ARTICLE

1423-1430
NATURAL OBLIGATION
Natural Obligations
Art. 1423. Obligations are civil or natural.
Civil obligations give a right of action to
compel their performance. Natural
obligations, not being based on positive law
but on equity and natural law, do not grant
a right of action to enforce their
performance, but after voluntary fulfillment
by the obligor, they authorize the retention
of what has been delivered or rendered by
reason thereof. Some natural obligations
are set forth in the following articles.
Article 1423 gives the distinction between
civil and natural obligations:
(1) Civil obligations are from law, contracts,
quasi-contracts, delicts, and quasi-delicts
(Art. 1157.), while natural obligations are
based not on positive law but on equity and
natural law.
(2) Civil obligations give the courts of justice
a right for the fulfillment of a performance,
while natural obligations do not grant such
right of action to enforce their
performance.
Voluntary fulfillment means that the debtor
complied with the same even if he knew
that he could not have been legally forced
to do so.
Examples:
(a) obligation to pay interest for use of
money, even if not agreed upon in writing.  has prescribed, but the debtor later
(b) duty to support natural or illegitimate
children (even if not recognized voluntarily
or by judicial compulsion and even if there
is a judgment that denies the recognition of
said children).
(c) giving of material and financial
assistance to children upon their marriage.
Art. 1424. When a right to sue upon a civil
obligation has lapsed by extinctive
prescription, the obligor who voluntarily
performs the contract cannot recover what
he has delivered or the value of the service
he has rendered.
Article 1424 provides that if the oblige fails
to perform a cause of action within a time
period set by the law, the obligation is
rendered void. Only then that it cannot be
enforced in courts of justice anymore, and it
becomes an outdated claim.
The order cannot be pursued anymore in a
court, bu under the rule of natural
obligations it is indirectly recovered when
the obligor voluntarily pays the outdated or
stale claim. The payment is still a valid
payment because of the obligor recognizes
his debt. He cannot recover what he paid or
the value of the service he had rendered in
cases of obligation to do.
Example:
Scott owes Johnson a sum of 15,000 pesos
under a written contract. After five years
the debt of Scott dictates for failure of
Johnson to file the necessary action for the
recovery of the claim. If Scott voluntarily
pays Johnson, he cannot recover anymore
what he has paid.
Art. 1425. When without the knowledge or
against the will of the debtor, a third person
pays a debt which the obligor is not legally
bound to pay because the action thereon
voluntarily reimburses the third person, the
obligor cannot recover what he has paid.
Algy owes Bryan Php500,000.00. But the
debt soon prescribes. Later, Cristia, against
the consent of Algy, pay Bryan the said
amount. Algy here does not have to
reimburse Cristia because Algy has not at all
been benefited by the transaction.
However, Algy later voluntarily reimburses
Cristia. May Algy now recover what he has
given to Cristia?Answer: No more. This is
the express provision of the law.

