CIVIL LAW REVIEW

HIGHLGHTS OF READING ASSIGNMENT, June 26, 2021

A. Obligation to Deliver

1. Art. 1524-Two (2) cases when the vendor is not bound to deliver

a. If the vendee has not paid him the price

b. if no period for payment has been fixed in the contract

Third case

c. no period has been fixed, but the vendee has lost the right to make use of the period and

refuses to pay (Art. 1198, Cvil Code)

Art. 1524. The vendor shall not be bound to deliver the

thing sold, if the vendee has not paid him the price, or if
no period for the payment has been fi xed in the contract.

B. Rules on Double Sale

1. Art. 1544, para. 1- personal property-to the possessor in good faith

2.Art. 1544, para. 2- real property

a. registrant in good faith

b. possessor in good faith

c. person with the oldest title in good faith

Art. 1544. If the same thing should have been sold to

different vendees, the ownership shall be transferred to
the person who may have first taken possession thereof in
good faith, if it should be movable property.

Should it be immovable property, the ownership shall

belong to the person acquiring it who in good faith first
recorded it in the Registry of Property.

Should there be no inscription, the ownership shall

pertain to the person who in good faith was first in the
possession; and in the absence thereof, to the person who
presents the oldest title, provided there is good faith.

(1) Rules of Preference in Case of Double Sale

(a) Personal property –– possessor in good faith.
(b) Real property —
1) registrant in good faith;
2) possessor in good faith;
3) person with the oldest title in good faith.

2. Definition of Purchaser in Good Faith-See# 1, Comment para. D

A purchaser in good faith is one who buys the 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.

A person for example who buys land which he knows has already been promised to another is a purchaser in
bad faith.

3. ILustration of Rule on Personal Property-see #2, Comment, Case of D8P v. Mangawan, Astorga v. CA

(2) Illustration of Rules as to Personal Property

In the case of Tomasi v. Villa-Abrille, L-7404, Aug. 21,
1958, the Surplus Property Commission sold to a buyer “all
the movable goods” in a base area in Guiuan, Samar. The
buyer then immediately took possession of all the movable
properties located within the area. Subsequently, however,
the Commission also sold to another the same properties in
the same area.

The second buyer then filed suit to have himself declared

the owner of the properties entitled to the possession of the
same. The Supreme Court ruled in favor of the first buyer
because it was he who had first taken possession in good faith
of the properties.

(3) Illustration of Rules as to Real Property

A sold land to B. Subsequently, A sold the same land
to C who in good faith registered it in his name. Who should
be considered the owner?
ANS.: C in view of the registration in good faith.

(4) Cases

DBP v. Mangawan, et al.

L-18861, Jun. 30, 1964

FACTS: A sold his land to two different parties at different

times, selling it first to X under Original Torrens Certifi
cate of Title 100. X had this title cancelled and a transfer
Certificate of Title was issued in his name. Subsequently, A
sold the same land under a different Certificate of Title to
Y. Which of the two buyers is to be preferred?
HELD: This is a case of double sale, and clearly, X the
first buyer who registered the land in his name, ought to be
preferred.

C. Conditions and Warranties

1 Art. 1547- implied Warranty against a) Eviction and b) Hidden Defects

Art. 1547. In a contract of sale, unless a contrary intention

appears, there is:
(1) An implied warranty on the part of the seller that he
has a right to sell the thing at the time when the ownership
is to pass, and that the buyer shall from that time have and
enjoy the legal and peaceful possession of the thing;

(2) An implied warranty that the thing shall be free

from any hidden faults or defects, or any charge or encumbrance
not declared or known to the buyer.

This article shall not, however, be held to render liable

a sheriff, auctioneer, mortgagee, pledgee or other person
professing to sell by virtue of authority in fact or law, for
the sale of a thing in which a third person has a legal or
equitable interest.

