UNIVERSITY OF SAN JOSE – RECOLETOS

School of Law
COURSE SYLLABUS

Course Title: Sales

No. of Units: 2 units

Professor: Atty. Stephanie A. Claros

I. COURSE DESCRIPTION – The Law on Sales and Lease

II. REFERENCE MATERIALS

1. Codal Provisions on the Law on Sales and Lease – Download at:

https://drive.google.com/file/d/1YHYaOC0McMc737fdRSNDUmLHpvVy9KjF/view?usp=sharing
2. Law on Sales by Cesar Lapuz Villanueva

Other Reference Books:

 Comments and Cases on Sales and Lease by Hector De Leon

 Civil Code Annotated Volume V by Edgardo Paras

III. COURSE OUTLINE

WEE TOPICS READING ASSIGNMENT

K
1 MEET AND GREET
HOUSE RULES
GRADING SYSTEM
FINAL PROJECT
ONLINE EXAM
INTRODUCTION TO THE
SUBJECT
2-4 Chapter 1. The Nature of Sale 1. Codal Provisions - Art. 1458 to Art. 1488
A. Definition of Contract of Sale 2. Chapter 1 of Villanueva
B. Essential Characteristics of a 3. Essential Characteristics of a contract of sale
contract of sale  Onerous - Gaite v. Fonacier, G.R. No. L-11827
C. Kinds of Sale July 31, 1961;
D. Elements of the Contract of  Sale is Title, Not Mode - Acap v. Court of
Sale Appeals, G.R. No. 118114, December 7, 1995
E. Stages in the Life of Sale 4. Kinds of Sale
F. Sale distinguished from other 5. Elements of the Contract of Sale - Dizon v. Court of
contracts Appeals, G.R. No. 122544, January 28, 1999
o From Donation 6. Sale distinguished from other contracts
o From Barter a. From Donation
o From Contract for a  Art. 1470, 1471
Piece of Work  Art. 725, 726, 733
o From Agency to Sell b. From Barter
or Buy  Art. 1638-1641, Art. 1468
o From Dacion en Pago  De Santos v. City of Manila, G.R. No. L-
o Dacion en Pago v. 21677, June 29, 1972
Pactum c. From Contract for a Piece of Work
commissorium  Art. 1467, Art. 1713-1731
o From Contract to Sell  Celestino Co. v. Collector of Internal
o Conditional Sale v. Revenue, G.R. No. L-8506, August 31,
Contract to Sell 1956
o Pacto de retro sales v.  Commissioner of Internal Revenue v.
Equitable mortgage v. Engineering Equipment and Supply Co.,
Pactum G.R. No. L-27044 June 30, 1975
Commissorium d. From Agency to Sell or Buy
 o From Assignment of  Art. 1466
Credit  Quiroga v. Parsons Hardware, G.R. No.
L-11491, August 23, 1918
 Gonzalo Puyat & Sons, Inc. v. Arco
Amusement Company, G.R. No. L-
47538, June 20, 1941
e. From Dacion en Pago – Art. 1245
 Mamerta Vda. De Jayme v. Court of
Appeals, G.R. No. 128669, October 4,
2002
 SSS v. Atlantic Gulf and Pacific
Company of Manila, G.R. No. 175952,
April 30, 2008
f. Dacion en Pago v. Pactum Commissorium -
 Art. 2088
 Spouses Pen v. Spouses Julian, G.R. No.
160408, January 11, 2016
g. From Contract to Sell
 Spouses Beltran v. Spouses Cangayda,
G.R. No. 225033, August 15, 2018
h. Conditional sale v. Contract to Sell
 Ventura v. Heirs of Spouses Endaya,
G.R. No. 190016, October 2, 2013
 Spouses Roque v. Aguado et al, G.R. No.
193787, April 7, 2014
i. Pacto de retro sales v. Equitable mortgage v.
Pactum Commissorium
 Sale with a right to repurchase – Art.
1601 to 1618
 Equitable mortgage – Art. 1602
 Ramos v. Sarao, G.R. No. 149756,
February 11, 2005
j. From Assignment of Credit - Lo v. KJS Eco-
Formwork System Phil., G.R. No. 149420,
October 8, 2003