Art. 1426. When a minor between eighteen
and twenty-one years of age who has
entered into a contract without the consent
of the parent or guardian, after the
annulment of the contract voluntarily
returns the whole thing or price received,
notwithstanding the fact the he has not
been benefited thereby, there is no right to
demand the thing or price thus returned.
Restitution by minor after the
annulment of contract.
When a contract is annulled, a minor is not
obliged to make any restitution or
compensation except insofar he has
benefited by the thing or price he received.
However, should he voluntarily return the
thing or price he received even though he
didn’t benefit from it, he cannot recover
what he has returned.
This article applies only if the minor who ha
s entered into a contract without the
consent of his parent or guardian is
between 18 and 21 years of age.
The law considers that at such age, a minor
has already a conscious idea of what is
morally just or unjust.
Anya, a minor 19 years old, sold for P100,00
0.00 her car to Jenny without securing the
consent of her parents. She lost P30,000.00
to a pickpocket although she was able to
deposit the P70,000.00 in a Arts.
bank. If the contract is annulled, Anya is obli
ged to return only P70,000.00. However,
she has the natural obligation to return
P100,000.00. If she voluntarily returns the
whole amount, there is no right to demand
the same amount.
NATURAL OBLIGATIONS
Arts.1426-1427
     ART. 1426. When a minor between
eighteen and twenty-one years of age who
has entered into a contract without the
consent of the parent or guardian, after the
annulment of the contract voluntarily
returns the whole thing or price received,
not with standing the fact that he has not
been benefited thereby, there is no right to
demand the thing or price thus returned.
     ART. 1427 when a minor between
eighteen and twenty-one years of age, who
as entered into a contract without the
consent of the parent or guardian,
voluntarily pays a sum of money or delivers
a fungible thing in fulfillment of the
obligation, there shall be no right to recover
the same form the oblige who has spent or
consumed if in good faith. (1160a).
Obligations Arts 1426-1427
My understanding of the article I read is
that when you are a minor and you enter
into a business or a contract, you must have
the permission of a parent or guardian.
     -Example: I am a minor and I mean a cell
phone or any gadgets for 15,000 and my
requirement to get the items must first be
down to 5,000 pesos. Si Ms. Marquez, is
one of my customers, ms. Marquez of 5,000
pesos to get the items he liked, but his
down payment was what I spent and
reduced by 3,000 pesos without my
parents' permission, and his down payment
was canceled, meaning all I would return
was the 2,000 pesos left over from his 5,000
down payment.
NATURAL OBLIGATIONS
1428-1429
     Note again that this article is applicable
only if the minor is between
18 and 21 years of age.
     ART. 1428. When, after an action to
enforce a civil obligation has failed, the
defendant voluntarily performs the
obligation, he cannot demand the return of
what he has delivered or the payment of
the value of the service he has rendered.
     Performance after action to enforce civil
obligation has failed. for damages if he is Discussion:
guilty of fault or bad faith at the time of
The reason for this is that the heir has a
spending or consumption. Note again that
moral duty to fulfill to clear the name or
this article is applicable only if the minor is
credit of the descendent to which he is
between 18 and 21 years of age
related either by blood or by other filial
     ART. 1428. When, after an action to
relationship.
enforce a civil obligation has failed, the
defendant voluntarily performs the
obligation, he cannot demand the return of
what he has delivered or the payment of ART.1430
the value of the service he has rendered.
When a will is declared void because it has
     This article contemplates a situation
not been executed in accordance with the
where a debtor, who has failed to pay his
formalities required by law, but one of the
obligation, is sued by the creditor and
intestate heirs, after the settlement of the
instead of losing the case, he has won it. If,
debts of the deceased, pays a legacy in
notwithstanding this fact, the debtor
compliance with a clause in the defective
voluntarily performs his obligation, he
will, the payment is effective and
cannot demand the return of what he has
irrevocable.
delivered or the payment of the value of
the service he has rendered. He must be
deemed to have considered it his moral
duty to fulfill his obligation.

1428-1429
     For me, I understood here in the article I
read is to observe, for example there is a
situation where a debtor is not paid on the
right day or time that he told his creditor,
meaning that he did not fulfill his obligation.
, and he can be sued by the person he
owes. and that he should be doing properly.
Their moral duty to fulfill his obligations so
that once they need him, he has someone
to approach, because he has done and he
has given what he promised. For example, I
borrowed from a store and he said that I
would pay him in one day, so the day I
promised them and it was fulfilled, it means
that if I borrow, I can borrow again.