Implied Warranties Against Eviction and Against

Hidden Defect
(a) This Article is fundamentally important.
(b) A buyer at a tax sale is supposed to take all the chances
because there is no warranty on the part of the State
(Gov’t v. Adriano, 41 Phil. 1121) and a sheriff does not
guarantee title to the property he sells. (Mun. of Albay
v. Benito, et al., 43 Phil. 576).
(c) In general, the actions based on the implied warranties
prescribe in 10 years since these obligations are imposed
by law. (See Phil. Nat. Bank v. Lasos, [C.A.] 40 O.G.
[Supp. 5], p. 10). Special provisions, of course, found in
the succeeding articles will naturally prevail.

2. Implied Warranty against Eviction the vendee is deprived of the thing purchased by

a. final judgment based on a right prior to the sale

b. an act imputable to the vendor

3. Art. 1561 Warranty against Hidden Defects of Encumbrances upon the thing sold

The vendor shall be responsible for the following hidden defects:

a. if he renders it unfit for the use intended

b. if he diminishes its fitness for such use to the extent that if the vendee had been aware

thereof, he would not have acquired it or he would have given a lower price for it

Art. 1561. The vendor shall be responsible for warranty

against the hidden defects which the thing sold may have,
should they render it unfit for the use for which it is intended,
or should they diminish its fitness for such use to such
an extent that, had the vendee been aware thereof, he would
not have acquired it or would have given a lower price for it;
but said vendor shall not be answerable for patent defects or
those which may be visible, or for those which are not visible
if the vendee is an expert who, by reason of his trade or
profession, should have known them.

4. Exception the vendor shall not be responsible for the following:

a. patent defects or those visible

b. those not visible, if the vendee if the vendee is an expert who by reason of his trade

or profession should have known them

D. Obligations of the Vendee

1. Art. 1582 The vendee is bound to -

a. accept delivery

b. pay the price of the thing sold

Art. 1582. The vendee is bound to accept delivery and

to pay the price of the thing sold at the time and place
stipulated in the contract.
If the time and place should not have been stipulated,
the payments must be made at the time and place of the
delivery of the thing sold.

E. The buyer may suspend payment of the price fixed if there is a well grounded fear because of the

following:
a.a vindicatory action or action to recover

b. a foreclosure of mortgage

F. Extinguishment of Sale

1. Art. 1600- Sales are extinguished by -

a. same causes as other obligations

b. conventional or legal redemption

(1) How Sales Are Extinguished

Sales are extinguished:
(a) by same causes as in other obligations (such as novation);
(b) by redemption (whether conventional or legal).

2. Art. 1601-Definition of Conventional Redemption

Art. 1601. Conventional redemption shall take place when
the vendor reserves right to repurchase the thing sold, with
the obligation to comply with the provisions of Article 1616
and other stipulations which may have been agreed.

3. Art. 1602 Six (6) grounds why a contract will be presumed to be an equitable mortgage

Art. 1602. The contract shall be presumed to be an

equitable mortgage, in any of the following cases:

(1) When the price of a sale with right to repurchase

is usually inadequate;
(2) When the vendor remains in possession as lessee
or otherwise;
(3) When upon or after the expiration of the right
to repurchase another instrument extending the period of
redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of
the purchase price;
(5) When the vendor binds himself to pay the taxes
on the thing sold;
(6) In any other case where it may be fairly inferred
that the real intention of the parties is that the transaction
shall secure the payment of a debt or the performance of
any other obligation.
In any of the foregoing cases, any money, fruits or other
benefi t to be received by the vendee as rent or otherwise
shall be considered as interest which shall be subject to
the usury laws.
4. Art. 1604-Same grounds as Art. 1602 for a contract purporting to be an absolute sale

Art. 1604. The provisions of Article 1602 shall also apply

to a contract purporting to be an absolute sale.

5. Art. 1605-Remedy of vendor cited in Arts. 160 and 1804 for reformation
Art. 1605. In the cases referred to in Articles 1602 and
1604, the apparent vendor may ask for the reformation of
the instrument.