NOTES ON SALES

1. In Dation in payment, it is governed by the laws on sales if the pre-existing debt is in

money. If it involves another thing, it is govern by the law on novation.
2. Contract for a piece of work if it is to be delivered within 6 months, not covered by the
statute frauds, while contract of sale if it is to be delivered within 6 months, it is
covered by the Statute of Frauds. If more than 6 months, both are governed by the
Statute of Frauds.
3. Contract for a piece of work is one where the item is not being manufactured in the
ordinary course of business of the obligor. (Massachusetts rule)
4. There can be a sale of right. This is called assignment of a right. But an assignment of
a right may not be a sale, it can be a donation or a dation in payment.
5. In absolute sale, no reservation of rights.
6. A minor may be bound to a contract if he actively misrepresented.
7. Sale of private lands to aliens is void. In sale of private lands to aliens which was
subsequently sold to a Filipino, the defect is cured. Even a contract is void because a
private land was sold to an alien, whatever defect in that contract was cured by when
that land was thereafter acquired by a Filipino. If the action is filed when the land is
already acquired by the Filipino, the land can no longer be recovered.
8. Sale of a generic thing is valid if at the time of sale, that generic thing could be made
determinate at the time the contract is entered into and without the necessity of a new
or further agreement between the parties. It is determinate when it is particularly
designated or physically segregated.
9. Sale of future things may be the object of a contract of sale as long as the object has
the potentiality of existence. (discussed)
10. The contract of sale is perfected upon acceptance of the option to buy, although it is
not accompanied by an actual payment of the price. (Nietes v. Court of Appeals, 46
SCRA 654)
11. A sale between a lawyer and his client involving property and rights in litigation is
expressly prohibited. In settlement of estate proceedings, the property is still
considered under litigation after the project of partition is approved but before the
estate is declared closed and terminated (Fornilda vs. Br 164 RTC IVth Judicial
Region, Pasig, 166 SCRA 281).
12. In Director of Lands vs. Ababa (88SCRA 513), the Supreme Court sanctioned
(permitted) a contingent fee arrangement, whereby the lawyer was to get a share of
the property under litigation, on the ground that the transfer of the thing would take
effect only after the finality of a favorable judgment.
13. In a contract of sale, the vendor need not be the owner at perfection but only upon
delivery.
14. The indorsement of a document of title shall not make the indorser liable for any failure
on the part of the bailee who issued the document or previous indorsers thereof to
fulfill their respective obligations. (Art. 1517) -8
15. In double sales, the governing principle is prius tempore, potior jure (first in time
stronger in right). -9
16. Knowledge by the first buyer of the second sale cannot defeat the first buyer’s rights
except when the second buyer first registers in good faith the second sale (Olivares v.
Gonzales, 159 SCRA 33)
17. Knowledge gained by the second buyer of the first sale defeats his rights even if he is
first to register, since such knowledge taints his registration with bad faith (Astorga vs.
CA, 133 SCRA 748). -10
18. Before the second buyer can obtain priority over the first, he must show that he has
acted in good faith throughout – from the time of acquisition until title is transferred to
him by registration or failing registration, be delivery of possession. (Uraca vs. CA, 278
SCRA 702 cited in Angel Bautista vs. CA, 322 SCRA 365).
19. In cases of double sales, what finds relevance and materiality is not whether or not
said second buyer is a buyer in good faith but whether or not the second buyer
registers such second sale in good faith, that is without knowledge of any defect in the
title of the property sold. (Bayoca vs. Nogales, 340 SCRA 154)
20. The rule on double sales finds hardly any relevance in an ordinary donation where the
law requires the donor to have ownership of the thing or the real right he donates at
the time of its perfection since a donation constitutes a mode, not just a title, in an
acquisition and transmission of ownership.
21. Things subject to a resolutory condition may meanwhile be the object of the contract of
sale.
22. It is at perfection, not consummation, when a contract is to be adjudged as being
either valid or not.
23. In a sale of large cattle, a transfer of the Certificate of Registration is required. (Sec.
22, Act No. 1147)
24. The expenses for the execution and registration of the sale shall be borne by the
vendor, unless there is a stipulation to the contrary. (Art. 1487, Civil Code)
25. A sale for Php 1.00 plus an unspecified and unquantified services, of a valuable piece
of real estate was held to be fictitious and void (Bagnas v. Court of Appeals, 176
SCRA 159)
26. The thing solds shall be understood as delivered when it is placed in the control and
possession of the vendee. Art 1497, Civil Code, Chrysler Phils Corp. Vs. CA, 23 SCRA
1217)
27. A negotiable document of title is transferred by negotiation (delivery or indorsement) or
by assignment; a non-negotiable document may only be transferred by assignment,
the transferee does not acquire title more than what the transferor had or had ability to
convey.
28. A non negotiable document of title cannot be negotiated and the indorsement of such
a document gives the transferee no additional right. (Art. 1511, Civil Code.)