SALES -1458 – 1641 *In COS, the buyer pays the price; in ATS, the

agent delivers the price which in turn he got

ARTICLE 1458 – MEANING OF SALE
from the buyer;
CONTRACT OF SALE – is a contract where
*In COS, the buyer after delivery becomes the
one party obligates himself to transfer the
owner; In ATS, the agent who is supposed to
ownership of and to deliver a determinate
sell does not become the owner, even if the
thing, while the other party obligates himself to
property has already been delivered to him;
pay for said thing a price certain in money or
its equivalent. *In COS, the seller warrants; In ATS, the agent
who sells assumes no personal liability ass long
*the vendor need not be the owner at the time
as he acts within his authority and in the name
the sale is perfected; It is sufficient that he is
of the principal;
the owner at the time the thing sold is
delivered; 1467 – RULE TO DETERMINE IF THE
CONTRACT IS ONE OF SALE OR A
CONTRACT OF SALE VS. CONTRACT TO
CONTRACT FOR A PIECE OF WORK
SELL
*SALE – I ordered in the ordinary course of
*In a Contract of Sale, the non-payment of
business;
price is a resolutory condition; while in a
Contract to Sell, the payment in full of the price *CONTRACT FOR PIECE OF WORK – it is
is a positive suspensive condition; manufactured specially and not for the market
price of work contract;
*In Contract of Sale, title over the property
generally passes to the buyer upon delivery; 1468 – RULES TO DETERMINE WHETHER
while in a Contract to Sell, ownership is CONTRACT IS ONE OF SALE OR BARTER
retained by the seller, regardless of delivery
1) If the thing is more valuable than money
and is not to pass until full payment of the
– BARTER;
price;
2) If 50 – 50 – SALE;
*In Contract of Sale, after delivery has been 3) If the thing is less valuable than the
made, the seller lost ownership and cannot money – SALE
recover it unless the contract is resolved or
*HOWEVER, it would still depend on the
rescinded; while in a Contract to Sell, since the
INTENTION OF THE PARTIES; rules will only
seller retains ownership, despite delivery, he is
apply if intention is NOT CLEAR;
enforcing and not rescinding the contract if he
seeks to oust the buyer for failure to pay; 1469 – CERTAINTY OF THE PRICE
“NEMO DAT QUAD NON HABET” – *Price must be certain; there can be no sale
nobody can dispose of that which does not without a price;
belong to him;
*However, failure to pay the agreed price DOES
“Emptio Rei” – sale of an expected thing; NOT CANCEL a sale for lack of consideration,
for the consideration is still there, namely, the
“Emptio Spei” – sale of hope itself.
price.
1464 – SALE OF SHARE IN A SPECIFIC MASS
1470 – EFFECT OF GROSS INADEQUACY IN
1465 – SALE OF THINGS SUBJECT TO A PRICE
RESOLUTORY CONDITION
GR: SALE IS VALID
1466 – CONTRACT OF SALE VS. AGENCY TO
SELL
*However, if the price is so inadequate as to
shock the conscience of the Court, it will be set
aside;
1471 – SIMULATED PRICE
*If the price is SIMULATED, the sale is void,
but the act may be shown to have been in
reality a DONATION, OR SOME OTHER ACT
OR CONTRACT;
1472 – CERTAINTY OF PRICE OF
SECURITIES
1473 – PRICE CANNOT BE LEFT TO ONE
PARTY’S DISCRETION
1474 – EFFECT IF THE PRICE CANNOT BE
DETERMINED
*SALE IS VOID;
1475 – NATURE OF CONTRACT
*Consensual – delivery is not essential for
perfection;
*It is only consummated upon delivery and
payment;
*Mere PERFECTION of the contract does not
transfer ownership; Ownership of the object
sold is transferred only after delivery, actual,
legal or constructive; AFTER DELIVERY OF
THE OBJECT, OWNERSHIP IS
TRANSFERRED
1476 – SALE BY AUCTION
WHEN PERFECTED:
1) Auctioneer announces its perfection by
the fall of the hammer or in other
customary manner;
2) BEFORE THE HAMMER FALLS:
a. Bidder may still retract his bid
b. Auctioneer may also withdraw
the goods from the sale;
WHEN SELLER MAY EMPLOY OTHER TO
BID FOR HIM
1) Right to bid was reserved;
2) Notice was given that the sale by auction
is subject to a right to bid on behalf of
the seller
1477 -WHEN OWNERSHIP IS
TRANSFERRED
*upon actual or constructive delivery;
1478 - WHEN OWNERSHIP IS NOT
TRANSFERRED DESPITE DELIVERY
1479 – MUTUAL PROMISE VS. ACCEPTED
UNILATERAL PROMISE
1480 – WHO BEARS THE RISK OF LOSS
*BEFORE PERFECTION – SELLER;
*AFTER DELIVERY – BUYER;
*AFTER PERFECTION BEFORE DELIVERY -
BUYER
GENUS NUNQUAM PERIT – genus does
not perish; therefore, if the object of a contract
is GENERIC seller bears the risk
“FUNGIBLES” – are personal property which
may be replaced with equivalent things
1481 – SALE BY DESCRIPTION OR BY
SAMPLE
*IF BY SAMPLE – It may be rescinded;
*IF BY SAMPLE AND DESCRIPTION – not
sufficient that the bulk of goods correspond
with the sample if they do not correspond with
the description;
1482 – EARNEST MONEY
*something of value to show that the buyer was
really in earnest, and given to the seller to bind
the bargain;
SIGNIFICANCE:
1) Part of the purchase price;
2) As proof of the perfection of the
contract;
1483 – STATUTE OF FRAUDS/FORM OF
CONTRACT OF SALE
1484 – SALE BY INSTALLMENT –
PERSONAL PROPERTY
REMEDIES:
1)Exact Fulfillment of the obligation,
should the vendee fail to pay;
2) Cancel the sale should the vendee’s
failure to pay cover 2 or more
installments;
3) Foreclosure the chattel mortgage on
the thing sold, if one has been
constituted, should the vendee’s failure
to pay cover 2 or more installments.
