Professional Documents
Culture Documents
The breach cannot be directed to the sellers of the Completed before sale. The vendee may lose the
seller unless such sellers had promised to warrant in thing purchased to a 3rd person ho has acquired title
favor of later buyers. thereto by prescription. When prescription has
commenced to run against the vendor & was already
Even if the buyer does not appeal from a judgment completed before the sale, the vendee can enforce
ordering his eviction & the judgment subsequently the warranty against eviction. So, deprivation is
becomes final, the seller is still liable for the based on a right prior to the sale & an act imputable
eviction. to the vendor.
Even if it was the buyer who instituted the suit Completed after sale. Even if prescription has
against the 3rd person, if the buyer was defeated, started before the sale but has reached the limit
still the seller would be liable. prescribed by law after the sale, the vendor is not
liable for eviction. This is because the vendee could
All rights acquired prior to the sale by others can be easily interrupt the running of the prescriptive
imputed to the seller. Imputability is really period by bringing the necessary action.
important, seller is still liable even if the act be made
after the sale. Art. 1550 will have no application to a property sold
and registered under the Torrens system as
B bought land from S. B did not register. C then ownership of the land is not subject to prescription.
bought the same land from S. C registers. B is
defeated. Can B hold S liable for the eviction ART. 1551
although C’s right came after the sale to him? Deprivation for nonpayment of taxes:
YES, because although it came after the sale yet it A has land, the taxes on which he has not paid. A
was attributable to S’s own fault & bad faith. sells it to B. The land is sold at public auction for the
non-payment of taxes and B is evicted. A is
responsible, but only if B did not know at the time of
The SELLER is RESPONSIBLE for: the sale that A had not paid the taxes thereon.
(a) His own acts; and
(b) Those of his predecessors-in-interest. ART. 1552
He is NOT responsible for dispossession due to: In case of failure of title, a purchaser in good faith
(a) Acts imputable to the buyer himself; and at a judicial sale is entitled to recover the purchase
money from the officer if the funds are still in his
hands or from the judgment debtor. Value at the time of eviction should be returned
because this is a case of solutio indebiti.
Bobis v. Prov. Sheriff of Camarines Norte A buyer at and
an execution sale acquires nothing if the judgment
debtor had already assigned or transferred the (b) WITH knowledge of risk of eviction (waiver
property to another before the levy on execution. intencionada). –must be clearly proved
A sheriff who merely adheres to the terms of a writ The waiver is made by the vendee with knowledge of
of execution as well as a buyer at the public auction, the risk of eviction & assumption of its consequences.
is not liable for damages.
Here, nothing need be returned as it is aleatory in
This article is based on the principle of solution nature and buyer assumes the consequences. The
indebiti. Thus, if the purchaser of real property sold vendor is exempted from the obligation to answer for
on execution be evicted therefrom because the eviction provided he did not act in bad faith.
judgment debtor had no right to the property sold,
the purchaser is entitled to recover the price paid ART. 1555
with interest, from the judgment debtor. If the sale What SELLER must give in case of eviction:
was effected by the judgment creditor, he should not V –Value
be permitted to retain the proceeds of the sale, at I –Income (or fruits)
the expense of the purchaser. C –Costs
E –Expenses
ART. 1553 D –Damages (and interests & ornamental expenses) if
EFFECT of Stipulation waiving liability for eviction seller was in bad faith
SELLER in GOOD FAITH – exemption is VALID,
without prejudice to Art. 1554 If the court does not order the buyer to deliver the
income or fruits to the winner, said buyer would be
SELLER in GOOD FAITH –stipulation is VOID. entitled to them. This is fair for after all, in the
meantime, the seller was using the price money
Na-confuse ko, puro seller, puro in good faith… without interest.
Reason for the summoning: to give vendor opportunity The defect is IMPORTANT if (1) it renders the thing
to show that the action against he buyer is unjust. sold unfit for the use for which it is intended; or (2)
if it diminishes its fitness for such use to such an
ART. 1559 extent that the vendee would not have acquired it
Seller must be made Co-defendant with the Buyer had he been aware thereof or would have given a
(a) Seller was notified but did not appear. The lower price for it.
buyer won in the suit filed by the 3rd person.
Can buyer recover expenses? NO, because ART. 1562
there really was no breach of warranty. Merchantable quality is fit for the general purpose of
(b) In an eviction suit, it is permissible for the a thing, and not necessarily the particular purpose for
buyer to file a cross-claim against the seller which it has been acquired.
for he enforcement of the warranty should
the buyer lose. This can be done in some The purpose of holding the seller on his implied
cases to save time & prevent inconvenience. warranties is to promote high standard in business
If the buyer wins, there is no necessity for and to discourage unfair dealings, e.g. IW of fitness,
the enforcement of the warranty since there IW of merchantability,
has been no breach thereof. Where the agreement is that all the tobacco in a
The suit against the seller may be in the form certain place would be taken, the obligation is
of a 3rd-party complaint if the vendor has not absolute, and does not depend upon the quality of the
been made a co-defendant. tobacco, since here it was not the quality that
counted.