ART.1429

When a testate or intestate heir voluntarily

pays a debt of the decedent exceeding the
value of the property which he received by
will or by the law from the estate of the
deceased, the pyment is valid and cannot
be rescinded by the payer. (n)
 Part I
SALES
(Title VI, Arts. 1458-1637)
INTRODUCTION
Governing law. The provisions of the Code
of Commerce relating to sales have been
repealed by the Civil Code. (Art.* 2270[2].)
Today, sales are governed by the provisions
of the Civil Code on the subject. (Book IV,
Title VI, Arts. 1458-1637.) The distinction
between the so-called civil sales and
commercial sales is eliminated.
The provisions of the Civil Code on
Obligations (Title I, Arts. 1156-1304.) and
Contracts (Title II, Arts. 1305-1422.) are
applicable to the contract of sale, but
Articles 1458 to 1637 are special rules
which are peculiar to sales alone
Sources of our law on sales.
The Philippine law on sales, as it exists
today, is an admixture of civil law and
common law principles. According to the
Code Commission: “A majority of the
provisions of the Uniform Sales Law which
is in force in 31 States and Territories of the
American Union have been adopted in the
Civil Code with modifications to suit the
principles of Philippine Law.” (Report of the
Code Commission, p. 60.)
In incorporating some provisions of the
Uniform Sales Act of the United States, the
Commission states:
“This incorporation of a goodly number of
American rules on sale of goods has been
prompted by these reasons:
(1) The present [old] Code does not solve
questions arising from certain present-day
business practices. Among them are: the
sale of “future goods” (Art. 1482.); sale of
goods by description or by sample (Art.
1501.); when goods are delivered “on sale
or return” (Art. 1522.); sale of goods by
negotiation or transfer of a document of
title (Arts. 1527 to 1540.); and the rights of
the unpaid seller of goods. (Arts. 1545 to
1555.)1
(2) The present Code fails to regulate many
incidents and aspects of delivery and
acceptance of goods, of warranty of title
and against hidden defects, and of payment
of the price.
(3) It is probable that a considerable portion
of the foreign trade of the Philippines will
continue for many years with the United
States. In order to lessen misunderstanding
between the merchants on both sides of
the Pacific, their transactions should, as far
as possible, be governed by the same rules.
This desirable condition will not only
facilitate trade but will also perpetuate
sentiments of esteem and goodwill
between the two peoples. It is but a truism
to say that fair and mutually beneficial
trade incalculably enhances international
friendship.” (Ibid., pp. 60-61.)
(2) In addition: “The Title on ‘Sales’ has
been enriched by the addition of new
provisions based on the opinions of
commentators (Arts. 1479, 1480, 1481,
1485, 1490, 1491, 1497, 1498, 1512, 1516,
1558, 1561, 1569, 1570, 1571.2 ) and on
judicial decisions (Arts. 1486, 1487.3 ) and
of new rules adopted with modifications to
suit the philosophy and framework of
Philippine Law, from the Uniform Sales Act
of the United States, Arts. 1482 to 1484,
1494, 1496, 1501, 1503, 1514, 1522 to
1526, 1527 to 1540, 1541 to 1543, 1545 to
1555, 1565, 1566, 1567, 1582 to 1585, 1602
to 1608, 1614 to 1617, 1618 to 1619, 16574
x x x.” Many of the original articles were
also amended for clarification or
improvement.” (Ibid., p. 141.)
Article 1458
By the contract of deal one of the
contracting parties obligates himself to
exchange the possession and to convey a
determinate thing, and the other to pay
therefore a cost certain in cash or its
identical.
Characteristics of Contract of Sale
Consensual- the contract has been
approved by a consent.
Bilateral- both parties have obligations to
each other, the seller,to deliver; and the
buyer, to pay the price.
Onerous- one party does his obligation and
expect the other party to do the obligation
in return.
Commutative- the thing being sold has the
same value of the price that the buyer will
pay.
Principal- the validity of contract is not
dependable to another contract.
Nominate- the Civil Code gave a special
title for this contract, which is Sales.
Essensial Requisite of Contract of Sale
Consent- the agreement/ deal between the
two parties, particularly with the
commodity and its price.
Object- the thing to be sold by the seller
and purchase by the buyer.
Cause or Consideration- the equivalent of
price in terms of money.
Kinds of Contract of Sale
Absolute Sale- not into any conditions, the
transfer of ownership has done after the
thing is delivered.
Conditional Sale- the transfer of ownership
has done after accomplishing all the
conditions.
Article 1459
states that the protest of the contract
