TOPIC 9: GENERAL PROVISIONS

(ENGAGE)

How do you define goods?

(EXPLORE AND EXPLAIN)

Definition of Terms:
(1) “Document of title to goods” includes any bill of lading, dock warrant,
“quedan,” or warehouse receipt or order for the delivery of goods, or any other
document used in the ordinary course of business in the sale of transfer of goods, as
proof of the possession or control of the goods, or authorizing or purporting to authorize
the possessor of the document to transfer or receive either by indorsement or by
delivery, goods represented by such document.
“Goods” includes all chattels personal but not things in action or money of legal
tender in the Philippines. The term includes growing fruits or crops.
“Order” relating to documents of title means an order by indorsement on the
documents.
“Quality of goods” includes their state or condition.
“Specific goods” means goods identified and agreed upon at the time a contract of
sale is made.
An antecedent or pre-existing claim, whether for money or not, constitutes
“value” where goods or documents of title are taken either in satisfaction thereof or as
security therefor.
(2)A person is insolvent within the meaning of this Title who either has ceased to
pay his debts in the ordinary course of business or cannot pay his debts as they
become due, whether insolvency proceedings have been commenced or not.
(3) Goods are in a “deliverable state” within the meaning of this Title when they
are in such a state that the buyer would, under the contract, be bound to take delivery of
them.

(ELABORATE AND EVALUATE)

Activity 2

What are included in document of title?

Assessment:
TOPIC 10: BARTER OR EXCHANGE

(ENGAGE)

How do you barter goods?

(EXPLORE AND EXPLAIN)

Barter defined.
By the contract of barter or exchange one of the parties binds himself to give one
thing in consideration of the other’s promise to give another thing.

Perfection and consummation of the contract.

(1) The contract of barter is perfected from the moment there is a meeting of
minds upon the things promised by each party in consideration of the other.
(2) It is consummated from the time of mutual delivery by the contracting parties
of things they promised.

Effect of eviction.
Each contracting party warrants to the other that he has right to transfer ownership
of the thing exchanged.
In case of eviction, the injured party is given the option either to recover the
property he has given in exchange with damages or only claim an indemnity for damages.
The right to recover is, however, subject to the rights of innocent third persons.

Applicability of provisions on sales.

Barter is a mutual sale. Each party really is both a vendor and a vendee. For
this reason, the provisions on sales are also applicable to barter.

(ELABORATE AND EVALUATE)

Activity 2

When is barter perfected?

Assessment:

Why is the provision on sales applicable in barter?

TOPIC 11: BULK SALES LAW

(ENGAGE)

What do you think is sale in bulk?

(EXPLORE AND EXPLAIN)

THE BULK SALES LAW (Act No. 3952, as amended.) APPROVED: December 1,

1932. Purpose of the law.

The Bulk Sales Law is designed to prevent the defrauding of creditors by the secret
sale or disposal or mortgage in bulk of all or substantially all of a merchant’s stock of
goods.

Scheme of the law.

The general scheme of the law is to declare such bulk sales fraudulent and void as to
creditors of the vendor, or presumptively so, unless specified formalities are observed,
such as the demanding and the giving of a list of creditors, the giving of actual or
constructive notice to such creditors, by record or otherwise, and the making of an
inventory.

When sale or transfer in bulk.

A sale and transfer in bulk under the Bulk Sales Law is any sale:
(1) of a stock of goods, wares, merchandise, provisions, or materials otherwise than
in the ordinary course of trade and the regular prosecution of the business; or
(2) of all or substantially all, of the business or trade; or
(3) of all or substantially all, of the fixtures and equipment used in the business of
the vendor, mortgagor transferor, or assignor.

Meaning of stock.
The common use of the term stock when applied to goods in a mercantile house
refers to that which are kept for sale.

Meaning of merchandise.
Merchandise must be construed to mean such things as are usually bought and sold
in trade by merchants. It means something that is sold everyday, and is constantly going
out of the store and being replaced by other goods.

Meaning of fixtures.
The term fixtures refers to such articles of merchandise usually possessed and
annexed to the premises occupied by merchants to enable them better to store, handle,
and display their wares and which are commonly known as trade fixtures, although
removable without material injury to the premises at or before the end of tenancy.
Protection accorded to creditors by the law.
The law protects or benefits the creditors as follows:
(1) It requires the vendor, etc. to deliver to the vendee, etc. a sworn written
statement of the names and addresses of all creditors to whom said vendor, etc. may be
indebted together with the amount of indebtedness due or to become due (Sec. 3.); and
(2) It requires the vendor, etc. at least ten (10) days before the sale, etc., to make a
full detailed inventory showing the quantity and the cost price of the goods and to
notify every creditor of the price, terms, and conditions of the sale, etc. (Sec. 5.)

Acts punished by law.

They are:
(1) Knowingly or willfully making or delivering a statement as required by the
Act (Sec. 3.) which does not include the names of all the creditors of the vendor, etc.
with the correct amount due and to become due or which contains any false or untrue
statement (Sec. 6.); and
(2)Transferring title to any stock of goods, wares, merchandise, provisions or
materials sold in bulk without consideration or for a nominal consideration only. (Sec.
7.)

(ELABORATE AND EVALUATE)

Activity 2

How do you understand the scheme of Bulk Sales Law?

Assessment:

Explain how the creditors are protected in Bulk Sales Law.