ART. 1560
The defect contemplated here is a sort of “hidden ART. 1563
defect” but remedy is similar to that provided in the Effect of Sale under the patent or trade name: here
case of eviction. there is generally no warranty as to the article’s
“fitness for any particular purpose.”
REMEDIES:
If made WITHIN a year: Art. 1563 limits the application of Art. 1562.
Rescission;
Damages; ART. 1564
If AFTER 1 YEAR, only damages The parties are presumed to be acquainted with the
usages of trade.
RIGHTS of vendee CANNOT be exercised in the
following cases: ART. 1565
(1) If the burden or servitude is apparent; RULE in case of SALE by SAMPLE;
(2) If the non-apparent burden or servitude is (1) Where sample not merchantable –all the
registered; and buyer is entitled to is that the goods be like
(3) If the vendee had knowledge of the the sample. So he has no right to have the
encumbrance whether it is registered or not goods merchantable if the sample which he
has inspected is not.
This article is applicable whether sale is in public or (2) Where sample subject to latent defect –in
private instrument, or made orally. the case of a sale by sample, if the sample si
subject to a latent defect, & the buyer
WARRANTY AGAINST HIDDEN DEFECTS OF, OR reasonably relies on the seller’s skill or
ENCUMBRANCES UPON, THE THING SOLD judgment, the buyer is entitled not simply to
goods like the sample, but to goods like those
ART. 1561 which the sample seems to represent, i.e.,
merchantable goods of that kind and e.g. S sold a car for P300, 000 to B. Unknown to B,
character. the car then had a cracked engine block, the
replacement of which would cost about P175, 000.
ART. 1566 Despite his knowledge of this defect, he obtained a
Why is the seller responsible for hidden defects even waiver from B of the latter’s right under the
if he is in good faith? BECAUSE he has to repair the warranty against hidden defects. Subsequently, the
damage done. The object of the law is reparation. car was wrecked due to the recklessness of B who
only then discovered the defects. What right, and to
S & B agreed that S would be exempted from hidden what extent, if any, has B against S?
defects. But S knew of hidden defects. Would S be B can recover approximately P175,000, which may
liable? YES, because of his bad faith. To hold represent the difference between the purchase
otherwise would be to legalize fraud. price and the true value. The waiver is void because
S knew of the defect.
CAVEAT EMPTOR vs. CAVEAT VENDITOR
The rule before was caveat emptor (let the buyer ART. 1570
beware). This was rejected and caveat venditor was While the preceding articles apply to judicial sales,
adopted in accordance with which “the vendor is still no liability for damages will be assessed against
liable to the vendee for any hidden faults or defects the judgment debtor in view of the compulsory
in the things sold, even though he was not aware nature of the sales.
thereof. This is based on the principle that a sound
price warrants a sound article. ART. 1571
With respect to 3rd persons, however, caveat emptor Prescriptive period: 6 months from delivery
still applies.
Effect of mere notification: the buyer notifies the
ART. 1567 seller of the existence of the hidden defect, but
In the cases of Arts. 1561, 1562, 1564, 1565 & 1566, does not sue within 6 months, the action will of
the vendee may elect between withdrawing from the course prescribe.
contract and demanding a proportionate reduction of
the price, with damages in either case. ART. 1572
Sale of 2 or more animals together
Remedies in case of hidden defects: (a) Generally, a defect in 1 should not affect the
(a) Withdrawal or rescission (accion redhibitoria) sale of the others
plus damages; (b) This is true whether the price was a lump
(b) Proportionate reduction (accion quanti minors sum, or separate for each animal.
o estimatoria) –reduction in the price, plus (c) Note the exception: team
damages.
ART. 1573
This warranty in sales is applicable to lease. The rule stated in Art. 1572 has been made applicable
to the sale of other things.
ART. 1568
Effect of loss of the thing because of the hidden ART. 1574
defects When no warranty against hidden defects exists
Whether the seller knew or did not know of Re “livestock sold as condemned,” the fact that the
the defects, he is still responsible. However, in case livestock is condemned must be communicated tot eh
of ignorance, there will be no liability for damages. buyer; otherwise, the seller is still liable.
OBLIGATIONS OF THE VENDEE The second par.states the rules for delivery by
installments, & distinguishes WON the breach is
ART. 1582 severable.
Principal obligations of the buyers:
(a) Accept delivery; ART. 1584
(b) Pay the price. When buyer has right to examine
Generally, the buyer is entitled to examine
Tender of payment ought to be made in legal tender the goods prior to delivery. And this is true even if
(not a check), unless another mode is accepted by the the goods are shipped FOB.
creditor.
