CIVIL CODE OF THE
PHILIPPINES
Chapter 2
CAPACITY TO BUY OR SELL
ARTICLE 1489
All persons who are authorized
in this Code to obligate themselves, may
enter into a con- tract of sale, saving the
modifications contained in the following
articles.
Where necessaries are sold and
delivered to a minor or other person
without capacity to act, he must pay a
reasonable price therefor. Necessaries
are those referred to in article 290.
(1457
Person who may enter into a contract
of sale.
 Person who has both juridical
capacity and capacity to act is said to
have full capacity (Art. 37)
 Legal age and suffers no restrictions
on his capacity to act.
 Necessaries are those things which
are needed for sustenance, dwelling,
clothing, medical attendance,
education and transportation
according to the financial capacity of
the family of the in- capacitated
person. (see Art. 194, Family Code.)
KINDS OF INCAPACITY
 Absolute - when a person cannot bind
himself in any contract.
REASON: minority, insanity,
imbecility, prodigality, civil interdiction
(Art. 38)
 Relative - when a person cannot buy
a certain property because of a special
prohinition.
-by reason of his/her relation to the
object of the sale (Art. 1491)
 Necessaries- Art 290 and Art 38-39
 Contracts entered by minor are
VOIDABLE (Art 1327 and 1390)
ARTICLE 1490
The husband and the wife
cannot sell property to each other,
except:
1. When a separation of property was
agreed upon in the marriage
settlements; or
2. When there has been a judicial
separation of property under Art 191
 Prohibition is intended to :
1. Prevent the stronger spouse from
exploiting the weaker spouse;
2. Prevent donations disguised as sale;
3. Protect third person specially creditors
against fraud through the transfer of the
properties of one spouse to other to evade
payment of obligation
 Donations in marriage settlements are
allowed provided the thing/s donated
do not exceed 1/5 of the donor’s
present property (Art. 82 and 84)
REASON: because at the time of
donation, the parties are not yet spouses
XPN to the prohibition:
1. They have chosen the absolute
separation of property as their
property regime (Art 143-146 FC);
2. When they have obtained legal
separation of property as their
property regime(Art 134 and 135)
 Persons permitted to question sale:
1. Only by persons who bear such relation
to the parties making the transfer or to the
property itself that such transfer interferes
with their rights or interests.
2. The government is always an interested
party in all mat- ters involving taxable
transactions.
ARTICLE 1491
 Prohibited Sale Transaction
- from certain persons to whom
they have fiduciary relationship/
because of their position they have
a peculiar control over the said
properties or rights
(see book, Pineda)
 are also disqualified to become
lessees of the things mentioned
thereon. (Art. 1646.)
 RATIONALE: is grounded on public
policy on the view of fiduciary
relationship/ because of their position
they have a peculiar control over the
said properties or rights
: The prohibitions seek to prevent
frauds on the part of such persons and
minimize temptations to the exertion of
undue and improper influence.
: The fear that greed might get the
better of the sentiments of loyalty and
disinterestedness is the reason un-
derlying Article 1491.
: The law does not trust human (1) aliens who are disqualified to purchase
nature to resist the temptations likely to
arise out of antagonism between the
interest of the seller and buyer
 Incapacity to purchase is based on
moral grounds
 Prohibition with respect to agents
-the agent and the principal form
one juridical person
 Prohibition with respect to executors
and administrators
-refers only to properties under the
administration of the executor or
administrator at the time of the acquisition
and does not extend, therefore, to property
not falling within this class.
 Public Officials and Employees -
refers only to properties belonging to
state or any subdivision thereof or of
any government-owned or controlled
corporation or institution, (2) the
administration of which has been
entrusted to the public officials or
employees.
RATIONALE: grounded on public policy
and public order
 Judges, Justices and Lawyers
- based on public policy to prevent
the commission of fraud, and to be free
these officials from any suspicion, which
even if unfounded may cause discredit to
the judicial system
-refers only to the sale or
assignment of property subject to
litigation
-For the prohibition to operate, the
sale or assignment must take place during
the pendency of the litigation involving
the property.
