a right of stopping the goods in transitu after he has parted with the possession of them; (3) Aright of resale as limited by this Title; (4) Aright to rescind the sale as likewise limited by this Title. Where the ownership in the goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies a right of d coextensive with his rights of lien withholding delivery similar to an and stoppage in transitu where the ownership has passed to the buyer. Tenth Edition. » see p916, Black's Law Dictionas renth Edition. ims cea ins der i Bac nn Toth Bl 9373, Blacks Law Dictionary, Tenth Elion 107 meeHart HE VENDOR CHAPTER IV opisca tions or THE VE 9t cereitor nas. 10, another's Prope, eer Lien, meaning interest that ® js satisfied? % , wa vast 8 ae or tor duty ear it secures ~ ng 8 : atl! Remedies of an unpaid seller # oe Tren: 7 2 Poor CONDI the goods. in transit; a ; 2. Right of resale: 2 : @) 4. Right to rescind. , @ RY LIEN session of the encumbe, “a Tien allowing the creditor to keep pos: Te, is Hi property until the debt is satisfied. $ ice the provisions of this Title, the unpaid seller A Art, 1527. Subject to the Prove entitled to retain possession whe ‘who is in possession © vice in the following case, until ent or tender of the pric ‘aSes “i ‘4. them pay « iy: a ta) Where the goods have been sold without any stipulation asj, at credit; 7 (2) Where the goods have been sold on credit, but the term of creq ont has expired; :) Where the buyer becomes insolvent. Art. & The seller may exercise his right of lien notwithstanding that h ida 8 4s in possession of the goods as agent or bailee for the. buyer. ist When unpaid seller has possessory lien? are 1 Where the goods have been sold without any stipulation as to credit; reg 2. Where the goods have been sold on credit, but the-term of credit ha the 3, Where the buyer becomes insalvent. wi 1 . 1528, Where an unpaid seller has made part delivery of the goods, 9 ees ostaeed his right of lien on the remainder, unless such pat: = a fe been made under such circumstances as to show an intent Sin e the lien or right of retention, Se cio General Rule; The unpaid seller may e3 AI xe i ie has not been delivered, y exercise his right of lien on the remainder th! a ‘4 00 1063, Black's s se 1066, lcs a Teh Baton, Dlcuonary, Tenth Eaton,diy dite Z004: pe nies poTHE VENDOR CHAPTER IV ~ OBLIGATIONS OF : a8 to Breet Ne an part delivery: hax been made under sack cireurnstances aw apy inetienst CO waive the lien ot right of retention. thereon: goods toses bis Hen tne in he delivers the goods to carrier oF other nnael se of transmission to the buyer without thereof ownership in the goods oF the right to the pos rear the (2) Wher the buyer oF his agent lawfully obtains possess sho rt 9829. The unpaid seller of thereon, does not lose for the ods; waiver thereof. ent or decree Her of goods, that he has o! having a lien go @) By btained judgm ‘The unpaid sel his lien by reason only price of the goods. the purpose other bailee for ship in the joses his lien a carrier or the ownel when unpaid seller | the goods to ithout reserving 1, When he delivers ‘of transmission to the buyer wi sor the right to the possession thereof; 2. When the buyer or his agent lawfully obtains po’ 3. By waiver thereof. ssession of the goods; Art. 1530. Subject to the provisions of this Title, when the buyer of goods is or becomes insolvent, the unpaid seller who has parted with the eSfon of the goods has the right of stopping them in transitu, that is to say, he may resume possession of the goods at any time while they are in transit, and he will then become entitled to the same rights in regard to the goods as he would have had if he had never parted with the possession. When right of stoppage in transit available? 1 The unpaid seller has parted with the possession o| 2. The buyer of goods is or becomes insolvent. f the goods; and insolvent, meaning Having liabilities that exceed the value of assets.4? Art. 1531. Goods are in transit within the meaning of the preceding article: (1) From the time when the; y are delivered to a carrier b: land, a eral pier bailee for the purpose of eaaaaiesio te the bayer, uyer, or his agent in that behalf, takes delivery of them from such carrier or other bailee; 4 00 9.916, Black's Law Dictionary, Tenth Edition, 109HA CHAPTER IV ~ OBLIGATIONS OF THE VENDOR y TER (2) Mt the goods are rejected by the buyer, and the carrier or Oth, dallce continues in possession of them, even If the seller yo ( . vigrt: 1532 refused to receive them back. Sogo gransitu e Goods are no longer in transit within the meaning of y, potice of! preceding articie: Rhea ae (4) if the buyer, or his agent in that behalf, obtains delivery of gy, possessi¢ ‘goods before their arrival at the appointed destination; te be (2) If after the arrival of the goods at the appointed destination, y, | circume® carrier or other bailee acknowledges to the buyer or hisagenty,y | -¥ diligen he holds the goods on his behalf and continues in possession 4 | them as bailee for the buyer or his agent; and it is immaterial ¢,, | further destination for the goods may have been indicated by th, ' eae buyer; te {3) If the carrier or other bailee wrongfully refuses to deliver th, | 5 Legare goods to the buyer or his agent in that behalf. \ : oe eri If the goods are delivered to a ship, freight train, truck, o, is. selivers airplane chartered by the buyer, it is a question depending on the ‘surret circumstances of the particular case, whether they are in the possession 063 ow th of the carrier as such or as agent of the buyer. iL By If part delivery of the goods has been made to the buyer, or his 2 By: agent in that behalf, the remainder of the goods may be stopped in : transitu, unless such part delivery has been under such circumstances cas whe as to show an agreement with the buyer to give up possession of the ETO whole of the goods. 