*resorting to no. 3, the seller will forfeit further
action against the buyer to recover any unpaid
balance of the price;
REQUISITE BEFORE 1484 BE APPLIED:
1)there must be a contract;
2)The contract must be of sale;
3)the object of the contact is a personal
property;
4) sale must be on installment plan;
***If the sale is for cash or on straight terms,
wherein after an initial payment, balance is
paid in its totality at the time specified, say, 2
or 3 months, IT IS STILL CONSIDERED A
CASH SALE;
REASON FOR THIS ARTICLE: to prevent
abuse in the foreclosure of chattel
mortgages by selling at a low price and
then suing for deficiency;
*Remedies are ALTERNATIVE; meaning
the election of one is a waiver of the right to
resort to others;
WHEN NOT APPLIED:
1) To a real estate mortgage;
2) To a sale of personal property on
straight terms;
1485 – REASON FOR RULE ON LEASES OF
PERSONAL PROPERTY WITH OPTION TO
BUY
*this is really considered a sale of personal
property in installments; therefore, the purpose
is to prevent an indirect violation of Art.1484
1486 – NON-RETURN OF INSTALLMENTS
PAID
GR: it is required that a case of rescission or
cancellation of the sale requires MUTUAL
RESTITUTION;
EXPN: It is valid that there should be no
returning of the price that has been partially
paid or of the rents given, provided the
stipulation is not UNCONSCIONABLE
REALTY INSTALLMENT BUYER
PROTECTION ACT - MACEDA LAW
*to help the low-income lot buyers against
onerous and oppressive conditions;
*The act provided for the rights of the buyer in
case of default in the payment of succeeding
installments, where he has already paid at least
2 years of installment;
*INDUSTRIAL LOTS, COMMERCIAL
BUILDINGS & SALES TO TENANTS are
EXCLUDED;
RIGHTS OF BUYER IN CASE OF DEFAULT
(PROVIDED HE PAID AT LEAST 2 YEARS OF
INSTALLMENTS):
1)Pay, without additional interest, the
unpaid installments due within the total
grace period earned;
a) Grace period is fixed at the rate of 1
month for every year of installment paid;
*this right shall be exercised by the buyer only
once in every 5 years of the life of the contract;
2)If contract I cancelled, the seller shall
refund to the buyer the CASH
SURRENDER VALUE OF THE
PAYMENTS ON THE PROPERTY;
a) CASH SURRENDER VALUE = 50%
of the total payments made;
 i)after 5 years of installment,
additional 5 percent every year but not to
exceed 90% of the total payments made;
*ACTUAL CANCELLATION shall take place
after 30 days after the receipt by the buyer of
the NOTICE OF CANCELLATION OR
DEMAND FOR RESCISSION BY NOTARIAL
ACT AND UPON FULL PAYMENT OF THE
CASH SURRENDER VALUE;
3) If installment is LESS THAN 2 YEARS,
the seller shall give the buyer a grace
period of not less than 60 days;
a) after 30 days from the receipt by the
buyer of the notice of cancellation or the
demand for rescission, the seller may cancel
the contract;
***DOWNPAYMENTS, DEPOSITS OR
OPTIONS ON THE CONTRACT shall be
included in the computation of the total
number of installments made;
1487 – WHO PAYS FOR EXPENSES IN
EXECUTION AND REGISTRATON
GR: VENDOR
EXPN: stipulation to the contrary;
1488 – NATURE OF EXPROPRIATION
*governed by special laws;
CAPACITY TO BUY OR SELL
1489 - INCAPACITY TO BUY MAY BE
ABSOLUTE OR RELATIVE
1490 – INCAPACITY OF HUSBAND AND
WIFE TO SELL TO EACH OTHER
REASON: to avoid prejudice to 3rd persons; to
prevent one spouse from unduly influencing
the other;
EXPNS:
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 Article 191;
A husband sold his land to his wife. Later, he
borrowed money from C. The loan matured.
When C discovered that the husband did not
have any cash or any other property, he
decided to question the sale that had previously
been made in favor of the wife. Do you think
said creditor can go after such property?
ANS.: No, for he was not yet a creditor at the
time the transaction took place. Therefore, it
cannot truthfully be said that he had been
prejudiced by the sale. It would have been
different if at the time the sale was affected, he
was already a creditor.
1491 – PERSONS RELATIVELY
INCAPACITATED TO BUY
REASON: Public Policy prohibits the
transactions in view of the fiduciary
relationship involved;
STATUS OF SALE: VOIDABLE
1492 – APPLICABILITY OF RELATIVE
INCAPACITY TO LEGAL REDEMPTION,
COMPROMISES AND RENUNCIATION
EFFECTS OF THE CONTRACT WHEN
THE THING SOLD HAS BEEN LOST
1493 – LOSS OF OBJECT BEFORE SALE
COMPLETE LOSS BEFORE PERFECTION OF
CONTRACT: CONTRACT IS VOID
PARTIAL LOSS:
1) WITHDRAWAL;
2) SPECIFIC PERFORMANCE AS TO
REMAINDER BY PAYMENT OF
PROPORTIONAL PRICE;
1494 – LOSS OF SPECIFIC GOODS
*IF specific goods, without the knowledge of
the seller;
-perished;
-deteriorated in quality as to be
substantially changed in character;
REMEDIES:
 1) CANCELLATION;
2) SPECIFIC PERFORMANCE AS TO THE
REMAINING EXISTING GOODS;
OBLIGATION OF THE VENDOR
1495 – OBLIGATIONS OF VENDOR
1) Transfer ownership;
2) Deliver;
3) Warrant the object sold;
4) Preserve the thing from perfection to
delivery; otherwise, he can be held liable
for damages
1496 – OWNERSHIP IS TRANSFERRED
ONLY BY DELIVERY
GR: OWNERSHIP IS TRANSFERRED ONLY
WHEN THERE IS DELIVERY
KINDS OF DELIVERY
1497: REAL OR ACTUAL DELIVERY; wherein
the control and possession of the object is
placed in the vendee;
CONSTRUCTIVE DELIVERIES
1498: LEGAL FORMALITIES – applies to real
and personal property since the law does not
distinguish
1498: TRADITION SYMBOLICA (delivery of
the key of the place where the movable sold is
being kept;
1499: TRADITION LONGA MANU (by mere
consent, if the movable sold cannot yet be
transferred to the possession of the buyer at the
time of the sale);
1499: TRADITION BREVI MANU – buyer had
already the possession of the object even before
the purchase;
1500: TRADITIO CONSTITUTUM
POSSESSORIUM – possession as owner
changed; from owner to lessee
1501: QUASI-TRADITION – delivery of rights,
credits, or incorporeal property, made by
placing titles of ownership in the hands of a
lawyer or allowing the buyer to make use of the
rights;
A has sold a piano to B by private
instrument for P500, 000. Who had
ownership of the piano at the moment
next after B had paid the P500,000 to A?
Explain your answer.