of deal must be licit or legal. Unlawful
things are in this manner things that are
illegal or unlawful. Things can be unlawful
"in itself" or "by chance"
Requisite for the object of the Contract of
Sales
The object in the contract of sale
should be determinate and licit or lawful. It
should be legal and the ownership is
transferable.
The article 1459 of the Philippine Civil
Code states that the object of the Contract
of sale should be licit or lawful. Therefore,
Illicit or unlawful things are illegal.
Illicit things may be "in itself" or "by
chance".
Illicit thing in itself are objects that has
permanently / naturally against the law.
Illicit things by chance are objects under the
prohibition or ordered by the law.
Right to transfer ownership
A person could only transfer
ownership if he owns the object he's been
selling, or the seller should have the
consent of the real owner to sell the object.
The transfer of ownership is done by the
time that object has been delivered.
Article 1460
A thing is determinate when it is
especially assigned or physically isolated
from all others of the same class.
Determinate Thing
A thing is determinate or particular
when it is particular from all others of the
same course.The object in the contract
must be determinate or capable of being
determinate , in order for the both parties
not to come up with another agreement.
ART. 1461. Things having a potential existence
may be the object of the contract of sale. The
efficacy of the sale of a mere hope or
expectancy is deemed subject to the condition
that the thing will come into existence. The
sale of a vain hope or expectancy is void.
Sale of things having potential existence-
Even a future thing (Arts. 1461, par. 1;
1347, par. 1.) not existing at the time the
contract is entered into may be the object
of
sale provided it has a potential or possible
existence, that is, it is
reasonably certain to come into existence
as the natural increment
or usual incident of something in existence
already belonging to
the seller, and the title will vest in the buyer
the moment the thing
comes into existence.
Sale of a mere hope or expectancy- The
efficacy of the sale of a mere hope or
expectancy is deemed
subject to the condition that the thing
contemplated or expected
will come into existence.
Sale of thing expected and sale of hope
itself distinguished- Emptio rei speratae
(sale of thing expected) is the sale of a thing
not yet in existence subject to the condition
that the thing will exist
and on failure of the condition, the contract
becomes ineffective
and hence, the buyer has no obligation to
pay the price. On the
other hand, emptio spei is the sale of the
hope itself that the thing
will come into existence, where it is agreed
that the buyer will pay
the price even if the thing does not
eventually exist.
ART. 1462. The goods which form the
subject of a
contract of sale may be either existing
goods, owned
or possessed by the seller, or goods to be
manufactured, raised, or acquired by the
seller after the perfection of the contract
of sale, in this Title called “future goods.”
There may be a contract of sale of goods,
whose
acquisition by the seller depends upon a
contingency
which may or may not happen.
Goods which form the subject of a contract
of sale may be either:
(1) Existing goods or goods owned or
possessed by the seller;
or (2) Future goods or goods to be
manufactured (like the sale of
milk bottles to be manufactured with the
name of the buyer
pressed in the glass), raised (like the sale of
the future harvest of palay from a ricefield),
or acquired (like the sale of a definite parcel
of land the seller expects to buy).8 (Art.
1460.)
Future goods as object of sale- A sale of
future goods, even though the contract is in
the form
of a present sale, is valid only as an
executory contract to be fulfilled by the
acquisition and delivery of the goods
specified.
ART. 1463. The sole owner of a thing may
sell an undivided interest therein. (n)
Sale of undivided interest in a thing- The
sole owner of a thing may sell the entire
thing; or only a specific portion thereof; or
an undivided interest therein and such
interest may be designated as an aliquot
part of the whole.
Article: 1464. SALE OF AN UNDIVIDED
SHARE OF A SPECIFIC MASS 
FUNGIBLE GOODS
-refer to interchangeable goods such as
grain, oil, etc. That allow once to be
replaced by another without loss of value. 
EFECT SALE
The owner of a mass of goods may sell only
an undivided share there of provided the
mass is specific or capable of being made
determinate. 
If the quantity i.e.. Number, weight or
measure of the mass is MORE THAN the
quantity sold the parties shall become co-
owners of the mass.
If the quantity of the mass is LESS THAN the