5 Chapter 2. Parties of Sale 1. Codal Provisions – Art. 1489-1492

 General Rule on Capacity of
Parties
 Minors, Insane or Demented
Persons, Deaf-Mutes
 Sales By and Between
Spouses
 Specific Incapacity Mandated
By Law
2. Chapter 2 of Villanueva
3. General Rule on Capacity of Parties
 Art. 37-39, Civil Code
4. Minors, Insane or Demented Persons, Deaf-Mutes
 Art. 1489
 Chapter 7, Title II, Book IV of the Civil Code –
Arts. 1390-1402
 Sale of Real Property by Minors Who Pretended
to be of Age - Mercado and Mercado vs.
Espiritu, G.R. No. L-11872, December 1, 1917
 Senility/Advanced Age - Paragas v. Heirs of
Dominador Balacano, G.R. NO. 168220, August
31, 2005
5. Sales By Spouses
 Art. 73, Family Code; Ayala Investment v. Court
of Appeals, G.R. No. 118305, February 12, 1998
 Art. 96 and 124 of the Family Code
 Civil Code Provisions on Administration and
Sale by Spouses – Art. 166-174, Civil Code
 Exception to Art. 166, Civil Code - Abalos v.
Macatangay, Jr., G.R. No. 155043, September
30, 2004
 Application of Family Code Provisions to Sales
Made by Spouses Married Under the Civil Code

6 Chapter 3. Subject Matter
 Requisites of Valid Subject
Matter
- Art. 105 and 256 of the Family Code; Fuentes
v. Roca, G.R. No. 178902, April 21, 2010
6. Sale Between Spouses
 Article 1490 and 1492
7. Specific Incapacity Mandated By Law
 Article 1491 and 1492
 Rubias v. Batiller, G.R. No. L-35702, May 29,
1973
 Alien as Buyers of Land - Frenzel v. Catito, G.
R. No. 143958, July 11, 2003
1. Codal Provisions - Art. 1459 to 1465, 1481
2. Chapter III of Villanueva
3. Requisites of Valid Subject Matter
 Possible Thing
 Art. 1461,
 Art. 1462
 Art. 1465
 Art. 1347
 Art. 1409(3)
 Harmonization – Spouses Villaluz v. Land
Bank of the Phils., G.R. No. 192602,
January 18, 2017
 Licit Thing – Art. 1459
 Sale of Inheritance - Acap v. Court of
Appeals, G.R. No. 118114, December 7,
1995
 Arts. 1409-1422 – (Void and Inexistent
Contracts)
 Determinate Thing
 Art. 1460
 Formula - Melliza v. City of Iloilo, G.R. No.
L-24732, April 30, 1968
 Mistake in Designation - Atilano v. Atilano,
G.R. No. L-22487, May 21, 1969
 On Quantity –
 National Grains Authority v.
Intermediate Appellate Court, G.R.
No. 74470 March 8, 1989;
 Johannes Schuback & Sons Phil.
Trading Corp. v. Court of Appeals,
G.R. No. 105387, November 11,
1993;
 Generic Non-Determinable Objects – Art.
1246, Civil Code; Yu Tek & Co. v.
Gonzales, G.R. No. L-9935, February 1,
1915
4. Consequence when there is lacking requisite for
valid subject matter
 Void contract v. No Contract v. Illegal contract
5. Other subject matter of sales
 Sale of Undivided Interest – Art. 1463
 Sale of Share in Specific Mass – Art. 1464; Gaite
v. Fonacier, G.R. No. L-11827, July 31, 1961
6. Seller’s Obligation to transfer ownership -
 Art. 1459, second paragraph
 Art. 1505
 Nool v. Court of Appeals, G.R. No. 116635, July
24, 1997
 Quijada v. Court of Appeals, G.R. No. 126444,
December 4, 1998