ANS.: At the moment next after B had paid the
P500,000 to A, ownership over the piano still
resided in A, the execution of the private
instrument not being a mode of transferring
ownership (unless of course there had been
mutual agreement –– longa manu — on the
transfer of ownership). Payment of the price
without tradition or delivery is not a mode of
acquiring ownership over the piano
1502 – ON SALE OR RETURN/FOR TRIAL
*SALE WITH A RESOLUTORY CONDITION –
the buyer became the owner upon delvery;
however buyer may revest ownership by
returning or tendering the object to the seller
within the time fixed by the contract; if not
fixed, within a reasonable time
*SALE WITH A SUSPENSIVE CONDITION
1503 – RESERVATION OF OWNERSHIP
DESPITE DELIVERY
1504- RISK OF LOSS
GR: SELLER’S RISK
1505 – BUYER ACQUIRES MERELY THE
SELLER’S RIGHTS
GR: NEMO DAT QUOD NON HABET
EXPN: ESTOPPEL
1506 – EFFECT IF SELLER HAS ONLY A
VOIDABLE TITLE
*BUYER ACQUIRES A GOOD TITLE TO THE
GOODS; provided the contract has not been
annulled;
1507 – 1520: DOCUMENTS OF TITLE
1521: TIME AND PLACE OF DELIVERY
PLACE OF DELIVERY; ORDER OF
PRIORITY
i.Place Stipulated By The Parties; express or
implied in the contract;
ii.Place Dictated By Usage Of Trade; provided
by a positive law/ established by custom/
tradition through continued observance;
iii.Place Of Business Of The Seller;
iv.The Place Where The Seller Resides;
v.The Place Where Specific Goods Are;
TIME OF DELIVERY
a)Agreed TIME; may be express or implied;
b)Reasonable TIME; when NO time for sending
is fixed.
•What constitutes reasonable time is
dependent on the circumstances availing both
on the part of the seller and the buyer.
c) FIXED Time; parties contemplated that
obligation to deliver is with a period but it has
not been fixed – PARTIES should fixed it, then
COURT should fix it for them in case they fail
to fix it.
WHO BEARS THE EXPENSES OF
PUTTING GOODS INTO A
DELIVERABLE STATE?
GENERAL RULE: The seller bears the
expenses of and incidental to putting the goods
into a deliverable state.
EXCEPTION: Unless otherwise agreed
1522:RULES WHEN QUANTITY IS
LESS/MORE THAN AGREED UPON;
WHEN QUANTITY IS LESS THAN AGREED
UPON:
1) Buyer may reject; or
2) Buyer may ACCEPT what have been
delivered at the contract rate;
WHEN QUANTITY IS MORE THAN THE
AGREEMENT:
1) Buyer may reject ALL;
2) May accept the goods agreed upon and
reject the rest;
3) If he gets all, he must pay for them at the
contract rate;
RULE WHEN QUALITY IS DIFFERENT:
1) Buyer may accept the goods which are in
accordance with the contract; and
2) Reject the rest
1523: WHEN DELIVERY TO CARRIER IS
DELIVERY TO BUYER
1524: WHEN VENDOR IS NOT BOUND TO
DELIVER
1) If the vendee has not paid the price;
2) If no period for the payment has been
fixed in the contract;
3) If the vendee has lost the right to make
use of the period and still refuses to pay;
UNPAID SELLER 1525 – 1535
1525: WHO IS AN UNPAID SELLER
1) When the whole of the price has not
been paid; or
2) When a bill of exchange or other
negotiable instrument has been received
as conditional payment, and the
condition on which it was received has
been broken by reason of dishonor of
the instrument, the insolvency of the
buyer, or otherwise.
1526: REMEDIES OF UNPAID SELER
1)Possessory Lien;
2)Right of stoppage in transit;
3)Right of Resale;
4) Right to Rescind the Sale
1527: WHEN SELLER HAS POSSESSORY
LIEN
*The unpaid seller who is in possession of the
goods is entitled to retain possession until
payment or tender of price in the ff cases:
1) Where the goods have been sold without any
stipulation as to credit;
2)Where the goods have been sold on credit,
but the term of credit has expired;
3) Where the buyer becomes insolvent;
1528: POSSESSORY LIEN AFTER
PARTIAL DELIVERY
*Lien may be waived EXPRESSLY OR
IMPLIEDLY
1529: WHEN POSSESSORY LIEN IS
LOST
1) Delivery of goods to a carrier or other
bailee for the purpose of transmission to
the buyer without reserving ownership
in the goods or the right to the
possession;
2) When the buyer or his agent lawfully
obtains possession of the goods;
3) By waiver;
1530: RIGHT OF STOPPAGE OF
TRANSITU
*available remedy of US whenever buyer is or
becomes INSOLVENT, if such US has parted
with the possession of the goods;
REQUISITES OF RIGHT OF STOPPAGE IN
TRANSITU:
1)Seller is UNPAID;
2) Buyer is or becomes INSOLVENT;
3) Unpaid Seller has parted with the possession
of the goods;
4) Goods are in TRANSIT;
5) Unpaid seller either obtains actual
possession of the goods or gives notice of his
claim to the carrier or other bailee in whose
possession the goods are;
1531: WHEN GOODS ARE IN TRANSIT
OR NOT
GOODS ARE IN TRANSIT within the
meaning of the preceding article:
(1) From the time when they are delivered to a
carrier by land, water, or air, or other bailee for
the purpose of transmission to the buyer, until
the buyer, or his agent in that behalf, takes
delivery of them from such carrier or other
bailee;
(2) If the goods are rejected by the buyer, and
the carrier or other bailee continues in
possession of them, even if the seller has
refused to receive them back.
GOODS ARE NO LONGER IN TRANSIT
within the meaning of the preceding
article:
(1) If the buyer, or his agent in that behalf,
OBTAINS DELIVERY of the goods BEFORE
THEIR ARRIVAL AT THE APPOINTED
DESTINATION;
(2) If, after the arrival of the goods at the
appointed destination, the carrier or other
bailee acknowledges to the buyer or his agent
that he holds the goods on his behalf and
continues in possession of them as bailee for
the buyer or his agent; and it is immaterial that
further destination for the goods may have
been indicated by the buyer;
(3) If the carrier or other bailee wrongfully
refuses to deliver the goods to the buyer or his
agent in that behalf.
1532: HOW RIGHT OF STOPPAGE IN
TRANSITU MAY BE EXERCISED
1) Obtaining actual possession;
2) Giving notice of the claim;
TO WHOM NOTICE IS GIVEN:
1) To the person in actual possession
of the goods;
2) To his principal
1533: RIGHT OF RESALE
1) Perishable goods;
2) Express Stipulation;
3) Unreasonable Default
1534: RIGHT TO RESCIND TITLE
EFFECTS OF RESCISSION: ii.the vendee may choose between A
PROPORTIONAL REDUCTION OF THE
The unpaid seller shall not be liable to the
PRICE and;
original buyer upon the contract of sale;
iii.the RESCISSION OF THE CONTRACT,
The unpaid seller may recover from the
provided that, in the latter case, the lack in the
buyer damages for any loss occasioned by the
area be not less than one-tenth of that stated;
breach of the contract of sale.
The same shall be done, even when the
ESSENTIALS FOR THE VALIDITY OF
area is the same, if any part of the immovable is
RESCISSION OF THE TRANSFER OF
not of the quality specified in the contract.