quantity sold, the buyer becomes the
owner of the whole mass, with the seller
being bound to make good the deficiency
from goods of the same kind and quality,
unless a contrary intent appears.
RISK OF LOSS
If the buyer becomes co-owner , with the
seller, or other owners of the remainder of
the mass. It follows that the whole mass is
at risk of all the parties interested in it.
SUBJECT MATTER
The subject matter is an incorporeal or
intangible right.
Article: 1465. SALE OF THING SUBJECT TO A
RESOLUTORY CONDITION 
-A resolutory condition is an uncertain
event upon the happening of which the
obligation (or right) subject to it is
extinguished.
-If the resolutory condition attaching to the
object, of the contact, which object may
include things as well as rights should
happen, then the vendor cannot transfer
the ownership of what the sold since there
is no object.
ART. 1466. In construing a contract
containing provisions characteristic of both
the contract of sale and of the contract of
agency to sell, the essential clauses of the
whole instrument shall be considered.
Sale vs. Agency  of a certain price or compensation.
SALE The buyer pays for the price of the
goods/property purchased The buyer
becomes the owner of the goods/property
purchased Buyer cannot return the
goods/property when the sale is defective
The seller warrants the goods/property
sold. The seller has full freedom to enter
into any terms or conditions on the contract
of sale.
AGENCY The agent does not pay for the
price. He merely accounts for the proceeds
of the sale. The agent does not become the
owner of the goods/property delivered to
him for sale. The agent returns the
goods/property if he was not able to sell
the same The agent does not make any
warranty as long as he acts within his
authority and in the name of the principal
The agent must follow the instructions of
the principal
Example:
Sale- the buyer receives the goods as
owner.
Agency- the agent receives the goods as the
goods of the principal who retains his
ownership over them and has the right to
fix the price and the terms of the sale and
receive the proceeds less the agent’s
commission upon the sales made.
ART. 1467. A contract for the delivery at a
certain price of an article which the vendor
in the ordinary course of his business
manufactures or procures for the general
market, whether the same is on hand at
the time or not, is a contract of sale, but if
the goods are to be manufactured specially
for the customer and upon his special
order, and not for the general market, it is
a contract for a piece of work.
Sale distinguished from contract for a piece
of work.
By the contract for a piece of work the
contractor binds himself to execute a piece
of work for the employer, in consideration
The distinction between a contract of sale
and one for work, labor or materials or for a
piece of work is tested by the inquiry
whether the thing transferred is one not in
existence and which never would have
existed but for the order of the party
desiring to acquire it, or a thing which
would have existed and been the subject of
sale to some other person, even if the order
had not been given.
Example:
Contract for a Piece of Work- The thing
transferred is one not in existence and w/c
never would have existed but for the order
of the party desiring to acquire it.
Contract of Sale- The thing transferred is
one which would have existed and would
have been the subject of sale to some other
person, even if the order had not been
given.
Article 1468
If the consideration of the contract consists
partly in money, and partly in another thing,
the
transaction shall be characterized by the
manifest intension of the parties. If such
intention does not clearly appear, it shall be
considered a barter if the value of he thing
given as a part of the consideration exceeds
the amount of the money or its equivalent;
otherwise, it is a sale. (1446a)
I. Consideration
a.) Intention
I.I)Sale
     a.) S sold to B a watch worth 50k, B’s old
watch worth 30k. Cash of 2k
(I.II) Barter
      a.) If the thing is more valuable than
money.
b.) No intention
(II.) Sale distinguished from barter.
(II.I)The distinction described above is not
always sufficient to distinguish one from the
other. As a result, the rule in Article 1468
applies in cases where the thing given in
exchange consists partly of money and
partly of something else.
a.) In such situations, the parties' manifest
intention is crucial in deciding if the
transaction is a barter or a deal, and this
intention can be determined by considering
the following factors.
(Article 1371.) The parties'
contemporaneous and subsequent actions.
b.) If this purpose cannot be determined,
the article's final sentence applies. If, on the