PROPERTY IN LITIGATION
-Such property is “in litigation” from the
moment it became subject to the judicial
action of the judge who afterwards
purchased it.
CONSEQUENCES OF VIOLATION
- Par 1,2,3 - voidable
-Par 4.5, 6 - void ab initio
Other persons especially disqualified.
private agricultural lands (Art. XII, Secs.
3, 7, Constitution; see Krivenko vs.
Register of Deeds, 79 Phil. 461 [1947].);
(2) an unpaid seller having a right of lien or
having estopped the goods in transitu,
who is prohibited from buying the goods
either directly or indirectly in the resale
of the same at a public or private sale
which he may make (Art. 1533, par. 5;
Art. 1476[4].); and
(3) The officer conducting the execution
sale or his deputies cannot become a
purchaser, or be interested directly or
indirectly in any purchase at an execution
sale. (Sec. 19, Rule 39, Rules of Court.)
ARTICLE 1492
Prohibition extends to sales in legal
redemption, etc.
 The relative incapacity provided in
Articles 1490 and 1491 applies also to
sales by virtue of legal redemption
(see Art. 1619.), compromises, and
renunciations.
 Compromise is a contract whereby
the parties, by reciprocal concessions,
avoid a litigation or put an end to one
already commenced. (Art. 2028.) It is
the amicable settlement of a
controversy.
 By renunciation, a creditor
gratuitously abandons his right
against his creditor. The other terms
used by the law are condonation and
remission. (see Art. 1270.)
 The persons disqualified to buy
referred to in Articles 1490 and 1491
are also disqualified to become
lessees of the things mentioned
therein. (Art. 1646.)
ARTICLE 1493
(SPECIFIC THINGS)
 LOST - when it perishes, or goes out
of commerce, or disappears in such a
way that its existence is unknown or it
cannot be recovered (Art. 1189,, par
2)
 - when there is material
deterioration or complete change in the
nature of the thing that destroys its ability
 Thing entirely lost : the contract is
inexistent and void (Art. 1409[3].)
because there is no object.
 Partial lost, he may:
1. Withdraw from the contract
2. Demand the delivery of the
remaining part, for which he shall
pay its price in proportion to the total
sum agreed upon.
ARTICLE 1494
(SPECIFIC GOODS)
 Based on Sec 7 (2) of Uniform Sales
Act
 Specific goods are goods identified
and agreed upon at the time the
contract of sale was made
 Second option is applicable only if the
objects of the sale are divisible.
 Sale indivisible : buyer should be
made to pay only the proportionate
price of the remaining goods as
provided for in paragraph 2 of the
preceding article. If the sale is
indivisible, the object thereof may be
considered as a specific thing.
Chapter 4 OBLIGATIONS OF THE
VENDOR
SECTION 1. — General Provisions
ARTICLE 1495
 The principal obligations of a vendor
are:
1. to transfer the ownership of the
determinate thing sold;
2. to deliver the thing, with its
accessions and accessories, if any, in the
condition in which they were upon the
perfection of the contract (Art. 1537.);
3. to warrant against eviction and
against hidden defects (Arts. 1495, 1547.);
4. to take care of the thing,
pending delivery, with proper diligence
(see Art. 1163.); and
5. to pay for the expenses of the
deed of sale, unless there is a stipulation
to the contrary. (Art. 1487.)
 Perfection of Sale - it is important
that at the appointed time of delivery,
the seller has a right to transfer the
ownership of the thing which must be
licit (Art 1459)
 The vendor need not be the owner of
the thing at the time of perfection of
the contract; it is sufficient that he has
“a right to transfer the ownership
thereof at the time it is delivered.”
(Art. 1459.)
 When a property belonging to a
person is unlawfully taken by another,
the former has the right of action
against the latter for the recovery of
the property.