TITLE;
The RESCISSION, in this case, SHALL
The transfer of title shall not be held to have
ONLY TAKE PLACE AT THE WILL OF THE
been rescinded by an unpaid seller UNTIL he
VENDEE, when the inferior value of the thing
has manifested by notice to the buyer or by
sold exceeds one-tenth of the price agreed
some other overt act an intention to rescind.
upon.
1535: EFFECT IF BUYER HAS ALREADY
Nevertheless, if the vendee would not
SOLD THE GOODS
have bought the immovable had he known of
GR: Unpaid Seller’s right of lien or stoppage in its smaller area of inferior quality, he may
transit remains even if the buyer has sold or rescind the sale
otherwise disposed of the goods;
1540: VENDOR DELIVERS MORE THAN
EXPNS: THE AREA AGREED

1) When the seller has given his consent Vendee may:

thereto;
1) Accept the area included in the
2) When the purchaser or the buyer is a
contract and reject the rest.
purchaser for value in good faith of a
2) If he accepts the whole area, he
negotiable document of title
must pay for the same at the
1536: WHEN SELLER IS NOT BOUND TO contract rate. (1470a)
DELIVER BECAUSE BUYER HAS LOST THE
1541: JUDICIAL SALES
BENEFIT IF THE TERM;
1542: SALE OF IMMOVABLE FOR A
1537: ACCESSIONS AND ACCESSORIES
LUMP SUM
1538: EFFECT OF LOSS, DETERIORATION
GENERAL RULE: The BUYER is duty bound
OR IMPROVEMENT BEFORE DELIVERY
to deliver the whole area within the boundaries
1539: SALE OF IMMOVABLE LESS THAN stated, without any corresponding increase in
THE AREA AGREED UPON: the price.

If the SALE OF REAL ESTATE SHOULD BE EXCEPTION: The DIFFERENCE in the area
MADE WITH A STATEMENT OF ITS AREA, at is obviously SIZABLE and too SUBSTANTIAL
the rate of a certain price for a unit of measure to be overlooked.
or number, the vendor shall be obliged to
1543: PRESCRIPTIVE PERIOD
deliver to the vendee,
*6 MONTHS (1539 &1542)
i.if the latter should demand it, all that may
have been stated in the contract; but, should 1544: DOUBLE SALE
this be not possible;
PERSONAL PROPERTY:
 1) POSSESSOR IN GOOD FAITH
REAL PROPERTY:
1) Registrant in Good Faith;
2) Possessor in Good Faith;
3) Person with the oldest title in good
faith
*does not apply to a situation where the
earlier transaction is PACTO DE RETRO
SALE AND THE SUBSEQUENT IS A
DONATION OF THE LAND BY THE
VENDOR;
1545 – 1581: CONDITIONS,
WARRANTIES AND HIDDEN DEFECTS
ARTICLE 1545 -CONDITION
Where the obligation of either party to a
contract of sale is subject to any
CONDITION WHICH IS NOT
PERFORMED, such party may REFUSE
to PROCEED WITH THE CONTRACT or
he MAY WAIVE PERFORMANCE OF
THE CONDITION. If the other party has
promised that the condition should
happen or be performed, such first
mentioned party may also treat the
NONPERFORMANCE OF THE
CONDITION as a BREACH OF
WARRANTY
***Article 1545 is applicable ONLY to a
Perfected Contract of Sale;
***Condition mentioned under 1545 is imposed
on the PERFORMANCE OF THE
OBLIGATION of either party in a perfected
contract of sale, and not to the perfection of a
contract of sale;
REMEDIES UNDER ARTICLE 1545:
1.REFUSING TO PROCEED WITH THE
CONTRACT;
2.WAIVING THE PERFORMANCE OF THE
CONDITION
***A PROMISE OF THE OBLIGOR, that a
condition would happen or be performed, is the
Operative act that transforms the condition
into WARRANTY.
***To warrant for the RESCISSION, a breach
mush either be SUBSTANTIAL or SERIOUS; it
may only be brought by the AGGRIEVED
PARTY.
***WAIVER may be EXPRESS or IMPLIED;
1548 – WHEN CAN THERE BE
EVICTION?
EVICTION shall take place whenever by a final
judgment based on a right prior to the sale or
an act imputable to the vendor, the vendee is
deprived of the whole or of a part of the thing
purchased.
The vendor shall answer for the eviction even
though nothing has been said in the contract on
the subject.
The contracting parties, however, may
increase, diminish, or suppress this legal
obligation of the vendor. (1475a)
REQUISITES OF EVICTION:
1.The vendee is deprived, in whole or in part, of
the thing;
2.The eviction is by a final judgement;
3.The final judgement is based on a prior right
to the sale or an act imputable to the vendor;
4.The vendor is summoned in the suit for
eviction at the instance of the vendee; and
5.There is no waiver of warranty by the vendee.
***Warranty against eviction was not
applicable if there was NO DEPRIVATION OF
PROPERTY;
***Warranty against eviction is NOT
APPLICABLE when the reason of the
deprivation of property was NOT
DELIBERATELY caused by the seller;
***Warranty against eviction is NOT
APPLICABLE when the seller was not
summoned in the suit for the eviction of the
buyer;
1565-CONTRACT OF SALE BY SAMPLE
In the case of a CONTRACT OF SALE BY
SAMPLE, if the seller is a DEALER IN GOODS
OF THAT KIND, there is an implied warranty
that the goods shall be free from any defect
rendering them unmerchantable which would
not be apparent on reasonable examination of
the sample. (n)
***QUALITY – goods are in satisfactory state
or condition;
***FITNESS – goods are reasonably fit or
suitable for the use or purpose for which they
are intended, as measured against the goods of
similar kind.
GENERAL RULE: There is no implied
warranty or condition as to quality or fitness of
goods provided under a contract of sale.
***As Is Where Is, means that the parties agree
that the object of the sale is without any
warranty as to its fitness and quality. Buyer
assumes the risk;
EXCEPTIONS:
1.Reliance on the seller’s skill or judgement;
a.Seller is the manufacturer or grower of the
goods;
b.Primarily engaged in the business of selling
such goods;
2.Sale of Goods by Description;
a. There is an implied warranty that the goods
are of merchantable quality;
3. Sale of Goods by Sample;
a.There is an implied warranty that the goods
shall be free from any defect which is not
apparent on reasonable examination of the
sample and which would render the goods
unmerchantable;
b. The buyer must have a reasonable
opportunity of comparing the bulk with the
sample;
c. The goods must correspond with the sample
in quality
1582 – 1589: OBLIGATIONS OF THE
VENDEE
PRINCIPAL OBLIGATION
1)Accept Delivery;
2) Pay the Price of the Thing Sold;
***Non-payment of the price in a contract of
sale does not render ineffective the obligation
to deliver, it only creates a RIGHT TO
DEMAND PAYMENT or to RESCIND THE
CONTRACT, or to CRIMINAL POSECUTION
in case of bouncing checks;
***Non-payment is immaterial and has no
effect on the validity of the contract of sale.
