lOMoARcPSD|8793632

Sales, Agency and Bailments

BS Accountancy (Lyceum of the Philippines University)

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Vendor – Is bound to transfer the ownership
of and deliver, as well as warrant the thing
which is the object of the sale
Actual or real delivery - the thing sold is
placed in the control and possession of the
vendee, This involves the physical delivery
of the thing and is usually done by the
passing of a movable thing from hand to
hand.
Constructive or legal delivery - is a
general term comprehending all those acts
which, although not conferring physical
possession of the thing, have been held by
construction of law equivalent to acts of real
delivery.
Execution of a public document - As a
specie of constructive delivery that is also
considered a form of symbolic delivery.
Symbolical tradition or traditio
symbolica - to effect the delivery, the
parties make use of a token symbol to
represent the thing delivered
Traditio longa manu - This mode of
delivery takes place by the mere consent or
agreement of the contracting parties as
when the vendor merely points to the thing
sold which shall thereafter be at the control
and disposal of the vendee.
Traditio brevi manu - This mode of legal
delivery happens when the vendee has
already the possession of the thing sold by
virtue of another title as when the lessor
sells the thing leased to the lessee.
Traditio constitutum possessorium - It
takes place when the vendor continues in
possession of the property sold not as
owner but in some other capacity, as for
example, when the vendor stays as a tenant
of the vendee
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Quasi-delivery or quasi-traditio - This is
the mode of delivery of incorporeal things or
rights
Contract of absolute sale - ownership is
transferred simultaneously with the delivery
of the thing sold
Tradition - is a derivative mode of acquiring
ownership by virtue of which one who has
the right and intention to alienate a
corporeal thing, transmits it by virtue of a
just title to one who accepts the same
Accion reinvidicatoria - involves not only
possession, but ownership of the property.
The plaintiff in this action sets up title in him
and prays that he be declared the owner
and be given possession thereof.
Public instrument - an instrument or
document attested and certified by a public
officer authorized to administer oath, such
as a notary public
Rent - is a civil fruit that belongs to the
owner of the property producing it by right of
accession
Parol or extrinsic testimony - could not be
admitted for the purpose of showing that an
invoice or bill of sale that was complete in
every aspect and purporting to embody a
sale without a condition or restriction
constituted a contract of sale or return
Sale or return — It is a contract by which
property is sold but the buyer, who becomes
the owner of the property on delivery, has
the option to return the same to the seller
instead of paying the price.
Sale on trial or approval — It is a contract
in the nature of an option to purchase if the
goods prove satisfactory, the approval of the
buyer being a condition precedent
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res perit domino - if the thing is lost by
fortuitous event, the risk is borne by the
owner of the thing at the time of the loss
Manresa - an eminent Spanish
commentator on the Spanish Civil Code
upon which our Civil Code is based
Sale - is a derivative mode of acquiring
ownership and the buyer gets only such
rights as the seller had
Perfected contract of sale - which is a
consensual contract perfected by mere
consent cannot be challenged on the
ground of non-ownership on the pact of the
seller at the time of its perfection, hence the
sale is still valid
Factors Acts - are designed to protect third
persons who deal with an agent believing
him to be the owner of goods.
Agent - a person to whom the owner
delivered goods for sale or as security, or
entrusted documentary evidence of title
thereto
Document of title to goods — Includes
any bill of lading, dock warrant, “quedan,” or
warehouse receipt or order for the delivery
of goods, or any other document used in the
ordinary course of business in the sale or
transfer of goods,
Goods — included all chattels personal but
not things in action or money of legal tender
in the Philippines.
Order — relating to documents of title
means an order by indorsement on the
documents
Bill of lading — it is a contract and a
receipt for the transport of goods and their
delivery to the person named therein, to
order, or to bearer
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Dock warrant — It is an instrument given
by dock owners to an importer of goods
warehoused on the dock as a recognition of
the importer’s title to the said goods, upon
production of the bill of lading
Warehouse receipt — a contract or receipt
for goods deposited with a warehouseman
containing the latter’s undertaking to hold
and deliver the said goods to a specified
person, to order, or to bearer
Quedan - is a warehouse receipt usually for
sugar received by a warehouseman
Civil Code - governs documents of title
other than warehouse receipts
Warehouse Receipts Law - primarily
governs warehouse receipts
Code of Commerce - subsidiarily governs
bills of lading issued by common carriers
Negotiable documents of title - those by
the terms of which the bailee undertakes to
deliver the goods to the bearer and those by
the terms of which the bailee undertakes to
deliver the goods to the order of a specified
person
Non-negotiable documents of title - those
by the terms of which the goods covered
are deliverable to a specified person
Time of delivery - is also determined by the
agreement of the parties or, in the absence
thereof, by the usage of trade
“Fair value to him” - should be interpreted
to mean the benefit which the buyer may
have received from the goods
Usage of trade - is any practice or method
of dealing having such regularity of
observance in a place, vocation or trade as