8 PRELIM EXAMS
9 Chapter 4. Price and Other
Consideration
 Meaning of Price
 Requisites for Valid Price
 Real v. Simulated v. False
 Fixing of the Price
 When Price is
Unascertainable
 Adequacy of price
 When no price agreed is
agreed upon
 Manner of payment
 Payment of the Price
 Non-Payment of Price
 Price Regulation
10 Chapter 5. Formation of Sale
 Stages in the Life of Sale
 Policitacion Stage
 Option
 Right of first refusal
 Perfection Stage
 Earnest money
 Form of Sales
 Exception: Cavite Development Bank v. Spouses
Cyrus Lim, G. R. No. 131679 - February 1, 2000
 Subsequent Acquisition of Title by the Seller -
Art. 1462 in relation to Art.1434
PRELIM EXAMS
1. Chapter 4 of Villanueva
2. Arts. 1469-1474
3. Meaning of Price
4. Requisites for a Valid Price
5. First Requisite: Real – Peñalosa v. Santos, G.R. No.
133749, August 23, 2001
 False price, Rule on Accommodation - Mate
v. Court of Appeals, G.R. No. 120724-25,
May 21, 1998
6. Second Requisite: In Money or its Equivalent
7. Third Requisite: Price Certain – Art. 1469 and Art.
1472
8. Fixing of the price - Article 1473
9. When Price is Unascertainable (Art. 1474)
10. Adequacy of Price
 Inadequacy of Price – Art. 1355 and Art.
1381
 Judicial Sales; When Sale is Void Due to
Inadequacy of Price - Tayengco v. CA, G.R.
No. L-17385. November 29, 1965
o Exception to the Exception - De Leon
v. Salvador, G.R. No. L-30871.
December 28, 1970
 Nominal Price - Ong v. Ong, G.R. No. L-
67888 October 8, 1985;
 Gross Inadequacy of Price – Art. 1470
 Gross Inadequacy v. Simulated Price -
Bravo-Guerrero v. Bravo, G.R. No. 152658,
July 29, 2005
11. Manner of payment - Toyota Shaw v. Court of
Appeals, G.R. No. L-116650, May 23, 1995
 Raet v. Court of Appeals, G.R. No. 128016
September 17, 1998
12. Payment of the Price
 Receipt as Proof of Contract of Sale -
Leabres v. Court of Appeals, G.R. No. L-
41847, December 12, 1986; Coronel v. CA,
G.R. No. 103577 October 7, 1996; Tigno v.
Aquino, G.R. NO. 129416, November 25,
2004
13. Non-Payment of the Price
14. Price Regulation
 R.A. 7581 – Price Act of 1992
1. Chapter 5 of Villanueva
2. Policitacion Stage
 Art. 1319 – Art. 1326
 Promise to buy or sell - Art. 1479
 Ang Yu Asuncion v. Court of Appeals, G.R.
No. 109125 December 2, 1994
3. Option – Art. 1324 and Art. 1479
 Contract of Sale v. Option Contract – Adelfa
Properties v. Court of Appeals, G.R. No.
111238 January 25, 1995
 When option money is considered as
 evidence of perfected sale - Cavite
Development Bank v. Spouses Cyrus Lim,
G. R. No. 131679 - February 1, 2000
 Separateness of consideration - Villamor v.
Court of Appeals, G.R. No. 97332 October
10, 1991
 Consideration for the option
 Option without separate consideration –
Sanchez v. Rigos; G.R. No. L-25494 June
14, 1972
 Rules when a period is given to the offeree
within which to accept the offer - Ang Yu
Asuncion v. Court of Appeals, G.R. No.
109125 December 2, 1994
 Option period – Villamor v. Court of
Appeals, G.R. No. 97332 October 10, 1991;
Carceller v. Court of Appeals, G.R. No.
124791. February 10, 1999
4. Right of First Refusal
 Right of first refusal distinguished from
contract of sale, contract to sell, and option
contract - Ang Yu Asuncion v. Court of
Appeals, G.R. No. 109125 December 2,
1994
 Form - Sen Po Ek Marketing Corp. v.
Martinez, G.R. No. 134117. February 9,
2000
 Remedy for violation of right of first refusal:
Guzman, Bocaling & Co. v. Bonnevie, G.R.
No. 86150 March 2, 1992; Ang Yu Asuncion
v. Court of Appeals, G.R. No. 109125
December 2, 1994; Equatorial Realty Dev.,
Inc. v. Mayfair Theater, Inc., G.R. No.
106063 November 21, 1996: Parañaque
Kings Enterprises, Inc. v. Court of Appeals,
G.R. No. 194638, July 02, 2014
5. Perfection Stage
 Perfection - Arts. 1319, 1475, 1476
 Requisites for Perfection
 Certain offer
 Absolute acceptance
 When Deviation is allowed in Acceptance -
Villonco v. Bormaheco, G.R. No. L-26872
July 25, 1975
6. Earnest money
 Earnest money - Art.1482
 Earnest money given as guarantee - Spouses
Doromal, Sr. v. Court of Appeals, G.R. No.
L-36083 September 5, 1975
 Failure to return earnest money - First
Optima Realty Corp. v. Securitron Security
Services, Inc., G.R. No. 199648, January 28,
2015
7. Formalities of the contract –
 Validity v. Enforceability - Art. 1483, Art.
1358
 Unenforceable contracts - Art. 1403 to 1408,
 Remedy for Unenforceable Contracts – Art.
1406 in relation to Art. 1357
 When Form Affects Validity - Art. 1874;
Art. 1581;
  Effect of Defective Notarization - Meneses
v. Venturozo, G.R. No. 172196, October 19,
2011