other hand, the intention is for the contract
to be a sale, the intention must be pursued
even if the value of the item given as a part
consideration is greater than the sum of
money given.
(II.II.)The only distinction between the two
contracts is in the factor of “price definite in
money or its equivalent,” which is present
in selling but absent in barter. (See 1641,
for example.)
a) S, a sugar miller, and B, a whisky maker
and dealer, agreed that S would supply
sugar worth P20,000.00 to B in exchange
for 100 bottles of whisky.Also worth
P20,000.00 is whisky. This is a barter
agreement.
b) Assume B only had 25 bottles of whisky
at the time of delivery. With S's permission,
S paid the P15,000 difference in cash. In this
case, the contingency
c) Assume that B had no whisky on the
agreed-upon delivery date and instead
paying S P20,000.00 instead of giving
whisky. Is it possible that the contract has
turned into a sale? No, since the payment is
made in exchange for the whisky's worth.
Just not because of the sugar The parties'
clear aim was to enter into a barter
agreement. If, on the other hand, B had
whisky on the day of delivery and
d) Assume that S and B agreed to a contract
in which S agreed to deliver sugar to B in
exchange for 100 bottles of whisky or
P20,000.00 in cash. If B charged P20,000.00
instead of whisky,
It is obvious that the resulting contract is
one of sale, not barter.
e) If B's obligation is to deliver 50 bottles of
whisky and pay P10,000.00 cash, or 75
bottles of whisky and P5,000.00 cash, or 25
bottles of whisky and P15,000.00 cash, the
transaction is considered a barter or sale,
depending on the parties' manifest
intention. According to Article 1468, if such
intention is not clearly visible, the contract
is deemed void.
III.)Sale distinguished from diction in
payment.
a) There is no preexisting credit in the sale,
but there is in the diction in payment;
b) In a sale, obligations are created,
whereas in a diction in payment, obligations
are not created.
c) In sale, the cause is the price paid from
the seller's point of view, or the thing sold
from the buyer's point of view, whereas in
diction in payment, the cause is the debt's
extinguishment from the buyer's point of
view. from the debtor's point of view, or
the object acquired in lieu of the credit
from the creditor's point of view;11
d) There is more leeway in determining the
price in a sale than in a diction in payment;
and
e)The buyer must always pay the price in a
deal, while the debtor must collect payment
before the contract is perfected in a diction
in payment. (See Manresa 16-17 in 10
Manresa.)
Article 1469. In order that the price may be
considered certain, it shall be sufficient that
it be so with reference to another thing
certain or that the determination thereof
be left to the judgment of a special person
or persons. Should such person or persons
be unable or unwilling to fix it, the contract
shall be inefficacious, unless the parties
subsequently agree upon the price. If the
third person or persons acted in bad faith or
by mistake, the courts may fix the price.
Where such third person or persons are
prevented from fixing the price or terms by
fault of the seller or the buyer, the party
not in fault may have such remedies against
the party in fault as are allowed the seller or
the buyer, as the case may be. (1447a)
I.)The price is certain
a.) The parties have fixed or agreed upon a
definite amount.
b.) It be certain with reference to another
thing certain
c.) The determination of the price is left
to the judgment of specified person or
persons and even before such
determination. 
II. When price considered certain.
a) The price in a contract of sale ought to be
settled for there can be no sale without a
price. (see Borromeo vs. Borromeo, 98
Phil.432 [1955].) It must be certain or
capable of being ascertained in
money or its equivalent; and money is to be
understood as currency, and its equivalent
means promissory notes, checks and other
mercantile instruments generally accepted
as representing
money.
III. Effect where price fixed by third person 
designated.
1.) In general, the price agreed upon by a
third party designated by the parties is
binding on them.
a) However, there are some exceptions,
such as: When a third party acts in bad faith
or by mistake, such as when a third party
sets the price with another analogous or
similar item in mind rather than the thing
being sold. In that case, the court may set
the price. However, a simple lapse in
judgment cannot be used to cast doubt on
the fixed price; and
b)When a third party disregards specific
instructions or the procedure established by
the parties or the data provided to him, he
establishes an arbitrary price. (See Manresa
10:53-54.)