GENERAL RULE: The seller affords the
buyer, upon the latter’s request. A reasonable
opportunity of examining the goods when he
tenders delivery of goods to the buyer.
EXCEPTION: Unless otherwise agreed
PURPOSE: In order for the buyer to ascertain
whether the goods are in conformity with the
contract.
RIGHTS OF THE BUYER IN RELATION
TO HIS OBLIGATION TO ACCEPT
DELIVERY:
1.The buyer of goods is not bound to accept
delivery thereof by instalments unless
otherwise agreed;
2.The buyer has a right to be afforded a
reasonable opportunity to examine the goods
when delivered;
3.The buyer has a right to refuse to take
delivery of, or reject the goods with just cause.
WHEN THE BUYER IS DEEMED TO
HAVE ACCEPTED THE GOODS:
1.He intimates to the seller that he has accepted
them;
2.The goods have been delivered to him, and he
does any act in relation to them which is
inconsistent with the ownership of the seller; or
3.After the lapse of a reasonable time, he
retains the goods without intimating to the
seller that he has rejected them
***Acceptance of the buyer signifies his
confirmation of the contract;
***Actual Receipt refers only to the act of
getting, taking or receiving of the goods
delivered.
1586: NOTICE OF BREACH SHOULD BE
GIVEN AFTER THE BREACH OF
WARRANTY
***If there is a breach of the warranty, NOTICE
OF THE BREACH should be given to the seller
within a reasonable time;
***Notice must be given after the breach.
OBLIGATIONS OF THE BUYER WHEN
HE REFUSE TO ACCEPT THE GOODS:
1.To notify the seller of his refusal to accept the
goods;
2.To take good care of the goods, but he is not
bound to return them to the seller;
3.To be held liable as a depositary of the goods
if he constituted himself as such;
***The acceptance of the thing sold by the
buyer signifies the formal transfer of ownership
to him.
GENERAL RULE: Acceptance of the goods
by the buyer shall not discharge the seller from
liability in damages or other legal remedy for
breach of any promise or warranty in
the contract of sale.
EXCEPTION:
1.The presence of an express or implied
agreement of the parties to the contrary;
2.The buyer fails to give notice to the seller of
the breach in any promise of warranty within a
reasonable time after the buyer knows, or
ought to know of such breach.
IN WHAT CASES BUYER IS LIABLE FOR
INTEREST ON THE PRICE:
1) Should it have been so stipulated;
2) Should the thing have sold and delivered
produce fruits or income;
3) Should he be in default, from the time of
judicial or extrajudicial demand for the
payment of the price
1590: WHEN BUYER MAY SUSPEND
PAYMENT OF THE PRICE
1) There is a well grounded fear of
vindicatory action or action to recover;
2) Foreclosure of Mortgage;
1591: WHEN SELLER MAY IMMEDIATELY
SUE FOR THE RESCISSION OF THE SALE
*If The seller has reasonable grounds to fear:
1) loss of the immovable property sold;
and
2) Loss of the price
1592: RESCISSION OF SALE OF REAL
PROPERTY
*Applicable only to a sale of real property, not
to a contract to sell
Example of this Article
On Jul. 1, A sold B a piece of land, payment and
delivery to be made on Jul. 15. It was stipulated
that should payment not be made on Jul. 15,
the contract would automatically be rescinded.
On Jul. 20, can B still pay?
ANS.: Yes, as long as there has been no judicial
or notarial demand for the rescission of the
contract. But if, for example on Jul. 18, A had
made a notarial demand for such a rescission
then B will not be allowed to pay anymore, and
the court may not grant him a new term
EXTINGUISHMENT OF SALE
1600: HOW SALES ARE
EXTINGUISHED
1) Same causes as in other obligations;
2) By redemption
CONVENTIONAL REDEMPTION
1601: WHEN TAKES PLACE
*When the vendor reserves right to repurchase
the thing sold;
*there cannot be conventional redemption
unless it has been stipulated
1602: EQUITABLE MORTGAGE
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
*EQUITABLE MORTGAGE – one which
although lacking in some formality, form or
words, or other requisites demanded by a
statute nevertheless reveals the intention of the
parties to charge a real property as security for
a debt, and contains nothing impossible or
contrary to law;
1603: IN CASE OF DOUBT, EQUITABLE
MORTGAGE IS PRESUMED
ARTICLE 1616: WHAT SELLER MUST GIVE
TO THE BUYER IF REDEMPTION IS MADE:
1) The price;
2) Expenses of the Contract;
3) Any other legitimate payments made by
reason of the sale;
4) Necessary expenses made on the thing
sold;
5) Useful expenses on the thing sold.
*nature of the property repurchased is not
determined by the character of the money used
for it repurchase, but by the ownership of the
right of redemption;
LEGAL REDEMPTION
*is the right to be subrogated in the place of
one who acquires a thing by purchase or dation
in payment, or by any other transaction
whereby ownership is transmitted by onerous
title;
RIGHT OF LEGA REDEMPTION OF CO-
OWNER
*in case the shares of all the other co-owners or
of any of them, are sold to a 3rd person;
LEASE – 1642 – 1766
Lease – a contract where one of the parties
binds himself to give another the enjoyment or
use of a thing for a certain price and for a
period which may be definite or indefinite but
no longer than 99 years.
**There are 2 kinds of lease under the
Civil Code: (1642)
-Lease of things (1643);
-Lease of Work or Service (1644)
4 kinds of Lease of Work or Service:
-Household Service (1689-1699);
-Contract of Labor (1700-1712);
-Contract for a Piece of Work (1713-1731);
-Carriage of Goods (1732-1766)
CONSUMABLE GOODS (1645)
GR: Cannot be the subject of lease of things;
EXPNS:
-For Exhibit;
If accessory to an industrial establishment;
FORMALITIES:
-For Lease of SERVICE: NO REQUIRED
FORM for it to be valid or to be enforceable;
-For Lease of THINGS: If the thing leased is
an immovable and the lease is for more than 1
year, contract of lease must be in writing in
order to be enforceable;
***Also, for a lease of real estate to be binding
against 3rd persons, it must be Recorded in the
Registry of Property; (1648)
-In case that the land under lease is not
recorded in the Registry of Property, in case
that the land was sold, the PURCHASER HAS
THE RIGHT TO TERMINATE THE LEASE,
unless there is stipulation to the contrary or the
purchaser knows of the existence of the lease
(1676)
***In case the SALE IS FICTITIOUS, and
was merely sought to extinguish the
lease, the supposed PURCHASER CANNOT
TERMINATE THE LEASE; (1676)
***It is said that the sale is fictitious if at the
time the purchaser demands the termination of
the lease, the sale is not recorded in the
Registry of Property.
