Obligations of the Vendor

A. Section 1: General Provisions (Ownership) 1495-1496

Principal Obligations of the Vendor:

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
3. To warrant against eviction and against hidden defects
4. To take care of the thing, pending delivery, with proper diligence
5. To pay for the expense of the deed of sale, unless there is a stipulation to the contrary

Obligation to Transfer Ownership and Deliver

1. Ownership by vendor at time of perfection of contract not essential – 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
2. Transfer not essential to perfection of contract – if the seller does not deliver at the time
stipulated, the buyer may ask for the rescission of the contract or fulfillment with the right to
damages in either case
3. No obligation to make delivery during period of redemption – the effective conveyance of the
land is accomplished by the deed which is issued only after the period of redemption has
expired
4. Right of vendee to transfer of certificate of title
5. Right of buyer to recover the price paid - whenever money is paid upon the representation of
the receiver that he has either a certain title in property transferred in consideration of the
payment or a certain authority to receive the money paid, when in fact he has no such title or
authority, then, although there be no fraud or intentional misrepresentation on his part, yet
there is no consideration for the payment

Ways of Effecting Delivery:

1. By actual or real delivery – thing sold is placed under the control and possession of
buyer/agent
2. By constructive or legal delivery – does not confer physical possession of the thing, but by
construction of law, is equivalent to acts of real delivery

Ways of Effecting Constructive Delivery:

a. Equivalent to actual delivery:
a.1 by the execution of a public instrument – delivery of the instrument
a.2 by symbolical tradition or traditio symbolica – delivery of certain symbols representing
the thing delivered
 a.3 by traditio longa manu – vendor merely points to the thing sold which shall thereafter
be at the control and disposal of the vendee
a.4 by traditio brevi manu – the vendee has already the possession of the thing sold b
virtue of another title
a.5 by traditio constituttum possessorium – vendor continues in possession of the property
sold not as owner but in some other capacity
a.6 by quasi-delivery or quasi-traditio – delivery of corporeal things; effected (1) by the
execution of a public instrument; or (2) when that mode of delivery is not applicable, by the
placing of the titles of ownership in the possession of the vendee; or (3) by allowing the
vendee to use his rights as new owner with the consent of the vendor.
b. Contrary may be stipulated – the parties may stipulate that ownership in the thing shall
pass to the purchaser only after he has fully paid the price or fulfilled certain conditions.

3. By delivery in any other manner signifying an agreement that the possession is transferred to
the vendee

B. Section 2: Delivery of the Thing Sold

1. Methods of Delivery (1497)
a. By actual or real delivery
b. By constructive or legal delivery
c. By delivery in any other manner signifying an agreement that the possession is transferred
to the vendee

2. Kind of Constructive Delivery/Quasi-Tradition (1498-1503)

a. By execution of a public instrument
b. By traditio symbolica
c. By tradition longa manu
d. By tradition brevi manu
e. By tradition constituttum possessorium
f. By quasi-traditio

3. Obligation to Deliver the Fruits and Accessories of the Thing Sold (1537)
- The vendor is bound to deliver the thing sold and its accessions in the condition in which
they were upon the perfection of the contract
- All the fruits shall pertain to the vendee from the day on which the contract was perfected

4. Who Bears the Risk of Loss after the Delivery of the Determinate Thing (1504)
- GR: seller bears the risk of loss until ownership transfers to the buyer; buyer bears the risk
of loss if ownership was already transferred to the buyer
- EXCEPTIONS:
a. Where the delivery of the goods has been made to the buyer or to a bailee for the
buyer, in pursuance of the contract and the ownership in the goods has been retained
 by the seller merely to secure performance by the buyer of his obligations under the
contract, the goods are at the buyer’s risk from the time of such delivery;
b. Where actual delivery has been delayed through the fault of either the buyer or seller
the goods are at the risk of the party in fault
5. Loss, Deterioration or Improvement of the Thing After Perfection but Before its Delivery (1538)
- Rules in article 1189 applies and vendor is considered the debtor:
a. If the thing is lost without the fault of the debtor, the obligation shall be extinguished;
b. If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it
is understood that the thing is 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;
c. When the thing deteriorates without the fault of the debtor, the impairment is to be
borne by the creditor;
d. If it deteriorates without the fault of the debtor, the creditor may choose between the
rescission of the obligation and its fulfillment, with indemnity for damages in either
case;
e. If the thing is improved by its nature or by time, the improvement shall inure to the
benefit of the creditor;
f. If it is improved at the expense of the debtor, he shall have no right than that granted
to the usufructuary.