 Delivery in cases of Execution Sale
-Judgment debtor is not obliged to deliver
the property sold to the property sold to
the buyer immediately after the sale
because the debtor is given the right to
redemption.
-he can redeem the property within one
year from the registration of the sale in the
Office of the Registry of Property
-seller refuse: buyer may petition the court
for a Writ of Possession
 The buyer in execution sale is buying
only the rights of the judgment
debtor.
 The sale operates exclusively only
upon the rights of the debtor and will
not include the rights of the co-
owners in the property levied upon.
ARTICLE 1496
 Delivery is the mode of acquiring
ownership or dominion and marks the
moment of the transfer of ownership
of sale
(1) by actual or real delivery (Art.
1497.);
(2) by constructive or legal delivery
(Arts. 1498-1501.); or
(3) by delivery in any other manner
signifying an agreement that the
possession is transferred to the
vendee. (Arts. 1496-1499.)
 the critical factor which gives legal
effect to the act is the actual intention
of the vendor to deliver, and its
acceptance by the vendee
 Registered Land- act of registration
which transfers the ownership
 Tradition by operation of law
(tradicion por ministro de la ley) - Art
 777; doesnot involve sale ;
SECTION 2 - DELIVERY OF THE
THING SOLD
ARTICLE 1497
 Refers to real or actual delivery
whereby the object of the sale is
placed in the control and possession
of the vendee or his legal agent
 Actual- involves physical delivery of
the thing like the passing of a
personality from hand to hand
 Ownership acquired Upon Delivery
- ownership is a real right which the
buyer acquires only upon the delivery
of the thing to him
 Delivery without intention to transfer
on the part of the seller will not
transfer ownership
 Tradition is a derivative mode of
acquiring ownership by vir- tue 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 ac- cepts the same.
(10 Manresa 122.)
 Liability in case of loss. — When the
thing subject of the sale is placed in
the control and possession of the
vendee (Art. 1497.) or his agent, the
delivery is complete and the vendee
cannot avoid liability in case the thing
is subsequently lost without the fault
of the vendor.
 Where the buyer has not become the
owner for lack of deliv- ery, his
action is not accion reinvidicatoria
but one against the ven- dor for
specific performance or rescission,
with damages in either case.
 Consummation of contract. —
Delivery of the thing together with the
payment of the price, marks the
consummation of the contract of sale.
 Perfection of the contract - relates to
the moment when the meeting of
minds between the parties takes place.
(Art. 1475.)
 Actual or manual delivery of an
article sold is not always essential to
the passing of title thereto. (Art.
1475.) The parties to the contract may
agree when and on what conditions
the ownership in the subject of the
contract shall pass to the buyer.
ARTICLE 1498
 2 KINDS OF CONSTRUCTIVE
DELIVERY
(1) Delivery through a public document
(1st paragraph)
- ownership is transferred to the
execution of duly notarized deed of sale
- deed of conveyance = delivery
- XPN: if the parties had agreed that
ownership shall pass until certain acts
- Private instrument w/o actual delivery =
title did not pass to the vendee
Delivery by Legal Fiction
-there is no impediment that may prevent
the passing of the property from the hands
of the vendor to the vendee
-execution of contract of sale as a form of
constructive delivery
(2) Symbolic Delivery /Tradicio
symbolica
 Requisites to transfer ownership:
A. The vendor must have actual
possession over the object of the sale
B. Object must be placed under the
control of the vendor
C. Vendor intends to deliver the objects of
the sale for purposes of transferring the
ownership to the vendee.
 pledge : transfer of key = ownership
 equivalent to actual delivery only
where the thing is subject to the
control of the vendor and there is no
impediment that may prevent the
pass- ing of the property from the
hands of the vendor into those of the
vendee.
 only a presumptive delivery and is
rebutted by a strong evidence
-Such presumption is destroyed
when the delivery is not effected be- cause
of a legal impediment. Nowhere in the
Civil Code is it pro- vided that the
execution of a deed of sale is a conclusive
presump- tion of delivery of the object of
the sale.
 deemed negated by the failure of
the vendee to take actual possession
-Presumptive delivery by
execution of public instru- ment can also
be negated by failure of the vendee to take
material possession of the land subject of
the sale in the con- cept of purchaser-
owner
 INTENTION TO DELIVER IS
ESSENTIAL.