2 to When goods are considered “in transit”? . Princi 1. From the time when they are delivered to a carrier by land, water, or air, ‘ ss or other bailee for the purpose of transmission to the buyer, until the “he pent’ buyer, or his agent in that behalf, takes delivery of them from such carrier = or other bailee; and a4 2.{f the goods are rejected by the buyer, and the carrier or other bailee are continues in possession of them, even if the seller has refused to receive ete them back. price When goods are no longer “in transit”? nde 1. If the buyer, or his agent in that behalf, obtains delivery of the goods any | before their arrival at the appointed destination; ay 2, If, after the arrival of the goods at the appointed destination, the carriet or other bailee acknowledges to the buyer or his agent that he holds the goods on his behalf and continues in possession of them as bailee for the buyer or his agent; and it is immaterial that further destination for the goods may have been indicated by the buyer; and 7 3. If the carrier or other bailee wrongfully refuses to deliver the goods the buyer or his agent in that behalf. fami acqu inte But 110re I te ie he i y diligence, * ‘When notice of stoppag' NDOR HAPTER IV ~ OBLIGATIONS OF T HE VEI may exercise jer svesnton 01 actial po: 32. The unpabt sell jer or other bi by obtaining cjaim to the cart oot ee Mich novice may be given either 10 the person fe eee ton ofthe goods or to his principal, In the fat e 2 {be given at such time and w ae cipal, by the exercise of reason delivery to the buyer c in transitu is BI fthe goods, the sel however, 7 site tebe) seller to the he must redeliver the lier. The expenses of a negotiable the carrier stified in is first e a Oe otst ven by the carrier, or other bailee In possession o er sor according to the direction’ of, Bren delivery must be borne by the seller. If, Jocument of title representing the goods has been issued DY ‘other baile, he shall not be obliged to deliver or ju fier unless such document delivering the goods to the sel sarrendered for cancellation. How the right 1. By obtaining 2. By giving notice of his claim to be exercised? e goods; or rrier or other bailee. t of stoppage in transitu actual possession of th the cat ‘To whom notice is given «to the person in actual possession of the goods; or 2.Tohis principal. Principal, meaning act on his or her behalf as an Someone wht agent. Art, 1533. Where th expressly reserves default, or where the buyer price for an unreasonable time, having stopped the goods in tra thereafter be liable to the original any profit made by such resale, 0 authorizes another to ble nature, or where the seller ‘ike right of resale in case the buyer should make hhas been in default in the payment of the ‘an unpaid seller having a right oflien or nsitu may resell the goods. He shall not I buyer upon the contract of sale or for but may recover from the buyer damages for any loss occasioned by the breach of the contract of sale. Where a resale is made, as authorized in this article, the buyer soquires acre title as against the original buyer. it is not essential to the validity of resale tha! e it notice of Tete to resell the goods be given by the seller to the original eaeer ut where the right to resell is not’ based on the perishable nature of the ‘ goods or upon an express provision of the contract of sale, the giving ae e goods are of perishal © see p.1384, Black’s Law Dictionary, Tenth Edition. 111me gations or THE yeNpor o CHAPTER IV i inv nein any issue involving auch notice sate default for an unreasonay to give hat * he tice of question whether UT Tas made ey ofa resale that not thetin, aaa ret povessent od Ne even by oe salter eo te ort, a cand place of such resale ercise reasonable Care and Sudgmen., payer. pound to wirement may make a re, oe The The sellers this red! ‘Sale making a resale an aie ‘je, He cannot, however, directly 2, The tenner by public oF I" us fedirectty buy the 2004 might of Restle oc havinga right of lien or having stopped the goods , nee a eae ‘Goods are of perishable. nar! ale in case the buyer 3 The seller expressly resenves the right of res Person, Ne s rake di een fault in the payment of the price for a ; ur unreasonable time. or the right of resale applies only if the title to goods has alreaa, Art.1 passed to the buyer. Otherwise, the goods cannot be resold. of lie disp Profit or Loss in Resale _ selle } The seller shall not be liable to the | The seller may recover from the goor original buyer for any profit made | buyer damages for any loss bah : 1y loss} righ resale occasioned by the breach of the, has contract of sale \ tot Art. 1534, An unpaid seller ha i fi ior goods in transitu, may Sanat right of lien or having stopped the ownership in the g bas | e transfer of title and resume the Ger in case the buyer et oo aa Expreccly reserved the right to do so s etal in the payment ofthe price for an bore the river has beenis “7 70) F4) tne thereafter be liable to the bayae ui eens ene ; aon from the buyer damages for pon the contract of sale, but Ex eta contrac, any loss occasioned by the ~ an unpaid fete nn an title shall not be held to hay: tome other overt he has manifested b been rescinded by At aerate {actan intention torescind Itisne to the buyer or by ve pare Rotice to ae bupuunicated tothe buyer tan Necessary that such Al any issue involving Yer of the intention to re ut the giving or failure 'escind shall be relevatl! T the buyer had been it eea. PBAPTER IY OBLIGATIONS OFT ip VENDOR satons wa" defanit (oF ro unreosonable time before the right of resci asserted. ds having stopped the oo lien oF have ownership if He ind resume id seller having ind the trans! served the right to do so: or in default in the payment of the price for ap the right of fer of title and Right tO resell An unipa gn tvansita, may Fes goods: 4, The sel 2. The buyer unreasonable time, Bffect of exercise