10-11 Chapter 6. Performance or 1. Chapter 6 of Villanueva

Consummation of Sale
 Obligations of Seller
 Tradition as a Consequence
of a Valid Sale
 Effects and Completeness of
Delivery
 Double Sales
 Obligations of Buyer
2. Obligations of the Seller
 Art. 1458
 Art. 1163; Art. 1521 last paragraph
 Art. 1164 v. Art. 1537;
 Art. 1495
 Art. 1487
3. Delivery – Art. 1497-1501
 Kinds of delivery
 Consequence of delivery - Art. 1477
 Delivery through carrier – Art. 1523
4. Place of delivery – Art. 1521
5. Time of delivery – Art. 1521
6. Delivery when goods are held by a third party – Art.
1521
7. Accuracy of delivery –
 Personal property – Art. 1481, Art. 1522
 Real property – Art. 1539-1543
 Lump-sum sale of immovables with
description of area as “more or less” -
Exception to Art. 1542 - Roble v. Arbasa,
G.R. No. 130707, July 31, 2001
 Rule when there is no agreement on unit
price nor lump-sum – Santa Ana v.
Hernandez, G.R. No. L-16394, December
17, 1966
8. Delivery by installment – Art. 1583
9. When the seller is not bound to deliver – Art. 1524
10. Effects and completeness of delivery – Art. 1477,
1496
11. Delivery without transfer of ownership –
 Art. 1478, 1503(1)
 Contract to Sell - Spouses Beltran v. Spouses
Cangayda, G.R. No. 225033, August 15,
2018; Ventura v. Heirs of Spouses Endaya,
G.R. No. 190016, October 2, 2013; Spouses
Roque v. Aguado et al, G.R. No. 193787,
April 7, 2014
 Oral contract to sell – Spouses Tumibay v.
Spouses Lopez, G.R. No.171692, June 3,
2013
 Proof of contract of to sell – City of Cebu v.
Candido Rubi, G.R. No. 128579, April 29,
1999
 What happens to the Contract to sell when
Deed of Absolute Sale is executed – Spouses
Lumbres v. Spouses Tablada, Jr., G.R. No.
165831, February 23, 2007
 Art. 1503
 Art. 1502(2)
12. Double sales
 Elements of Double Sale – Cheng v. Genato,
G.R. No. 129760, December 29, 1998
 Rules of Preference – Art. 1544
 Good faith of the second buyer - Uraca v.
Court of Appeals, G.R. No. 115158,
September 5, 1997