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to justify an expectation that it will be
observed with respect to the transaction in
question
Course of dealing - is a sequence of
previous conduct between the parties to a
particular transaction which is fairly to be
regarded as establishing a common basis of
understanding for interpreting their
expressions and other conduct
Collect on delivery - the carrier acts for the
seller in collecting the purchase price
Free on board - They mean that the goods
are to be delivered free of expense to the
buyer to the point where they are.
Cost, insurance and freight - They signify
that the price fixed covers not only the cost
of the goods, but the expense of freight and
insurance to be paid by the seller
Unpaid seller - is one who has not been
paid or tendered the whole price or who has
received a bill of exchange or other
negotiable instrument as conditional
payment and the condition on which it was
received has been broken by reason of the
dishonor of the instrument
Possessory lien - entitles the seller to
retain possession of the goods as security
for the purchase price
Preferred claim or lien - the goods are in
the possession of the buyer, the seller has
no more possessory lien. Upon delivery, the
seller’s possessory lien on the goods is lost,
but his lien on the price remains
Accessions - are the fruits of a thing; or
additions to, or improvements upon, a thing
such as the young of animals, house or
trees on a land
Accessories - are anything attached to a
principal thing for its completion, ornament,
or better use such as picture frame, key of a
house
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Prius tempore, patior jure - first in time,
stronger in right, Knowledge by the first
buyer of the second sale cannot defeat the
first buyer’s right except when the second
first registers in good faith the second sale
“Who first took possession” - is
equivalent to tradition, real or symbolic,
such as that which is acquired by the
execution of a public instrument
Condition - means an uncertain event or
contingency on the happening of which the
obligation of the contract depends
Warranty - is a statement or representation
made by the seller of goods,
contemporaneously and as a part of the
contract of sale, having reference to the
character, quality, or title of the goods, and
by which he promises or undertakes to
insure that certain facts are or shall be as
he then represents them
Express warranty - is any affirmation of
fact or any promise by the seller relating to
the thing, the natural tendency of which is to
induce the buyer to purchase the thing and
the buyer thus induced, does purchase the
same
Implied warranty - is that which the law
derives by implication or inference from the
nature of the transaction or the relative
situation or circumstances of the parties
Eviction - may be defined as the judicial
process, whereby the vendee is deprived of
the whole or part of the thing purchased by
virtue of a final judgment based on a right
prior to the sale or an act imputable to the
vendor
Trespass in fact - does not give rise to the
application of the doctrine of eviction
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Disturbance in law - requires that a person
go to the courts of justice claiming the thing
sold, or part thereof, and invoking reasons
Prescription - one acquires ownership and
other real rights through the lapse of time in
the manner and under the conditions
prescribed by law
Consciente - the waiver is voluntarily made
by the vendee without the knowledge and
assumption of the risks of eviction
Intencionada - the waiver is made by the
vendee with knowledge of the risks of
eviction and assumption of its
consequences
servitude (or easement) - is an
encumbrance imposed upon an immovable
for the benefit of another immovable
belonging to a different owner
Redhibition - is the avoidance of a sale on
account of some vice or defect in the thing
sold, which renders its use impossible
Redhibitory action - is an action instituted
to avoid a sale on account of some vice or
defect in the thing sold which renders its
use impossible, or so inconvenient and
imperfect that it must be supposed that the
buyer would not have purchased it had he
known of the vice.
Accion quanti minoris or estimatoris –
this remedy is if the object is to procure the
return of a part of the purchase price paid
by the vendee
Redhibitory vice or defect - is a defect in
the article sold against which defect the
seller is bound to warrant.
grade, but it does require identity between
what is described in the contract and what is
tendered, in the sense that the latter is of
such quality to have some value.
Warranty of merchantability - is a
warranty that goods are reasonably fit for
the general purpose for which they are sold.
Warranty of fitness - is a warranty that the
goods are suitable for the special purpose
of the buyer which will not be satisfied by
mere fitness for general purposes.
Acceptance - is assent to become owner of
the specific goods when delivery of them is
offered to the buyer
Express acceptance - takes place when
the buyer, after delivery of the goods,
intimates to the seller, verbally or in writing,
that he has accepted them.
Implied acceptance - takes place when the
buyer, after delivery of goods, does any act
inconsistent with the seller’s ownership, as
when he sells or attempts to sell the goods
Nominal damages - are adjudicated in
order that a right of the plaintiff, which has
been violated or invaded by the defendant,
may be vindicated or recognized, and not
for the purpose of indemnifying the plaintiff
for any loss suffered by him
Theory of recoupment - is that the seller’s
damages are cut down to an amount which
will compensate him for the value of what
he has given

Quality of goods - includes the state or

condition of goods

Merchantability. — It is not a warranty of

quality in the sense of requiring a particular

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