ARTICLE 1470. Gross inadequacy of price
does not affect a contract of sale, except as
it may indicate a defect in the consents, or
that the parties really intended a donation
or some other act or contract.
NOTE: This just means that the damaged
good like a damage in packaging does not
affect the contract of sale. (Just like in
grocery stores where a canned good is
damaged, it is somewhat a donation already
where there is discount already for the
buyer).
I. Effect of Gross inadequacy of
price in voluntary sales
(1) As a general rule, while a contract of
sale is commutative, mere
inadequacy of the price or the fact
that the bargain was a hard one
generally does not affect it’s validity
when both parties are in the
position to form an independent
judgment concerning the
transaction.
 If there is gross inadequacy
the general rule is :
Low price= No effect on the
validity of the contract of
sale
Sale = Valid
But we also have exception;
if one of it happens the sale
will be set aside.
(2) Where low price indicates a defect
in the consent - The inadequacy of
price, however, may indicate a
defect in the consent such as when
fraud, mistake, or undue influence is
present (Art. 1355.) in which case
the contract may be annulled not
because of the inadequacy of the
price but because the consent is
vitiated.
 Vitiated Consent- the
consent gets from the
violence, intimidation,
mistake, or undue influence.
 From this the consent
will be invalid and
there would be no
contract of sale.
(3) Where price so low as to be
“shocking to conscience”- While it is
true that mere inadequacy of price
is not a sufficient ground for the
cancellation of a voluntary contract
of sale, it has been held that where
the price is so low that “a man in his
senses and not under a delusion”
would not accept it, the sale may be
set aside and declared an equitable
mortgage to secure a loan.
 Price is inadequate
Judicial Sale
 This property is worth
₱4,000,000 and it was
sold for only ₱
500,000. In this case
the price was too low
and it shocking to the
conscience so this
sale could be invalid.
As the price is so
grossly inadequate,
the contract will be
interpreted to be one
of loan with equitable
mortgage with the
price paid as principal
of said loan and the
land given merely as
security.
Terms and Definition:
INADEQUATE PRICE. This term is applied to i
ndicate the want of a sufficient consideratio
n for a thing sold,
or such a price as, under ordinary circumsta
nces, would be considered insufficient.
 Inadequacy of price is frequently connecte
d with fraud, gross misrepresentations, or a
n intentional concealment of the defects in  the property to his daughter for ₱ 100,000.
the thing sold. In these cases it is clear the. 
Vendor cannot compel the buyer 
to fulfill the contract.    
 In general, however, inadequacy of price is  intention to bound in the obligation of the
not sufficient ground to avoid a contract, pa
rticularly' when the property has been sold  his daughter.
by auction note  But  if an uncertain
consideration,  as a life annuity , be
given for an estate, and the contract be exe
cutory, equity, it seems, will enter into the a
dequacy of the consideration.  of the truth; as where parties
Commutative- A thing of value is exchanged
for equal value, i.e., ideally the value of
subject matter is equivalent to the price
paid.
Conscience- internal sense of right and
wrong
Judicial Sale- force sale of property
authorized b law to satisfy the debt
ART. 1471. If the price is simulated, the
sale is void, but the act may be shown to
have been in reality a donation, or some
other act or contract. (n)
I. Effect where price is simulated.
(1) If the price is simulated or
false such as when the vendor
really intended to transfer the
thing gratuitously, then the sale
is void but the contract shall be
valid as a donation. (Arts. 1471,
1345, 1353.)
 This just means if the price is
fictitious, the sale is
void. Unless it is donation
and the requirement are
completed to make the
contract acceptable it is
valid.
NOTE: NOT THE SALE BUT
THE CONTRACT
For example:
Mr. Molina has a property and it’s price
value is ₱ 5,000,000 he said that he will sell
Held: This is a simulated price because the
price is simulated. It is also shown that they
will be having transaction but they have no
contract of sale. And it is like a donation to
Terms and Definition
 Simulation- In the civil law.
Misrepresentation or concealment
pretend to perform a transaction
different from that in which they
really are engaged.
ART. 1472. The price of securities, grain,
liquids, and other things shall also be
considered certain, when the price fixed is
that which the thing sold would have on a
definite day, or in a particular exchange or