11 Chapter 7. Documents of Title
 Definition
 Purpose of documents of title
 Negotiable documents of title
 Non-negotiable documents of
title
 Warranties of seller of
documents of title
 Rules on levy/garnishment of
goods
12 MIDTERM EXAMS
13 Chapter 8. Sale By A Non-Owner Or
By One Having Voidable Title: The
“Life” Of A Contract Of Sale
 Consequence When Seller Is
Not Owner of The Subject
Matter
 Exceptions To Rules On
Legal Effects Of Sale By A
Non-Owner
 Good faith of the first buyer – Carbonell v.
Court of Appeals; G.R. No. L-29972 January
26, 1976
 Good faith; Annotation of lis pendens –
Coronel v. CA, G.R. No. 103577 October 7,
1996
 Registration under PD 1529 is superior over
registration under Act 3344 - Naawan
Community Rural Bank, Inc. v. Court of
Appeals, G.R. No. 128573. January 13, 2003
 Rule for unregistered land
i. Non-applicability of Art. 1544 to
unregistered lands – Naval v. Court
of Appeals, G.R. No. 167412,
February 22, 2006
ii. Sec. 33, Rule 39, Rules of Court v.
Art. 1544 – Carumba v. CA, G.R.
No. L-27587, February 18, 1970;
iii. Dagupan Trading Co. v. Macam,
G.R. No. L-18497, May 31, 1965
iv. Act 3344, Third party with a better
right - Spouses Sabitsana v.
Muertegui, G.R. No. 181359, August
5, 2013; Radiowealth Finance Co. v.
Palileo, G.R. No. 83432, May 20,
1991
13. Obligations of the Buyer
 Art. 1582 to 1589
1. Chapter 7 of Villanueva
2. Documents of Title – Art. 1507-1520
3. Definition - Art. 1636
4. Purpose of documents of title
5. Negotiation by delivery - Art. 1508
6. Negotiation by delivery and indorsement – Art.
1509
7. Effect of placing non-negotiable words on
negotiable documents of title – Art. 1510
8. Transfer/Assignment of non-negotiable documents –
Art. 1511 and 1515
9. Who may negotiate – Art. 1512
10. What is acquired by negotiation – Art. 1513
11. What is acquired from the transfer of non-negotiable
documents of title – Art. 1514
12. Warranties of seller of documents of title - Art. 1516
13. Liability of indorsers – Art. 1517
14. Effect of breach of duty, loss, theft, fraud, accident,
mistake, duress, or conversion on the validity of the
negotiation to a holder in due course – Art. 1518
15. Rules on levy/garnishment of goods - Arts. 1519 and
1520
MIDTERM EXAMS
1. Chapter 8 of Villanueva
2. Sale by a person not the owner at time of delivery
 Arts. 1462, 1505, 145
3. Sale by a person with voidable title – Art. 1506
4. Exceptions
 Sale at merchant store –
 Art. 559 and Art. 539
 Art. 1506 v. Art. 559 - Aznar v. Yapdiangco,
G.R. No. L-18536, March 31, 1965
 EDCA Publishing & Distributing Corp. v.