ASSIGNMENT OF LEASE (1649)
GR: The lessee cannot assign the lease without
consent of the lessor;
XPN: There is stipulation to the contrary
SUBLEASE (1650)
However, if there is no express prohibition in
the contract of lease of thing, the lessee
may sublease the thing leased to another, in
whole or in part, without prejudice to his
responsibility for the performance of the
contract toward the lessor;
DISTINGUISH ASSIGNMENT TO
SUBLEASE
Whether the contract is
assignment of lease or sublease, would
depend on whether there was absolute
transfer of rights from the lessee to the
third person, such that he desists
himself from the lease contract and his
personality, resulting now in two (2)
persons the lessor and the assignee, and
the latter is now converted in to the new
lessee.
However, if the lessee retains
interest no matter how small in the
contract of lease then it will be treated
only as sublease.
So again, in an assignment of
lease there has to be an absolute
transfer of interest by the lessee of his
rights and he disassociated himself
from the contract however if there is
reversionary interest retained by him
then it will be considered merely as
sublease.
RIGHTS AND OBLIGATIONS OF
LESSOR (1654):
-To deliver the thing which is the object of the
contract in such conditions as to render it fit
for the use intended;
-To make on the same during the lease all the
necessary repairs in order to keep it suitable for
the use to which it has been devoted, unless
there is a stipulation to the contrary;
-To maintain the lessee in the peaceful and
adequate enjoyment of the lease for the entire
duration of the contract;
-To continue engaging in the same business or
industry to which the lessee devotes the thing
leased, unless there is a stipulation to the
contrary (1656)
-Cannot alter the form of the thing leased as to
impair the use to which the thing is devoted
(1661);
RIGHTS AND OBLIGATIONS OF
LESSEE (1657):
-To pay the price of the lease;
-To use the thing leased as a diligent father of a
family, devoting it to the use stipulated; and in
the absence of stipulation, to that which may be
inferred from the nature of the thing leased;
-To pay the expenses for the deed of lease;
-Right to suspend the payment of rent in case
lessor fails to make necessary repairs or to
maintain the peaceful and adequate enjoyment
of the property (1658);
-To inform the lessor/proprietor every
usurpation/untoward act which any 3rd person
may have committed or may be openly carrying
out upon the thing leased (1663);
-Return the thing leased upon termination of
the lease just as he received it, save what has
been lost or impaired by the lapse od time, or
by ordinary wear and tear or from an inevitable
cause;
TERMINATION OF LEASE:
-In a lease of thing, death of the lessee does
not terminate the contract; A contract of
lease is not essentially a personal contract
therefore upon the death of the lessee, it may
be continued until the expiration of the
lease by the heirs.
However, if the thing leased is totally destroyed
by a fortuitous event, the LEASE IS
EXTINGUISHED. (1655)
-IF THE DESTRUCTION IS PARTIAL,
lessee may choose whether:
-Proportional reduction of rent; or
-Rescission of the lease.
Also, If a dwelling place or any other building
intended for human habitation is in such a
condition that its use brings imminent and
serious danger to life or health, LESSEE MAY
TERMINATE THE LEASE AT ONCE, by
notifying the lessor (1660)
Also, the lessor has the option to Judicially
Eject the Lessee on the following grounds
(1673):
 Expiration of the period agreed upon;
 Lack of payment of the rent;
 Violation of any of the conditions agreed
upon in the contract; and
 Lessee devotes the thing leased to any
use or service not stipulated which
causes the deterioration thereof;
IMPLIED LEASE (TACITA
REDUNDUCION - article 1670)
REQUIREMENTS:
 The lease period has expired;
 The lessee continues to be in
possession of the lease at least 15
days from the time of the
expiration of the lease; and
 There is no notice to the contrary
from the lessor and the lessee.
EFFECT OF IMPLIED LEASE:
 Original Contract is revived;
 However, the period of the implied new
lease will be based on:
o FOR RURAL LAND: For all the
time necessary for the gathering
of the fruits which the whole
estate lease may yield in one year
(1682);
o FOR URBAN AREAS: If the
period for the lease has not been
fixed, it is understood to be from
year to year, if the rent agreed
upon is annual; from month to
month, if it is monthly; from
week to week, if the rent is
weekly; and from day to day, if
the rent is to be paid daily. (1687)
USEFUL AND ORNAMENTAL AGENCY TO SELL VS. SALE
EXPENSES (1678)
*In Agency to Sell, ownership of the goods is
*If the lessee makes, in GOOD FAITH, useful not transferred to the agent; while in Sale
improvements suitable to the use for which the ownership is transferred to the buyer;
lease is intended, the lessor shall:
*In Agency to Sell, the agent delivers the price;
 Pay half of the value of the while in Sale buyer pays the price
improvements; or if refuse to pay
 Lessee may remove the improvements,
even though the principal thing may 1869: KINDS OF AGENCY
suffer.
*EXPRESS;
IN CASE OF ORNAMENTAL EXPENSES:
*IMPLIED from
-lessee is not entitled to reimbursement;
1) acts of principal;
however
2) principal’s silence;
-He may remove the ornamental objects
without damaging the principal thing and the 3)principal’s lack of action;
lessor does not chose to retain it by paying their
4)principal’s failure to repudiate the
value from the time the lease is extinguished.
agency
RIGHT OF FIRST REFUSAL
1870: Acceptance of AGENT may also be
Right of first refusal means identity of terms EXPRESS/IMPLIED
and conditions to be offered to the lessee and
1871: ANOTHER FORM OF IMPLIED
all other prospective buyers and a contract of
AGENCY – face to face/ conversing thru
sale entered into in violation of a right of first
mobile phone
refusal of another person, while valid, is
rescissible. 1872: RULE WHEN SILENCE OF ABSENT
AGENT IS AN IMPLIED ACCEPTANCE:
1) When the principal transmits his power
AGENCY
of attorney to the agent, who receives it
1868: AGENCY without any objection;
2) When the principal entrusts to him by
*a person binds himself to render some service
letter or telegram a power of attorney
or to do something in representation or on
with respect to the business in which he
behalf of another, with the consent or authority
is habitually engaged as an agent, and he
of the latter;
did not reply to the letter or telegram
*Agency is an act which one person gives to
1873: INFORMING OTHER PEOPLE OF
another the power to do something for the
THE EXISTENCE OF THE AGENCY
principal and in his name;
-SPECIAL INFORMATION – to the person
IMPORTANCE: enables a man to increase
who received the special information;
the range of his individual and corporate
activity by enabling him to be constructively -PUBLIC ADVERTISEMENT – to any person
present in many places and to carry on diverse
AGENCY BY ESTOPPEL VS. IMPLIED
activities at the same time;
AGENCY
AS BETWEEN PRINCIPAL AND AGENT:
*In implied agency, the agent is a true agent,
with rights and duties of an agent; while in an
agency by estoppel, the agent is not a true
agent, hence he has no rights as such
AS TO 3RD PERSONS:
*If the estoppel is caused by the principal, he is
liable, but only if the 3rd person acted on the
misrepresentation; while in an implied agency,
the principal is always liable;
*If the estoppel is caused by the agent, it is only
the agent who is liable, never the alleged
principal; In an implied agency, the agent is
never personally liable;
1874: AUTHORITY TO SELL LAN OR
ANY INTEREST THEREIN
1875: AGENCY IS PRESUMED TO BE
ONEROUS;
1876: GENERAL AND SPECIAL AGENCIES
Question: Absent substantial evidence to
show a special agent’s authority from his
principal to give consent to the creation of a
tenancy relationship, can the former’s actions
give rise to an implied tenancy?