Grageda v. IAC On Mar 26 1975, Dino ordered from
On Jan. 5, A sold & delivered his truck, together with Francisco 500 sets of pyrex trays. Prior to Apr 27
the corresponding certificate of public convenience 1975, Francisco delivered some of the items but Dino
(CoPC) to B for P600,000, payable w/in 60 days. 2 outrightly rejected them. After making the proper
weeks after the sale, & while the CoPC was still in the corrections, Francisco made subsequent deliveries on
name of A, the cert. was revoked by the Public Apr 27, 30, May 1, 3, 12 & 27, 1975. Dino’s caretaker
Service Commission thru no fault of A. Upon the duly received the deliveries. On several occasions,
expiration of the 60-day period, A demanded Francisco demanded payment for the total value of
payment of the price from B. B refused to pay, the deliveries but Dino asked for extension of time
alleging that the contract of sale was VOID because within which to pay. On Jun 20 1975, Dino sent a
the CoPC w/c was the main consideration of the sale letter to Francisco, telling the latter that he rejects
no longer existed. Is the contention of B tenable? the items delivered. Because of this, Francisco sued
Dino for payment.
Under the circumstances, the contention of B is not
tenable for the following reasons: Here it was held that the delay in the advice or
notice of rejection –almost 2 months after receipt –
(a) It cannot be correctly contended that the was rather too late.
sale is void, since the consideration actually
This article accords the buyer the right to examine
the goods to ascertain whether they are in 3 cases contemplated:
conformity with the contract. Such opportunity to (a) In No. 1, no demand is needed
examine, however, should be availed of within a (b) In No. 2, the reason for the law is that the
reasonable time in order that the seller may not be fruits or income is sufficient to warrant the
subjected to undue delay or prejudice in the payment payment of interest.
of his raw materials, workers, & other damages which (c) In No. 3, “default” is mora, called “in delay”
may be incurred due to deterioration of his products. under the provisions of the Civil Code.
The buyer is deemed to have accepted the
goods when, after the lapse of a reasonable time he In the absence of stipulation in a monetary obligation,
retains them without intimating to the seller that he legal interest takes the place of damages. This is so
has rejected them. even if the damages are actually more or less. The
possibility of gain because of an investment should be
When buyer has no right to examine: discounted; instead of a gain, there might be a loss.
(a) when there is a stipulation to this effect Therefore, the law has compromised on legal interest.
(b) when the goods are delivered COD
ART. 1590
ART. 1585 The buyer may SUSPEND the payment of the price
3 ways of accepting the goods: if:
(a) express acceptance (a) There is a well-grounded fear (fundado
(b) when buyer does an act which only an owner temor)
can do (b) The fear is because of:
(c) failure to return after reasonable lapse of (1) A vindicatory action or action to recover,
time or
(2) A foreclosure of mortgage.
Buyer accepted goods despite delay. Buyer also
promised later on to pay. Subsequently, buyer ART. 1591
asked for damages on account of delay. When seller may immediately sue for rescission of
Buyer is estopped because of the acceptance the Sale
without reservation at the time of acceptance. The seller must have reasonable grounds to
fear:
ART. 1586 (a) LOSS of the immovable property sold,
Even if buyer accepts, seller can still be liable and
(a) reason for the last sentence: to prevent (b) LOSS of the price
afterthoughts or belated claims. So if the buyer is squandering his money, but the
(b) The buyer is allowed to set up the breach of immovable property remains untouched, this article
the warranty or promise as a set-off or cannot apply.
counterclaim for the price. If neither ground exists, Art. 1191 applies:
“The power to rescind obligations is implied in
ART. 1587 reciprocal ones, in case one of the obligors should not
Effect if buyer justifiably refuses to accept the comply with what is incumbent upon him.
delivery The injured party may choose between the
(a) Buyer has no duty to return the goods to the fulfillment and the rescission of the obligation, w/
seller the payment of damages in either case. He may also
(b) Mere notification to seller of refusal will seek rescission, even after he has chosen fulfillment,
suffice if the latter should become impossible.
(c) But buyer may make himself a voluntary The court shall decree the rescission claimed,
depositary –in which case he must safely take unless there be just cause authorizing the fixing of a
care of them in the mean time period.
This is understood to be w/o prejudice to the
ART. 1588 rights of 3rd persons who have acquired the thing, in
Effect if buyer unjustifiably refuses to accept the accordance with articles 1385 and 1388 and the
delivery: Mortgage Law.”
Generally, the buyer becomes the owner. Exception –
when there is a contrary stipulation or when the
seller reserves the ownership as a sort of security
for the payment of the price.
ART. 1589
This article answers the question: in what cases is
the buyer liable for interest on the price?