of the right to rescind ‘The seller shall not thereafter be liable aut may recover from the buyer dama| h of contract. ler expressly Fe has been il tothe buyer upon the contract 7 sioned by ges for any loss occa’ of sale, b the brea! ded by an sId to have been rescin other The transfer of title shall not be hel unpaid selfer until he has manifested by notice to the buyer or by some overt act an intention to rescind. f this Title, the unpaid seller's right cted by any sale, or other provisions of e made, unless the ast. 1535. Subjectto the of lien or stoppage in transitu is not affe disposition of the goods which the buyer may hav title has been issued for seller has assented thereto. If, bowever, a negotiable document of right of stoppage in transitu shall defeat the uch document no seller's lien or tof any purchaser for value in good faith to whom s has been negotiated, whether such negotiation be prior or subsequent to the notification to the carrier, or other bailee who issued such document, of the seller's claim to a lien or right of stoppage in transitu. itu is not affected General Rule: r stoppage in transit have made. The unpaid seller's right of lien o1 by any sale, or other disposition of the goods which the buyer may Exception: The seller has assented or given his consent thereto. ot bound to deliver the thing sold in case the Art. 1536, The vendor Is n ight to make use of the term as provided in vendee should lose the ri Article 1198, The vendor is NOT bound to deliv. er the thin, vendee has lost the right to make use of the term ee 113CHAPTER IV © OBE GATIONS 4. When after t majess he gives 4 RY insolvent, wales MPR got huritish 3. When by hisow 37. art, 15: 3 and accessories All the fruits the contract was perfected. ACCES: ‘Accessions Tt signifies all of those things which are produced by the thing which is the object of the obligation as well as all of those which are naturally or artificially attached thereto. ample: “A partner's share in the profit ina contract of partnership.” “Earphone of a cell phone.” "Mouse pad of a computer.” 0 aptigation bA® ee ne obltR saranty 2, When the vendee does iret fats, he has IMPAITE fortuitous ev jishment. arid their establishment Te ately ai any U) dor is bound to The vender js inthe condition in ntact. perfection of the ont 11 pertain to the yendee from SIONS vs. ACCESSORIES. “Acces! sor THE VE cteds vendee becom, for the debts: ‘which he has promise, yaranties OF securities af, en they disappe,, ly satisfactory; s equal ition of which th, a in considera! ver the thing sold and jt, deli which they. Were UPON th, the day on whic, sories: ga It signifies all of those things whit have for their object — the; embellishment, use or preservation of another thing which is more important and to which they are not | incorporated or attached. In other words, it includes all of those things which are necessary or convenient | for the perfection of another thing, such as the equipment of a factory thespare parts and tools ofa machine | similar nature.+ Note: Art. 1538, In case of loss, before its delive ry, the rules i vendor being considered the debtor. tessa ice Manresa, $4 Bd, Ble 1, pp. 108-110, SERENE sc: The fruits (natural, indust ‘ L rial hay on which the contact wos vee civil) pertain to the buyer from the ‘ di aration or improvement of the thing cle 1189 shall be observed, the 114 oe- OBLIGATIONS oF THE vENDOR RW the obligation shall be when it y that its cnarTel tof the debtor (Vendor), qifthe thing is lost without the faull shall be extinguished: 2. ir the thing is Tost through obliged to pay damages: perishes, oF 88S ‘aut of co existence is amknown ar it C 3. When the thing deteriorates f irment is to be borne yy the ai Mr deteriorates through the fault of the debtor (Vendor) ¢ (vendee) may choose ‘between rescission ‘of the obligation fulfillment, with indemnity for damages in either case; hall 5, If the thing is improved by its nature; oF by time, the improvement sha! inure to the benefit of the creditor (Vendee); and 6. If itis improved at the expense of the debtor (Vendor), he shall have no other right than that granted to the usufructuary- e debtor (vendor), be thing Is fost h the fantlt of th in such a W2 is understood that the mmerce, or disappears fi annot be recovered: the debtor (V' without the fault of aditor (Vendee)i ore i the creditor endor), the Usufructuary, meaning , “ Aperson who has the right to the benefits of another's property- includes that of ing sold i contract, The obligation to deliver the thi e control of the vendee all that is mentioned inthe with the following rules: real estate should be made with a statement of its rtain price for a unit of measure OF number, the latter should .d to deliver to the vendee, if the ed in the contract; but, should this choose between a proportional nd the rescission of the contract, provided that, in the area be not less than one-tenth of that n the area is the same, if any e quality specified in the contract. hall only take place at the will of the g sold exceeds one-tenth of Art. 1539. placing in th in conformity If the sale of area, at the rate of ace! yendor shall be oblige demand it, all that may have been stat be not possible, reduction of the price a in the latter case, the lack stated. even whe! The same shall be done, part of the immovable is not of th The rescission, in this case, s! vendee, when the inferior value of the thin; the price agreed upon. Nevertheless, if the vendee would not ha’ , ve bough immovable had he known of its smaller area of inferior quality. na may rescind the sale. Example; S sold to B a parcel of land with an area of 100 square meters at an are meter. However, upon conduct of a agreed selling price of P1,000 per squ survey, it was found out that the actual land area is 85 square meters. In thi . In this ‘see p.1778, Black’s Law Dictionary, Tenth Edition. 