Answer: No
1877: AGENCY COUCHED IN GENERAL
TERMS AND IN SPECIAL TERMS
*GENERAL TERMS – acts of administration
only;
*SPECIAL TERMS –
1878: SPECIAL POWER OF ATTORNEY
ARE NEEDED
WHEN SPECIAL POWERS OF ATTORNEY
ARE NEEDED:
1) Acts of strict dominion or ownership;
2) Gratuitous contracts;
3) Contracts where personal trust or
confidence is of the essence of the
agreement;
TLC SAID TO MEMORIZE 5:
1)To bind the principal in a contract of
partnership;
2)To accept or repudiate an inheritance;
3) Any other act of strict dominion;
4)To ratify or recognize obligations contracted
before the agency;
5) To obligate the principal as a guarantor or
surety;
1879: POWER TO SELL
*POWER TO SELL EXCLUDES THE POWER
TO MORTGAGE;
*A SPECIAL POWER TO MORTGAGE DOES
NOT INCLUDE THE POWER TO SELL
1880: SPECIAL POWER TO COMPROMISE
*does not include authority to arbitration;
1881: FUNDAMENTAL PRINCIPLES OF
AGENCY
1)Agent must act within the scope of his
authority;
2)Agent must act in behalf of his principal; (do
such acts as may be conducive to the
accomplishment of the purpose of the agency)
DOCTRINE OF AGENCY BY NECESSITY
*means that by virtue of the existence of an
emergency, the authority of an agent is
correspondingly enlarged in order to cope with
the exigencies or the necessities of the moment;
IT IS WHEN:
1) Real existence of an emergency;
2) Inability of the agent to communicate
with the principal;
3) Exercise of the additional authority for
the principal’s own protection;
4) Adoption of fairly reasonable means,
premises duly considered;
5) The ceasing of the authority the moment
the emergency no longer demands the
same;
1882: WHEN AGENT’S PERFORMANCE
IS DEEMED STILL AUTHORIZED
*if it is performed in a manner more
advantageous to the principal;
BAR
An agent with general powers for
administration, desirous of improving the
financial condition of his principal’s business,
sold a piece of land belonging to his principal
for double the price that appeared in an
inventory prepared by the principal before
leaving the place. Do you think the agent has
exceeded his power? Why?
ANS.: Yes, the agent has exceeded his powers
despite the fact that the price obtained was
double the value of the property. The important
fact is that he made a sale, a transaction which
requires a special power of attorney. (Art.
1878). As a mere administrator, he had no right
to alienate.
1883: AGENCY WITH AN UNDISCLOSED
PRINCIPAL
If an agent acts in his own name, the principal
has no right of action against the persons with
whom the agent has contracted; neither have
such persons against the principal.
In such case the agent is the one directly bound
in favor of the person with whom he has
contracted, as if the transaction were his own,
EXCEPT WHEN THE CONTRACT
INVOLVES THINGS BELONGING TO
THE PRINCIPAL.
The provisions of this article shall be
understood to be without prejudice to the
actions between the principal and agent.
OBLIGATIONS OF THE AGENT
1884: DUTY TO CARRY OUT THE AGENCY;
1885: DUTY TO OBSERVE GFF IN THE
CUSTODY & PRESERVATION OF GOODS
FORWARDED
1886: ADVANCE OF NECESSARY FUNDS OF
THE AGENT
1887: DUTY TO FOLLOW INSTRUCTION
1888: DUTY WHEN NOT TO CARRY OUT
AGENCY
*When it would manifestly result in loss or
damages to the principal;
1889: RULE IF AGENT PREFERS HIS OWN
INTERESTS
*principal may sue for damages;
1890: AUTHORITY TO BORROW OR
LEND MONEY
*AGENT/LENDER – current rate of interest;
*AGENT/BORROWER –GR: NO, UNLESS
PRINCIPAL CONSENTS;
1891: DUTY OF AGENT TO ACCOUNT; EVEN
THOUGH MAY NOT BELONG TP THE
PRINCIPAL
1892: APPOINTMENT OF SUBSTITUTE
FOR THE AGENT
The agent MAY APPOINT A
SUBSTITUTE if the principal has not
prohibited him from doing so; but he
shall be responsible for the acts of the
substitute:
(1) When he was not given the power to
appoint one;
(2) When he was given such power, but
without designating the person, and the
person appointed was notoriously
incompetent or insolvent.
ALL ACTS OF THE SUBSTITUTE
appointed against the prohibition of the
principal shall be void.
1893: WHEN THE PRINCIPAL MAY SUE THE
SUBSTITUTE
1894: JOINT NOT SOLIDARY LIABILITY
GR: JOINT
EXPN: EXPRESSLY STIPULATED
1895: WHEN SOLIDARITY HAS BEEN
AGREED UPON
1896: LIABILITY OF THE AGENT FOR
INTEREST
*to sums he has applied to his own personal
use
1897: NO PERSONAL LIABILITY FOR AGENT
EXPN: AGENT EXPRESSLY BINDS
HIMSELF/EXCEEDS LIMITS OF HIS
AUTHORITY
1898: CONTRACTS ENTERED INTO IN
EXCESS OF AUTHORITY
GR: Principal is not bound;
EXPN: When he ratifies the act of the agent;
1899: IGNORANCE OF AGENT
1900: ACT PERFORMED WITHIN TERMS OF
WRITTEN AUTHORITY
1901: EFFECT OF RATIFICATION
1902: PRIVATE OR SECRET ORDERS
1903: COMMISSION AGENT
*one which shall be responsible for the goods
received by him in the terms and conditions
and as described in the consignment
1904: DUTY OF COMMISSION AGENT TO
PLACE COUNTERMARKS;
1905: SALE BY THE COMMISSION AGENT
ON CREDIT
*Commission agent cannot, without the
express or implied consent of the principal,
SELL ON CREDIT
1906: DUTY OF AGENT TOO INFORM THE
PRINCIPAL
Should the commission agent, with authority of
the principal, sell on credit, he shall so inform
the principal, with a statement of the names of
the buyers. Should he fail to do so, the sale
shall be deemed to have been made for cash
insofar as the principal is concerned.