 Constructive delivery is symbolic
when to effect the delivery, the parties
make use of a token symbol to
represent the thing delivered.
ARTICLE 1499
 Applies only to movable or personal
property
 There is no principle of traditio brevi
manu be applied as when a lessee of
the land continues to possess the land
after purchasing it to the owner
 KINDS OF TRADITIO
1. Traditio Longa Manu - executed when
the vendor points to the vendee the thing
sold which at the the of the sale cannot be
transferred to the possession of the vendee
but must be withing sight of the parties
2. Traditio Brevi Manu - occurs or takes
place when the vendee is in possession of
the thing by virtue of another title and
continues to hold thereof under a title of
ownership
ARTICLE 1500
TRADITIO CONSTITUTUM
POSSESSORIUM
 This delivery consists in in the
owner’s continuous possession of the
property he had already sold to
another person but his present
possession is no longer that of an
owner but under another capacity like
that of a lessee, pledgee, etc.
 There is constructive and actual
delivery.
ARTICLE 1501
 Delivery of incorporeal
things/rights
A. By execution of public document
(symbolic)
B. Above not applicable, by placing the
title of ownership in the possession of the
vendee (quasi traditio)
C. By the vendee’s use of his rights as
owner with the consent of the vendor
(quasi traditio)
 Essence of delivery : 2 things must
concur
(1) Real intention to deliver on the
part of the seller
(2) Real intention to accept on the
part of the vendee
ARTICLE 1502
DELIVERY ON SALE OR RETURN
 Constitutes contract of sale on a
resolutory condition
 Buyer becomes the owner of the
goods and has the option to return the
goods without paying for them if he
finds them unsatisfactorily for his
needs or purpose and must be within
the period
 Buyer fails to return within the
period, the sale becomes absolute.
Risk of Loss or Deterioration
 On the buyer prior to exercise of his
option to revest the ownership of the
good to the seller
 REASON: the seller is the owner of
the goods from the time of their
delivery until the revestment of the
ownership thereof into the seller.
Second Paragraph : SALE ON TRIAL
OR APPROVAL
 Goods are delivered to the buyer but
the ownership is not transferred to
him until the sale becomes absolute
either by his approval of the
transaction or failure to return the
goods, or failure to send notice of
dissatisfaction within the period
agreed upon
 Risk or loss: on the seller because
ownership is still vested in him before
the buyer manifested his approval or
satisfaction over the goods.
CONTRACT OF SALE
-title to property is vested in the first
instance in the buyer with the option to
return the goods
CONSIGNMENT FOR SALE
-There is no such of title. The ownership
created between them is one of the
principal and the agent.
“Sale or return” distinguished from
sale on trial.
The distinctions are the following:
(1) “Sale or return” is a sale subject
to a resolutory condition, while sale on
trial is subject to a suspensive
condition;
(2) “Sale or return” depends entirely
on the will of the buyer, while sale on
trial depends on the character or quality
of the goods;
(3) In “sale or return,” the
ownership of the goods passes to the
buyer on delivery and subsequent return
of the goods reverts ownership in the
seller, while in sale on trial, the
ownership re- mains in the seller until
the buyer signifies his approval or
accept- ance to the seller; and
(4) In “sale or return,” the risk of
loss or injury rests upon the buyer,
while in sale on trial, the risk still
remains with the seller.
Note: Article 1502 uses the phrase
“on sale or return.” If the contract uses
instead the phrase “for sale or return,”
the inten- tion may be to enter into a
contract of agency.