6. Sale of Goods by a Non-Owner (1505)

- when the seller is not the owner of the goods or does not sell then under authority or
consent of the owner, the buyer acquires no better title to the goods than the seller has,
unless the owner of the goods is by his conduct precluded from denying the seller’s
authority to sell
- EXCEPTIONS:
a. The provisions of any factors’ acts, recording laws or any other provision of law
enabling the apparent owner of the goods to dispose of them as if he were the true
owner thereof;
b. The validity of any contract of sale under statutory power of sale or under the order of
a court of competent jurisdiction;
c. Purchases made in a merchant’s store, or in fairs or markets in accordance with the
Code of Commerce and special laws

7. Sale of Goods by a Person having a Voidable Title (1506)

- If the seller has only a voidable title to the goods, the buyer acquires a good title to the
goods provided he buys them:
a. Before the title of the seller has been avoided
b. In good faith for value
c. Without notice of the seller’s defect of title

8. Remedy of an Owner Who is Unlawfully Deprived of His Movable Property

 a. Replevin – it is an action for the recovery of personal property. It is both a principal remedy
and a provisional relief. When utilized as a principal remedy, the objective is to recover
possession of personal property that may have been wrongfully detained by another.
When sought as a provisional relief, it allows a plaintiff to retain the contested property
during the pendency of the action.
b. Accion interdictal - Accion interdictal comprises two distinct causes of action, namely,
forcible entry (detentacion) and unlawful detainer ( desahuico).  In forcible entry, one is
deprived of physical possession of real property by means of force, intimidation, strategy,
threats, or stealth whereas in unlawful detainer, one illegally withholds possession after the
expiration or termination of his right to hold possession under any contract, express or
implied. The two are distinguished from each other in that in forcible entry, the possession
of the defendant is illegal from the beginning, and that the issue is which party has prior  de
facto possession while in unlawful detainer, possession of the defendant is originally legal
but became illegal due to the expiration or termination of the right to possess.
c. Accion publiciana - Accion publiciana is the plenary action to recover the right of
possession which should be brought in the proper regional trial court when dispossession
has lasted for more than one year. It is an ordinary civil proceeding to determine the better
right of possession of realty independently of title. In other words, if at the time of the filing
of the complaint more than one year had elapsed since defendant had turned plaintiff out
of possession or defendants possession had become illegal, the action will be, not one of
the forcible entry or illegal detainer, but an accion publiciana. On the other
hand, accion reivindicatoria is an action to recover ownership also brought in the proper
regional trial court in an ordinary civil proceeding.

d. Accion reinvidicatoria - Accion reivindicatoria or accion de reivindicacion is thus an action

whereby plaintiff alleges ownership over a parcel of land and seeks recovery of its full
possession. It is different from accion interdictal or accion publiciana where plaintiff merely
alleges proof of a better right to possess without claim of title.

e. Writ of possession - A writ of possession is a writ of execution employed to enforce a

judgment to recover the possession of land. It commands the sheriff to enter the land and
give possession of it to the person entitled under the judgment.
f. Writ of preliminary injunction - an order granted at any stage of an action or proceeding
prior to the judgment or final order, requiring a party or a court, agency or a person to
perform to refrain from performing a particular act or acts.

9. Documents of Title
- It is where it is stated that the goods referred to therein will be delivered to the bearer, or to
the order of any person named in such document
- Refer to goods and not to money
- Serves as an evidence of transfer of title, transfer of possession and contract between the
parties who are bound by its terms
- Most common forms of documents of title:
 a. Bill of lading - a contract and a receipt for the transport of goods and their delivery to
the person named therein, to order, or to bearer
b. 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
c. 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
- Classes of documents of title:
a. 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
b. Non-negotiable documents of title - those by the terms of which the goods covered are
deliverable to a specified person