market, or when an amount is fixed above
or below the price on such day, or in such
exchange or market, provided said amount
be certain. (1448)
 Fixed price in a particular day
 Considered certain
I. Price on a given day at particular
market.
An amount is fixed above or
below the price on a given day or
in a particular exchange or
market, the said amount must
be certain; otherwise, the sale is
inefficacious (Art. 1474.) because
the price cannot be determined,
 this article is especially
applicable to fungible things like
securities, grain, liquids, etc. the
price of which are subject to
fluctuations of the market.
Shared Price of PLDT
May 7, ₱ 1,500
2021
May 8, ₱ 1,500
2021
May 9, ₱ 1,500
2021
This figure shows the certain amount of
shared price of PLDT in everyday basis. Let’s
say that on May 10,2021 will have a less of
10% so it will be ₱ 1,350 in that case the
price is also fixed.
Article 1473. The fixing of the price can
never be left to the discretion of one of the
contracting parties. However, if the price
fixed by one of the parties is accepted by
the other, the sale is perfected. (1449a)
Illustration A: Blue wants to buy a necklace
to his friend Red. Red set the price up to
5,000 to blue, but blue is not agreed on the
given price. If the buyer does not agree to
the seller priced there is no sale in a general
rule   2.
Illustration B: Blue wants to buy a necklace
to his friend Red. Red set the price up to
5,000 to blue. Blue is not agreed, so red
lower the price to 3,000. Blue agreed to the
price and buy it. If both parties agreed to
the given price, there is a sale.  6.
Article 1474. Where the price cannot be
determined in accordance with the
preceding articles, or in any other manner,
the contract is inefficacious. However, if
the thing or any part thereof has been
delivered to and appropriated by the
buyer, he must pay a reasonable price
therefor. What is a reasonable price is a
question of fact dependent on the
circumstances of each particular case (n)?
failure to determine prices.
1. If the price cannot be determined of
what particular desire value of the
price this contract is null or void.
There is no obligation between the
two parties. 
2. If the contract between the two
parties agreed upon on the given
priced. The obligation of the first
party to deliver the particular thing
to the second party and they both
do the obligation. this contractual
and sometimes quasi-contract. 
Concept of reasonable price. The
reasonable may not agree on the current
price where the price has been made. The
price high may accrue in fortuitous event. 
Determination of fair market value. Market
value is the fair sale by a first party who
willing but also not obligated to sell to the
second party willing but not obliged to buy. 
ART. 1475. The contract of sale is perfected
at the moment there is a meeting of minds
upon the thing which is the object of the
contract and upon the price. From that
moment, the parties may reciprocally
demand performance, subject to the
provisions of the law governing the form of
contracts. (1450a)
Perfection of contract of sale. In the
contract of a both parties agreed or accept
to the offer stated without necessary
condition and demand the reciprocal
obligation are arises. 
1. Conduct of the parties.
Transfer of ownership. 
3. Form of contract.
4. Notarized deed of sale states
receipt of price.
5. Applicant’s qualification to buy still
subject for investigation.
Applicant’s qualification to buy still
subject for investigation.
7. Chattel mortgage of car by
mortgagor-buyer prior to transfer
of title to his name.
8. Non-fulfillment by one party of his
obligation.
Illustration A: Paris ordered a 5 kilo of
mango to Greece and Paris wants to deliver
tomorrow morning to her house. Greece
stated a price 90,00 pesos per kilo. They
both agreed upon. They are now having a
reciprocal obligation.
When definite agreement on manner of
payment essential. The two parties meet
their expectation and agreed on the
payment. 
Effect of failure to pay price. The unpaid of
the acquire price in the middle of the
instances in the law declares to void a
contract of sale. 

Right of owner to fix his own price. The

owner of the things being purchased has a
right to state the desire price also a right to
give considered to his buyer. 
 GROUP 5

Catherine Marquina- Outline of Arts. 1423-1425

Shane Kyla Marquez- Outline of Arts. 1426-1428

Justine Carl Moras – Outline of Arts. 1458-1460

Alessandra Dominique Napoles – Outline of Arts. 1461-1463

April Rose Orogo – Outline of Arts. 1464-1465

Lesel Pclibar- Outline of Arts.1466-1467

Merry Grace Pañares – Outline of Arts. 1468-1469

Shaim Panganiban – Outline of Arts. 1470-1472 ; Encoder

Frisha Kate Profil - Outline of Arts. 1473-1475