115LAP TER AY ouuiga rons oF THE yENDOK J Thus, 1, § gen is more care 4/10 (10%, ose, the tock mn ares is 15% wht eters? Car alse ask y, esi I OT ag MB SUT Ty 596 Wich si Wino if ame acted Or phat the La ne ask for dreds in, escassinar ofthe cantnact? IR ROT TT epatrule, BM int only PAY PS, in, Bhar 1/10 1086). Canseguent ts ay grea 80 CHUN TO oe the land hoa j, Of eset prove based OM BT ould nt ROME " (P1000 x 95 54.) MOT gy rescind Che Sale Kowa of tts smafler areds in gales involving real eo ofpricing agreement: 4 Perermaned by way reference per square meter). oF a lump SY for an immovable the area of whit! where both the area am square meters, etc)” tate, the partles may eto a stated ral contract whic! h may be declare ‘d boundaries are stat ay choose between ty, et wherein the purchase pric, te per unit area (eg.P1,09, fh states a full purchase pric, ‘d based on an estimate o, ted (eg. P1 million for 1,009 Article 1539 and Article 1542 ‘The distinction between Article 1539 an unit of measure or number, the | consideration of the contract with | respect to the vende, is the number | of such units, or, if you wish, the thing purchased as determined by the stipulated number of units. the parties, and the performance confirmation, in fact, of the conside: to enter into the contract,50 thee era Te, © Falco Bsguerta etal ¥ ‘Cebu Wieland Development Common tae GR. Felictano Esguerra et.al. vs, Virginia Trini, 173; * Cetu Wisland Developmen Corporation oe, Wo. 169800 art, 21,2008, ia, GR.No. 173215, May 24.9 24, 2008, "I the sale was made for a price per This difference in consideration between the regulation of the obligation to deliver th acquittance, delivery must be made in accordan: ‘Ong Siao Hua, GR. No, 1 .d Article 1542 was explaineg ‘ To Article 1542 ; But if, on the other hand, the sale was made for a lump sum, the | | consideration of the contract is th object sold, independently of its! | number or measure, the thing as! | determined by the stipulated! boundaries, which has been called| ; in law a determinate object.4® In fine, under Article 1542, what ) | is controlling is the entire land) | included within the boundaries, | | \ regardless of whether the real area should be greater or smaller. than | that recited in the deed.49 | two.cases implies a distinct | | i e object, because, for an) ce with the agreement of | | of the agreement must show the| | No, 169890, March 12, 2007 ence ITE but lim spe », WitCRAPTER LY - OBLIGATIONS OF THE VENDOR In Rudolf Liety, toe. v, Court of Appeals, the Supreme Court held: Arttcte 1839 governs a sule of tmmovable by the unit, that fs, ato stated mate per unit area. tua unit price contract, the statement of area of immovable 1¢ not conclusive and the price may be reduced or increased depending on the area actually delivered, If the vendor delivers less than ‘the aren agreed upon, the vendee may ablige the vendor to deliver all that may be stated in the contract or demand for the proportionate reduction of the purchase price if delivery is not possible. If the vendor delivers more than the area stated in the contract, the vendee has the option to accept only the amount agreed upon or to accept the whole area, provided he pays for the additional area at the contract rate. In some instances, a sale of an immovable may be made for a lump sum and not at a rate per unit, The parties agree on a stated purchase price for an immovable the area of which may be declared based on an estimate or where both the area and boundaries are stated. In the case where the area of the immovable is stated in the contract based on an estimate, the actual area delivered may not measure up exactly with the area stated in the contract. According to Article 1542 of the Civil Code, in the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price although there be a greater or lesser area or number than that stated in the contract. However, the discrepancy must not be substantial. A vendee of land, when sold in gross or with the description “more or less" with reference to its area, does not thereby ipso facto take all risk of quantity in the land. The use of “more or Jess” or similar words in designating quantity covers only a reasonable excess or deficiency. Where both the area and the boundaries of the immovable are declared, the area covered within the boundaries of the immovable prevails over the stated area. In cases of conflict between areas and boundaries, it is the latter which should prevail. What really defines a piece of ground is not the area, calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In a contract of sale of land in a mass, it is well established that the specific boundaries stated in the contract must contro! over any statement with respect to the area contained within its boundaries. It is not of vital consequence that a deed or contract of sale of land should disclose the area with mathematical accuracy. It is sufficient if its extent is objectively indicated with sufficient precision to enable one to identify it. An error as to the superficial area is immaterial. Thus, the obligation of the vendor is to deliver everything within the boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate object.5+ Cebu Winland Development Corporation vs, Ong Siao Hua, G.R, Na. 173215, May 21, 2009, 7poR . oe THE VEN CHAPTER IY anuaGar tons? F rs ower condomintiir, 7 raf ‘ develope or icing IONS from (ont Y orpaisthe own Compe HE gqomntntun anit and condom, g January © eclto sell £0 ycondominium ung, ed Incentlver € offered a 3% 5 down payme;, er a yer of ma mettre PEE Ta i tion, was under construe Hi ( al prices 0 ice is paid 4 sa at promotions a archase Pt 1 provided installments: discount P paid in 24 equal monthly i nt arp. and bougy | a: ind the: balance ‘the offer 0! , fo, 1995, H accepted Hs, 5 and 6, as Well as fou On fanuaty © two. condominium units designated ea ape naat slots