13 Chapter 9. Loss and Deterioration,
Fruits and Other Benefits
 Rule Before Perfection
 Rule At the Time of
Perfection
 Rule After Perfection But
Before Delivery
 Rule After Delivery
14 Remedies of Parties
Remedies in Case of Movables
 Ordinary Remedies of the
Seller
 Special Remedies of the
“Unpaid Seller” of Goods
 Remedies of the Buyer
 Recto Law: Sales Of
Movables On Installments
 Lease With Option To
Purchase
Remedies in Case of Immovables
 Remedies of the Seller
 Remedies of the Buyer
 Sale of Immovables in
Installment (Maceda Law)
 The Subdivision and
Condominium Buyers'
Protective Decree (P.D. 957)
 The Condominium Act (R.A.
4726)
 Cancellation of Judicial Sale
14 Remedies of Rescission and
Cancellation for Immovables:
Contract of Sale versus Contract to
Sell
 Remedy Of Rescission Or
Resolution
 Contract Of Sale Versus
Contract To Sell
 Governing Provisions And
Santos, G.R. No. 80298, April 26, 1990
1. Chapter 9 of Villanueva
2. Rules on Loss, Deterioration and Improvements –
 Art. 1480 referring to Art. 1163-1165 and
Art. 1262
 Art. 1493-1494
 Art. 1504
 Art. 1538 referring to Art. 1189
3. Rule before perfection
4. When loss occurred before perfection
5. When loss occurred at time of perfection (Arts. 1493
and 1494)
6. When loss occurred after perfection but before
delivery
7. When ownership is transferred (Art. 1504)
1. Chapter 10 of Villanueva
2. Remedies in Case of Movables
3. Remedies of the Seller - Arts. 1636, 1594)
4. Special Remedies of Unpaid Seller
5. Remedies of the Buyer
6. Recto Law: sale of movables on installment (Arts.
1484-1486)
 Levy Hermanos, Inc. v. Gervacio, G.R. No. L-
46306, October 27, 1939
 Cruz v. Filipinas Investment & Finance Corp., G.R.
No. L-24772, May 27, 1968
 Borbon II v. Servicewide Specialists, Inc., G.R. No.
106418, July 11, 1996
 PCI Leasing and Finance, Inc. v. Giraffe-X Creative
Imaging, Inc., G.R. No. 142618, July 12, 2007
7. Lease with Option to Purchase
Remedies in Case of Immovables
1. Remedies of the Seller
 Remedy for breach of reciprocal obligation -
Article 1191
o Art. 1191 v. Art. 1381 – Spouses Cannu
v. Spouses Galang, G.R. NO. 139523,
May 26, 2005
 Rescission of Deed of Absolute Sale of
Immovable - Article 1592
 Delay in payment - Spouses Beltran v. Spouses
Cangayda, G.R. No. 225033, August 15, 2018
2. Remedies of the Buyer
3. Sale of Immovables in Installment (Maceda Law)
4. The Subdivision and Condominium Buyers'
Protective Decree (P.D. 957)
5. The Condominium Act (R.A. 4726)
6. Cancellation of Judicial Sale
1. Chapter 11 of Villanueva
2. Article 1191 v. Art. 1592
 Principles For Remedies Of
Rescission And Cancellation
14 Conditions and Warranties
 Conditions
 Distinctions between
Conditions and Warranties
 Express warranties
 Implied warranties
 Implied warranties in Sale of
Goods
 Additional Terms of
Warranties for Consumer
Goods
15 Extinguishment of Sale
 Causes
 Conventional redemption
 Equitable mortgage
 Distinguished from option to
buy
 Period of redemption
 Exercise of the right to
redeem
 Legal redemption
15 Assignment of Credit
 Nature of Assignment
 Assignment of Credit v. Sale
 Assignment of Credit v.
Subrogation
 Assignment of Credit in
Litigation
 Assignment as an Equitable
Mortgage
16 LEASE
 Nature of Lease
 Lease Distinguished from
Other Contracts
o Sale in installment v.
lease with option to buy
o Financial lease v. sale of
personal property on
installment/lease with
option to purchase
 Lease of things
 Lease of work or services
 Lease of rural and urban
lands
 Qualified persons
 Registration
 Prohibitions
 Rights and obligations of
lessor and lessee
1. Chapter 12 of Villanueva
2. Conditions
3. Distinctions between Conditions and Warranties
4. Express warranties
5. Implied warranties
6. Implied warranties in Sale of Goods
7. Additional Terms of Warranties for Consumer
Goods
1. Chapter 13 of Villanueva
2. Causes (Arts. 1600, 1231)
3. Conventional redemption (Art. 1601)
4. Equitable mortgage (Arts. 1602-1604)
5. Distinguished from option to buy (Art. 1602)
6. Period of redemption (Art. 1606) 22
 Cebu State College of Science and
Technology v. Misterio, G.R. No. 179025,
June 17, 2015
7. Exercise of the right to redeem (Art. 1616)
8. Legal redemption (Art. 1619)
1. Codal provisions: Arts. 1624-1635 of the Civil Code
2. Chapter 14 of Villanueva
3. Assignment v. Sale - Project Builders, Inc. v. Court
of Appeals, G.R. No. 99433. June 19, 2001
4. Assignment as Equitable Mortgage - Development
Bank of the Philippines v. Court of Appeals, G.R.
No. 118342 January 5, 1998
1. Codal Provisions on the Law on Lease
2. Nature of Lease
3. Lease Distinguished from Other Contracts
a. Sale in installment v. lease with option to
buy
b. Financial lease v. sale of personal property
on installment/lease with option to purchase
4. Lease of things
5. Lease of work or services
6. Lease of rural and urban lands
7. Qualified persons
8. Registration
9. Prohibitions
10. Rights and obligations of lessor and lessee
11. Remedies
a. Rescission – Art. 1191 v. Art. 1659

III. CLASS STANDING

Attendance - 20
ID and Blazer - 20
Oral recitations - 20
Class assignments - 20
Final Project - 20

IV. FINAL GRADE

Prelims - 25%
Midterms - 25%
Finals - 25%
Class Standing - 25%