10. Place and Time of Delivery (1521)

- Place of delivery:
a. Where there is an agreement, express or implied, the place of delivery is that agreed upon;
b. Where there is no agreement, the place of delivery is that determined by usage of trade;
c. Where there is no agreement and there is also no prevalent usage, the place of delivery is
the seller’s place of business;
d. In any other case, the place of delivery is the seller’s residence; and
e. In case of specific goods, which to the knowledge of the parties at the time the contract
was made were in some other place, that place is the place of delivery, in the absence of
any agreement or usage of trade to the contrary
- Time of delivery:
a. If no time is fixed by the contract, then the seller is bound to send the goods to the
buyer within a reasonable time.
b. If the contract provides a fixed time for performance, the question is whether time is of
the essence, and if so, whether correct performance was offered within that time.
c. Where the contract does not specify the time for delivery so that delivery is to be made
within a reasonable time, time is not of the essence.

11. Incomplete Delivery (1522)

a. Delivery of goods less than quantity contracted – buyer may reject the goods delivered
- Buyer may accept the goods in which case he must pay for their (1) price at the contract
rate if he knew that no more were to be delivered or (2) the fair value to him of the goods, if
he did not know that the seller is going to be guilty of a breach of contract.
b. Delivery of goods more than quantity contracted – buyer may accept the quantity
contracted fore and reject the excess
- If buyer accepts all the goods delivered, he makes himself liable for the price of all of them.
 c. Delivery of goods mixed with others – the buyer may accept those which are in
accordance with the contract and reject the rest. The buyer may also accept them all if he
so desires.

12. Delivery of the Goods to a Carrier or a Courier (1523)

a. Delivery to carrier on behalf of buyer
GR: Delivery of such goods to the carrier6 constitutes delivery to the buyer, whether the
carrier is named by the buyer or not.
EXCEPTIONS: (1) Where there is a contract of sale of specific goods, the seller may, by
the terms of the contract, reserve the right of possession or ownership in the goods until
certain conditions have been fulfilled. The right of possession or ownership may be thus
reserved notwithstanding the delivery of the goods to the buyer or to a carrier or other
bailee for the purpose of transmission to the buyer; (2) Where goods are shipped, and by
the bill of lading the goods are deliverable to the seller or his agent, or to the order of the
seller or of his agent, the seller thereby reserves the ownership in the goods. But if, except
for the form of the bill of lading, the ownership would have passed to the buyer on
shipment of the goods, the seller’s property in the goods shall be deemed to be only for the
purpose of securing performance by the buyer of his obligations under the contract; (3)
Where goods are shipped, and by the bill of lading the goods are deliverable to the order
of the buyer or of his agent, but possession of the bill of lading is retained by the seller or
his agent, the seller thereby reserves a right to the possession of the goods as against the
buyer; (4) when a contrary intent appears, that is, the parties did not intend the delivery of
the goods to the buyer through the carrier; (5) The seller is not responsible for misdelivery
by the carrier where the carrier was chosen and authorized by the buyer to make the
delivery
b. Seller’s duty after delivery to carrier: (1) The seller must make such contract with the
carrier on behalf of the buyer as may be reasonable under the circumstances; (2) the seller
must give notice to the buyer as may enable him to insure the goods during their transit if
under the circumstances it is usual to insure them.
c. Shipping Terms:
(1) C.O.D. – collect on delivery; the carrier acts for the seller in collecting the purchase
price
(2) F.O.B. – free on board; the goods are to be delivered free of expense to the buyer to
the point where they are F.O.B.; either point of shipment or point of destination
(3) C.I.F. – 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 up
to the point of destination