desir “gnit as indicated in petitioner's prig park Tae ar a and the pri re meter is P22,378.95 i i H, therefore ‘i issued 24 postdated checks i, balance of the purchase . j list is 155 square: mel for the 2. price 22, 298,655.08 as down payment an of P223,430.70 per check for the the amount price in the total amount of P5,362,385-19 ; Is the sale one made with a statement of its area or at the rate of nit of measure and not for a lump sum.? acertain price for au! "article 1539 provides that "Ifthe sale of real estate should be made with a statement of its area, at the rate ofa certain price for a unit dor shall be obliged to deliver to the of measure or number, the ven vendee...ll that may have been stated in the contract; but, should this be not possible, the vendee may choose between a proportional reduction of the price and the rescission ofthe contract...” Article 1542, on the one hand, provides that “In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be a greater 3 or eo va ‘or number than that stated in the contract.” : . in the case at bar, itis undisputed by the ; parties that the purchas we ie ee properties was computed based on the price ii ., or P22,378. i Te od ana sala ee ariser a 95 per square meter. Clearly, the parties is the applicable Re ee Fi ae id ot ese ee | him under Article 1839, that ig, sae —— to the relief afforded t0 price or the rescission of the contract, ath portional reduction of remedy since he prayed in his Complaint f is option. H chose the forme! for the refund of the amount 0! P2,014,105.50 rej to € Corps presenting the proportional reduction of the price pa! “see Cebus Winland Development Corporation vs, Ong Siao'Haa, GR. No, 173218, May 21, 2000.OBLIGATIO! OF TH! VENDOR dy Re te ik an Sa as Se HAPTER artich isa greater area 40. If in the case of the preceding artic! ; are Eber inthe immovable than that stated In the contract, the Seen thay accept the area Included in the contract and reject ¢ 7 accepts the whole area, he must pay for the same at meters atan agreed conduct ofa survey with an area of 500 square is 650 square fare meter. However, upon th he actual land area Example: "Ssold to Ba parcel of lan ut that th selting price of P1,000 persau by ageodetic engineer, it was found 01 meters. ; In this case, B may accept the 500 square meters and reject the excess 100 (P1,000 x 500). Nevertheless, B com choose to accept Thus, B will pay P500,0¢ the 650 square meters, so that he will pay P650,000 (1,000 x 650). ‘art. 1541. The provisions of the two preceding articles shall apply to judicial sales. What is judicial sale? *\ sale conducted under the authority of a judgment or court order, such as an execution sale.5# imp sum and not at the ‘Art. 1542. In the sale of real estate, made for a lu rate of acertain sum for a unit of measure or num! price, although there be a great increase or decrease of the area or number than that stated in the contract. re immovables ‘The same rule shall be applied when two oF me are sold for a single price; but if, besides mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or number should be designated in the contract, the vendor shall be bound to deliver all that is included within said boundaries, even when it exceeds the area or number specified in the contract; and, should he not be able to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the area or number, unless the contract is resci inded because the vendee does not accede to the failure to deliver what has been stipulated. ber, there shall be no ter or less n area of 500 square meters at an agreed lump sum selling price of P500,000. What ifit was learned that the land hasan actual ‘measurement of 450 square meters? The law provides that there shall be no increase or decrease of the price, although there be a greater or lesser area or number than that stated in the contract. Example: 'S sold to B a parcel of land with ai ee nn $9 gee p.1538, Black's Law Dictionary, Tenth Edition. 119oO ete VEND! CHAPTER I OBLIGATIONS ort tand. On August y- Probie stored lian cit 7 reel of unrest 48, all Italian citizen, a previously waned a Feemett with F, idiniee vent was fOr a Periny 29BE. Renterrd inte a teat oar “Tie Lease Ee Hook possessing ot i's pro s eles 25 yea nt of 210,000. The lea, sah hn e fand ater PA se jay caren ho w rae 3 sold t0 7, ne the same parcel of ne On Nowembet TT 90, The Deed of AbS0 P30. h a for the amount 0} the peed 8 oe set rae of 5 hectares more or less, @ P of thay pooe ref oO ectared the name of B, XXX. of t B owned only 4 hectares, and with zinc ter dscovered that B owned onl tee ae ane mor eave covered BY 12, Oo ae aoa s, . institute , delivered to Z, Inc. rhs 2 eee of Possession against F, T, and S. The for Annulment of nse Wh evident bad faith and malice, B sold to Z, Inc that wi eae area for a fact that he owned only res if land when B knew for sacanag ed to lease one more hectare to F and Tand Ss. wnecti / a an Inc. entitled to the delivery of the entire five hectares or its equivalent? In the case where the area of the immovable is stated in the i i d. may not measure tract based on an estimate, the actual area delivered may ; up eractly with the area stated in the contract. According to Article 1542 of the Civil Code, i tewotving t heen pe for aol oF 28 years. renewable FE However, the discrepancy must not be substantial. A vendee of land, when sold in gross or with the description “more or less" with reference to its area, does not thereby ipso facto take all risk of quantity in the land. The use of "more orless” or similar words in designating quantity covers only a reasonable excess or deficiency, Where both the area and the boundaries of the immovable are the area covered within the boundari t prevails over the stated area laries of the immovable boundaries, it is the latter which mentioned in its description, but hen with more or less certainty, boundari . enclosing the land and indicating ite 4 ‘aries therein laid down, a icati a mass, it is well established ee Ina contract of sale of landit ous Sete SREPFRRER BS BF 3 “ss SB SBS CHAPTER FV: OBLIGATIONS OP THE VENDOR + or contract of sale of land should disclose the area with mathematical accutacy, Itis sufficient ifits extent is objectively indicated with sufficient precision to enable one to identify st, An error as to the superficial area (s immaterial. Thus, the obligation of the vendor ts to deliver everything within the boundaries, inasmuch as it Is the entirety thereof that distinguishes the determinate object. wu The Deed of Absolute Sale shows that the parties agreed on the purchase price on a predetermined area of five hectares within the specified boundaries and not based on a particular rate per area. In accordance with Article 1542, there shall be no reduction in the purchase price even if the area delivered to Z, Inc. is less than that stated in the contract. In the instant case, the area within the boundaries as stated in the contract shall control over the area agreed upon in the contract.54 Note: Pursuant to Article 1542, Civil Code of the Philippines, in the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price although there be a greater or lesser area or number than that stated in the contract. Thus, the obligation of the vendor is to deliver everything within the boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate object. However, this rule admits of an exception. A vendee of land, when sold in gross or with the description "more or less” with reference to its area, does not thereby ipso facto take all risk of quantity in the land. The use of "more or ordeficiency** _ “More or less”, explained. The Court, however, clarified that the rule laid down in Article 1542 is not hard and fast and admits of an exception. It held: A caveat is in order, however. The use of “more or less” or similar words in designating quantity A vendee of land sold in gross or with the description "more or less" wit ae to its area does not thereby ipso facto take all risk of quantity in the id. Numerical data are not of course the sole gauge of unreasonableness of the excess or deficiency in area, Courts must consider a host of other factors, In one case, the Supreme Court found substantial discrepancy in area due to contemporaneous circumstances, Citing change in the physical nature of the property, it was therein established that the excess area at the southern see Rudolf Lietz, Inc, vs. CA, etal., GR. No. 122463, December 19, 2005. ‘Veronica Roble, et.al. vs. Dominador Arbasa and Adelalda Arbasa, G.R. No. 130707, july 31, 2001. 424CHAPTER TV gained why the ta,,. jamaton st Greseashore asits south... reel . : wan a pensct Of Te fale indict ciairned area was deca,’ portion jecd OF the int peancal ceacrptton ie TT on of the ine tne specific boundaries sta, boundary, henes, ass, 4 te. nd in A MASS ment, With respect to 44, nme contac ee any omer SH " € co 3 ” tn the contract mE CT undares. hrase “more OF fess” to mea, area contained WINN onary defines Black's Law plying that both parties assy,,, imately; emplyi substantially: 0" approximate mp gare intended C0 COVer sig, dis ancy: scree and are ordinarily to): risk ofany ordinary wantity; an b ners fovea nacuracies In Te ay aifferences oF difference hele whole number of items transferreqs;' as taking care ine importance compared cles 1539 and 1542 shay rising from Arti Ast. 1543. The actions ars ON in the day of delivery. 7 ths, counter prescribe in sixmon! the ee rescission arising from Articles 1539 and 1542 shay prescribe in 6 months counted from the day of delivery. me thing should have been sold to different vendee;, ri eal be transferred to the person who may have firs taken possession thereof in good faith, ifit should be movable property, Should it be immovable property, the ownership shall belong ty 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. Requisites of DOUBLE SALE 1. Two or more valid contract of sale; 2, Two or more buyers who are at odds over the rightful ownership of the : ere must represent conflicting interests; . Ahey must pertain exactly to the same obje ject; 4. They must be bought from the same seller = ‘Carmen Del Pradovs. Spouses, -Antowio L. Cabalterp and. 2 Leonarda Cabalieto, GR, No. 148225, March 3, 2010 122 CO ~-ofen © thire » elem ‘. Bass fait ins sec tra ‘suoy THE VENDOR ER IV - OBLIGATIONS cH priect] je of double sale NOT APPLICABLE 1 ois ar all of the elements a& Mnentianers above are HOE present Sea: J pe two efferent contracts peate are made by twor dll feren core hem not being the cvwner of the praperty sold: ‘one af the contract of sale 4 forgery: 3. Wher one of the contract OF nd the other fem I the contract of sale is subject (0 4 suspensive co! te an absolute sale. complied with and the other NCE in case of double sale g, Where one 0 which was not RULES OF PREFERE! 4, Movable Property First possessor in good faith 2. immovable Property ‘a. First registrant in good faith; First possessor in good faith and ¢ Person with the oldest title in good faith. to different ng is sold sold where the same thi the same thing is Article 1544 applies vyendees by the same vendor. It does not apply where to different vendees by different vendors.5?” first criterion is priority ority of such entry, the he two priorities, the the common critical yy of one criterion. The ty; there being no pri and, in the absence of t good faith as ‘The law speaks not onl of entry in the registry of prope second is priority of possession; third priority is of the date of title, with element-* presumption that title or ownership passes to the buyer The above-cited provision on double sale the exceptions being: (a) when the second buyer, in good Pas trogisters the sale ahead of the first buyer, and (b) should there be no inscription by either of the two buyers, when the second buyer, in good faith, acquires possession of the property ahead of the first buyer. Unless, the Second buyer satisfies these requirements, title or ownership will not transfer to him to the prejudice of the first buyer. In his commentaries on the Civil Code, an acce| subject, Justice Jose C. Vitug, explains: pted authority on the le is prius tempore, potior jure (first in Jedge by the first buyer of the second sale hts except when the second buyer first owledge gained by The governing princip! time, stronger in right). Know cannot defeat the first buyers’ rig registers in good faith the second sale, Conversely, kn ——— Spouses Vario Ong and Maria Carmelita Ong and Demetrio Verzano vs, Spouses Ergelia Olasiman and Leonardo jasiman Ct No 162045, Mach 28,2006 n Lorenzo Development Corporation ¥s. CA, etal, C.R. No. 124242, January 21, 2008. 