1907: GUARANTEE COMMISSION
1908: FAILURE TO COLLECT CREDITS
1909: RESPONSIBILITY NOT ONLY FOR
FRAUD BUT ALSO FOR NEGLIGENCE
OBLIGATIONS OF THE PRINCIPAL
ARTICLE 1910: DUTY TO COMPLY WITH
AGENT’S COMMITMENTS;
1911: LIABILITY OF PRINCIPAL DUE TO
ESTOPPEL
*SOLIDARILY
1912: ADVANCING OF NECESSARY
FUNDS
The principal must advance to the agent,
should the latter so request, the sums necessary
for the execution of the agency.
Should the agent have advanced them, the
principal must reimburse him therefor, even if
the business or undertaking was not successful,
provided the agent is free from all fault.
1913: PRINCIPAL TO COMPENSATE AGENT
FOR DAMAGES
1914: RIGHT OF AGENT TO RETAIN BY WAY
OF PLEDGE
1915: SOLIDARY LIABILITY OF PRINCIPALS
1916: When two persons contract with
regard to the same thing, one of them
with the agent and the other with the
principal, and the two contracts are
incompatible with each other, that of
prior date shall be preferred, without
prejudice to the provisions of Article
1544.
1917: LIABILITY IF AGENT ACTED IN GOOD
FAITH/BAD FAITH
GOOD FAITH – principal shall be liable in
damages to the 3rd person whose contract must
be rejected;
BAD FAITH – agent alone is responsible;
1918: WHEN PRINCIPAL IS NOT
LIABLE FOR AGENT’S EXPENSES
(1) If the agent acted in contravention of the
principal’s
instructions, unless the latter should wish to
avail himself of the benefits derived from the
contract;
(2) When the expenses were due to the fault of
the agent;
(3) When the agent incurred them with
knowledge that an unfavorable result would
ensue, if the principal was not aware thereof;
(4) When it was stipulated that the expenses
would be borne by the agent, or that the latter
would be allowed only a certain sum.
MODES OF EXTINGUISHING AGENCY
ARTICLE 1919: Agency is extinguished:
(1) By its revocation;
(2) By the withdrawal of the agent;
(3) By the death, civil interdiction,
insanity or insolvency of the principal or
of the agent;
(4) By the dissolution of the fi rm or
corporation which entrusted or accepted
the agency;
(5) By the accomplishment of the object
or purpose of the agency;
(6) By the expiration of the period for
which the agency was constituted.
1920: REVOCATION BY PRINCIPAL OR
AGENCY
1921: AGENCY FOR CONTRACTING WITH
SPECIFIED PERSONS
If the agency has been entrusted for the
purpose of contracting with specified persons,
its revocation shall not prejudice the latter if
they were not given notice thereof.
1922: AGENCY WHEN 3RD PARTIES ARE NOT
SPECIFIED
If the agent had general powers, revocation of
the agency does not prejudice third person who
acted in good faith and without knowledge of
the revocation. Notice
of the revocation in a newspaper of general
circulation is a sufficient warning to third
persons.
ARTICLE 1923: EFFECT OF APPOINTMENT
OF A NEW AGENT
*Effect of appointment of a new agent;
*A special power revokes a general one;
1924: EFFECT IF THE PRINCIPAL DIRECTLY
MANAGES THE BUSINESS
*REVOKED
1925: REVOCATION BY ONE OR 2 OR MORE
PRINCIPALS
1926: RULE WHEN SPECIAL POWER IS
GRANTED TO ANOTHER AGENT
A general power of attorney is revoked by a
special one granted to another agent, as
regards the special matter involved in
the latter;
1927: WHEN AN AGENCY CANNOT BE
REVOKED
*If a bilateral contract depends on it;
*If it is the means of fulfilling an obligation
already contracted;
*If a partner is appointed manager of a
partnership in the contract of partnership
1928: WITHDRAWAL BY AGENT
*by giving due notice to the principal;
*GR: agent is liable to principal if the principal
suffers any damage by reason of the
withdrawal;
EXPN: it will cause grave detriment to the
agent
1929: WHEN A WITHDRAWN AGENT MUST
STILL ACT
1930: WHEN AGENCY CONTINUES EVEN
AFTER DEATH OF PRINCIPAL
*If the agency is constituted in the common
interest of the principal;
*Coupled with the interest of a 3rd person who
has accepted the stipulation in his favor
1931: Anything done by the agent,
without knowledge of the death of the
principal or of any other cause which
extinguishes the agency, is valid and
shall be fully effective with respect to
third persons who may have contracted
with him in good faith.
1932: DEATH OF THE AGENT
If the agent dies, his heirs must notify the
principal thereof, and in the meantime adopt
such measures as the circumstances may
demand in the interest of the latter.
DEPOSIT
1962: Deposit is constituted from the
moment a person receives a thing
belonging to another, with the obligation
of safely keeping it and of returning the
same.
PRINCIPAL PURPOSE: safekeeping of
the thing delivered;
KINS OF DEPOSIT:
1)JUDICIAL
2)EXTRAJUDICIAL
GR: Depositary cannot use the thing
deposited;
EXPN:
1) With the express permission of the
depositor; or
2) When the preservation of the thing
deposited requires its use;
1963: CONSENSUAL CONTRACT TO
CONSTITUTE A DEPOSIT
*deposit is a real contract and is not
perfected until the delivery of the object
of the obligation;
1964: May be Judicial or Extrajudicial
1965: COMPENSATION IN A DEPOSIT
GR: Gratuitous;
EXPN:
1) There is a contrary agreement;
2) When the depositary is engaged in
the business of storing goods;
1966: MOVABLE THINGS MAY BE
OBJECT OF DEPOSIT
1967: KINDS OF EXTRAJUDICIAL
DEPOSIT
1) Voluntary – when there is mutual
consent;
2) Necessary – when there is a
deposit because of a calamity;
VOLUNTARY DEPOSIT
1968: VOLUNTARY DEPOSIT – one
which the object of the contract is made
by the will of the depositor;
*depositor need not be the owner;
1969: FORM OF DEPOSIT
*Orally or in Writing;
1970: RULE WHEN DEPOSITOR IS
INCAPACITATED
*contract is voidable;
*the person who accepts will be deemed
as DEPOSITARY;
1971: RULE IF DEPOSITARY IS
INCAPACITATED
*voidable
REMEDY OF DEPOSITOR
What is the nature of the action of a
depositor who has deposited something
still in the possession of an insane
depositary?
ANS.: His is an owner’s action to
recover or vindicate a thing. The
insane depositary, because of the
insanity, does not incur the obligations
of a depositary.
OBLIGATIONS OF THE
DEPOSITARY
1972: PRINCIPAL OBLIGATIONS
OF THE DEPSITARY
1) Safekeeping and
2) return the thing;
*depositary is required to have
more care if the deposit is for
compensation.
1973: DEPOSIT WITH A THIRD
PERSON