13. When the Vendor is not bound to deliver (1524 and 1536)
a. If the buyer has not paid the price
b. No period for payment has been fixed in the contract
c. A period for payment has been fixed in the contract but the buyer has lost the right to make
use of the time
14. Unpaid Seller (1525-1535)
- The seller is deemed to be an unpaid seller either:
a. When the whole of the price has not been paid or tendered; or
b. 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 the dishonor of the instrument, the insolvency of the buyer, or otherwise
- Remedies of an Unpaid Seller:
a. Ordinary Remedies: (1) Action or Price – exercised when ownership has passed to the
buyer; price is payable on a day certain; and goods cannot readily be resold for
reasonable price and Article 1596 is not applicable; (2) Action for Damages – in case
of the wrongful neglect or refusal by the buyer to accept or pay for the thing sold
b. Special Remedies: (1) Possessory Lien – seller not bound to deliver if buyer has not
paid him the price; it is exercisable only in the following circumstances; goods sold
without stipulation, goods sold on credit but term of credit has expired, buyer becomes
insolvent; (2) Stoppage in Transitu – Requisites: insolvent buyer, seller must surrender
the negotiable document of title, if any, seller must bear the expense of the delivery of
the goods after the exercise of the right, seller must either actually take possession of
the goods sold or give notice of his claim to the carrier or other person in possession,
goods must be in transit, unpaid seller; (3) Special Right to Resell the Goods –
exercised when goods are perishable, stipulated the right of resale in case of default,
or buyer in default for unreasonable time; and (4) Special Right to Rescind –
requisites: expressly stipulated or buyer is in default for an unreasonable time and
notice needed to be given by seller to buyer.

15. Sale of an Immovable at a Rate per Unit (1539-1541)

a. If the sale of real estate should be made with a statement of its area, at the rate of a
certain price per unit of measure or number, the cause of the contract with respect to the
vendee is the number of such units or, if you wish, the thing purchased as determined by
the stipulated number of units. The vendor must deliver the entire property agreed upon.
b. If all that is included within the stipulated boundaries is not delivered, then the object of the
contract, its cause as far as the vendee is concerned, is not delivered. Hence, he is
entitled to rescind it. He may, however, enforce the contract with the corresponding
decrease in price.
c. When vendee entitled to rescind sale of real property: (1) If the lack in area is atleast 1/10 th
than stated or stipulated. The 1/10 th mentioned must be based on the area stipulated in the
contract, and not on the real area which the thing may actually have; (2) If the deficiency in
the quality specified in the contract exceeds 1/10 th of the price agreed upon; and (3) if the
vendee would not have brought the immovable had he known of its smaller area or inferior
quality irrespective of the extent of the lack in area or quality.
d. If the area or number in the immovable is greater than that stipulated in the contract, the
vendee may accept the area included in the contract and reject the rest. If he accepts the
whole, he makes himself liable for the price of the same at the contract rate.
16. Sale of an Immovable made for a Lump Sum (1542)
a. If the sale is made for a lump sum, and not so much per unit of measure or number, the
cause of the contract is the thing sold independent and irrespective of its number or
measure. In this case, the law presumes that the purchaser had in mind a determinate
price for the real estate and that he ascertained its area and quality before the contract
was perfected.
b. If the vendor cannot deliver to the vendee all that is included within the boundaries
mentioned in the contract, the latter has the option to reduce the price in proportion to the
deficiency or to set aside the contract. The phrase “should he not be able to do so” refers
to a situation when the vendor, either because a part or parcel of the real estate does not
belong to him, cannot deliver all that is included within the boundaries.
c. In case of conflict between the area included within the stipulated boundaries and that
which the title shows, the former shall prevail when the boundaries are certain and no
alteration thereof has been proven.
d. Where the identity of the disputed property has been clearly established by both parties’
pleadings, the mistake in designating the property in the deed of sale “does not vitiate
consent of the parties or affect the validity and binding effect of the contract.
e. The words when used in connection with quantity or distance, are words of safety and
caution, intended to cover some slight or unimportant inaccuracy, and, while enabling an
adjustment to the imperative demands of fixed monuments, they do not weaken or destroy
the statements of distance and quantity when no other guides are furnished.
f. The proposition of law is to the effect that “where it appears that the land is so described
by boundaries as to put its identification beyond doubt,” an erroneous statement relative to
the area of the questioned parcel may be disregarded because what really defines a piece
of ground is not the area mentioned in its description but the boundaries therein laid down
as enclosing the land and indicating its limits.
g. The above rule is not applicable where the boundaries relied upon do not identify the land
beyond doubt. In such case, the area stated in the document should be followed.

17. Double Sales (1544)

a. There is double sale when the same object of the sale is sold to different vendees.
b. Ownership of Property:
(1) Movable – owner who is first to possess in good faith
(2) Immovable – (a) first to register in good faith; (b) no inscription, first to possess in good
faith; (c) no inscription and no possession in good faith – person who presents oldest
title in good faith