123CHAPTER TV | ORLIGATIONS OF THE VENDOR ts his rights even If he ts fy,, tian with bad faith. 18 wy, , ‘Art. 1544, second parry, cd fatth in registering his." the second buyer af th first eale defea! traitor, since anowhedge taints his repistt Pett i aexwenthe. (9 merit the proceed” af that the cevind reulty buyer must act 1 900 of sale” -uted a document e On january 19, 1985, A, B, and C execute: enti, Receipt of faery Payment in favor of R which ts reproduced hereung,,. RECEIPT OF DOWN PAYMENT 21,240,000 - Total amount 50,000 - Down payment 1,190,000 - Balance Received from Miss R, the sum of Fifty Thousand Pesos purcha price of our’ Inherited house and lot, in the total amount of P1,240,9, We bind ourselves to effect the transfer in our names from o, deceased father, the transfer certificate of title immediately upon recein of the down payment above-stated. . ‘On our presentation of the TCT already in your name, we ya immediately execute the deed of absolute sale of said property and Mis, shall immediately pay the balance of the P1,190,000. On January 19, 1985, Q, mother of R, paid the down payment g P50,000. On February 6, 1985, the property originally registered in the name of A,B, and C’s father was transferred in their names. On February 18, 1985, A, B, and C sold the property to Y fa 21,580,000 after the latter has paid P300,000. For this reason, A, B, and canceled and rescinded the contract with R by depositing the dows payment paid by Q in the bank in trust for R. On February 22, 1985, Q filed a complaint for a specific performance against A, B, and C and caused the annotation of a notice of lis pendens. On April 2, 1985, Y caused the annotation of a notice of adverse claim covering the same property with the Registry of Deeds. On April 25, 1985, A, B, and C executed a Deed of Absolute Sal over the subject property in favor of Y, On June 5, 1985, a new title over the subject property was issued in the name of Y. Is there a double sale? Answer: The inevitable conclusion is that on January 19, 1985, * evidenced by the document denominated as Receipt of Down Paymett + pon Romulo A. Coronel, otal. vs. CA, etal. G.R. No. 103577, October 7.1996, 124OBLIGATIONS OF THE VENDOR cnapTER IV subject of the suspensive rtificate title , 6 parties entered into a raat ffect the issuance of new cer February 6, condition that the sellers shall ¢ ‘ from that of their father’s name to their names and that, on 7985, this condition was fulfilled. With the foregoing conclusions, the sale £0 ¥, gave of double sale where Article 1544 of the Civil Code will apply: é ‘ ‘The record of the case shows that the Deed of Absalute Sale date April 25, 1985 as proof of the second contract of sale was registered with the Registry of Deeds giving rise to the issuance of anew certificate of title in the name of ¥ on June 5, 1985. Thus, the second paragraph of Article 1544 shall apply. rise toa casé ‘A,B, and C pointed out that the notice of lis pendens in the case at bar was annotated on the title of the subject property only on February d sale between A, B, and C and Y was 22, 1985, whereas, the secon on February 18, 1985. The idea supposedly perfected prior thereto or conveyed is that at the time Y, the second buyer, bought the property under a clean title, she was unaware of any adverse claim or previous 1 in good faith. sale, for which reason she is a buye! ‘As clearly borne out by the evidence in this case, Y could not have in good faith, registered the sale entered into on February 18, 1985 5, a notice of lis pendens had been because as early as February 22, 198: annotated on the transfer certificate of title in the names of A, B, and C, whereas Y registered the said sale sometime in April, 1985. At the time of registration, therefore, Y knew that the same property had already been previously sold to R, or, at least, she was charged with knowledge that a previous buyer is claiming title to the same property. The Supreme Court had occasions to rule that: (Lavendee in a double sale registers the sale after he has acquired knowledge that there was a previous sale of the same property toa third party ; ° ; i ; ; cight. Thus, the sale of the subject parcel of land between A, B, and R, perfected on February 6, 1985, prior to that between A, B, a : 125goth the coy, hereditary shay, ye 0 yondors exec Probert pre at 8 te 5 pint RAVE girs of bi and the heir, , om " e hel » that 6 per coreh and the aber fave aunt of 10210 et Ap earnest money inthe contract ors ei “ spectiy rs 0 spectively Ui ipcates of rive covert ald be a re oe r ure aye ea ors wool SO tyalanee 0 the aac Prreates of ttle; thy " Gheirinalvidtal ee payment whi to R the certificats, fpheit OP PTE™ he other of the ive of il reas ith res] ect to the heirs, that with a aorm the delivery of the ty, pare in the disputed lots; that R wi, ‘ irs of L upon presentation « ‘om whatever Vien ang disputed lots hay e that the ated deed of sal Dra spi knowledg' as to in spite OF DET TT eged that a simul been sold by I Fi was el d by X in her favor. ony s the hes of L argue that the contract is a contract to sell f the contract is not the titk tract of sale. The real character 0! br oe nut the intention of the parties. They intended to reser: f L pending full payments ‘ownership of the property to Xand the heirs 0: the purchase price. Further, R failed to faithfully fulfill her part of the obligation. Thus, X had the right to sell his properties to C who exercised due diligence in ascertaining ‘ownership of the properties sold to her. 1s the contract of sale between X and the heirs of Land R valid? ew nee have ee into a contract of sale. Not only has the Sera sh proper i Ws passed to the latter upon delivery of the ; si pulation in the contract that states the ownership {s to be reserved in or "retained by the vendor until fl payment of the price." poser et anise ae of the Civil Code, a second buyer of defect in the seller’ title, eer or constructive knowledge of s# soot such defect, cannot be a rue are with the obligate iyer cannot defeat the first buyer's ti int in good faith, Such seco itle. In case-a title is issued to rete nn en, tee Romale A Coronel, tal Y= CA etal. GR No, 103577, October 7, 1998,CHAPTER IV = OBLIGATIONS OF THE VENDOR, second tnyer, the first buyer may seek raconveyanice of the property subject of the sale. Consequently, X could no longer sell the subject properties to G after having sold them fo Re? FIRST IN TIME, STRONGER IN RIGHT ‘The principle of primus tempore, potior jure (first In time, stronger tn right) gains greater significance in case of double sale of immovable property. When the thing sold twice is an immovable, the one who acquires itand first records (tin the Registry of Property, both made in good faith, shail be deemed the owner. Verily, the act of registration must be coupled with faith —~ that ts, the registrant must have no knowledge of the defect or jack of title of his vendor or must not have been aware of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendar.©? Who is a purchaser in good faith? ‘A purchaser in good faith is one who buys property of another without notice that some other person has a right to, or interest in, such property and pays a full and fair price for the same at the time of such purchase, or before he has notice of the claim or interest of some other person in the property. Example: In Abarquez v. Court of Appeals, this Court had the occasion to rule that if a vendee in a double sale registers the sale after he has acquired knowledge of a previous sale, the registration constitutes a registration in bad {faith and does not confer upon him any right. Ifthe registration is done in bad faith, itis as if there is no registration at all, and the buyer who has taken possession first of the property in good faith shall be preferred. In Abarquez, the first sale to the spouses Israel was notarized and registered only after the second vendee, Abarquez, registered their deed of sale with the Registry of Deeds, but the Israels were first in possession. This Court awarded the property to the Israels because registration of the property by Abarquez lacked the element of good faith. In Dichoso v. Roxas, we had the occasion to rule that Article 1544 does not apply to a case where there was a sale to one party of the land itself while the other contract was a mere promise to sell the land or at most an actual assignment of the right to repurchase the same land. Accordingly, there was no double sale of the same land in that case. see Corazon L. Escueta,etal. vs. Rufina Lim, G.R, No. 137162, January 24, 2007, ® San Lorenzo Development Corporation vs. CA, etal., G.R. No. 124242, january 21,2005, San Lorenzo Development Corporation vs. CA, etal., G.R. No, 124242, January 21, 2005. “San Lorenzo Development Corporation vs. CA, etal, G.R. No, 124242, january 21, 2005, 127jand identifieg 2 parcels of lant ab ; wolved here are 2 PATTY of land previons, a civil cases HINT portions of & ld Pon actober 29, 19 5 ye subject Osa Dex, cairn of ownershiD, tah mother, E, on June 2, Sale oxecuted in thelt” favor yl he lots from the late 1; 7 se fureher allege that E an roR3. Rand Cur red fume 20,1958 certain RP who wa, through a Deed 0 .d Z, on the other hand, claim at pe issuance of title, S$ Corp. part as the sole heir of LP, aused Zin 1992. Thus. dectared by the cregedly sold the Tots to SCOVP-aNe | ie pa hus favor, RP ther ssued im the name of S COFP: 8 title, for Lot issued in the name of Z. Beesicand C contend that they aaah the same to them precede question because the transactions conveyit ithe sores titles, Rand ey De cae mt Zeould not be considered as innocen, the a a eae because they had prior notice oj ee andr incle memorandum of encumbrances patel! gees covering the subject lots. S Corp. and Z, for their Suan tt R and C acquired the lots under questionable Seanastancis it appearing that there was no copy of the Deed of Sale, between E and LP, on file with the Office of the Register of Deeds. fs Article 1544 of the Civil Code applicable? Answer: The requisites that must concur for Article 1544 to apply are: a better right to the lots jn {0) The two (or more) sales transactions must constitute valid sales; {b} The two (or more) sales transactions must pertain to exactly the same subject matter; (€) The two (or more) buyers at odds over the rightful ownership of the subject matter must each represent conflicting interests; and (@) The two (or more) buyers at odds over the rightful ownership of the subject matter must each have bought from the very same seller. Obviously, s; ‘ald provisi i tales involved were aaa cots no application in cases where the by just one but tw an — momo ae were sold to $ Corp. and ? Caan coe See ind RP. Hence, Article 1544 Of the Civil Codes Site Sines Corpor ration 79-April23, 2014, ‘Alonso F.Bariquen vy, Roberto 8. Syitante and Ceasar'S. Syitaneey ng: y ng G.R.No. 128