Since 1977

Regulatory Framework for Business Transactions ATTY. ONG

RFBT.2903 – SALES OCT 2020

SALES • The sole owner of a thing may sell an undivided interest

therein. (1463)
NATURE AND FORM OF THE CONTRACT • The contract of sale is perfected at the moment there is
Contract of sale one of the contracting parties obligates himself

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a meeting of minds upon the thing which is the object
to transfer the ownership and to deliver a determinate thing, of the contract and upon the price. From that moment,
and the other to pay therefore a price certain in money or its the parties may reciprocally demand performance,

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equivalent. (1458) A contract of sale may be absolute or subject to the provisions of the law governing the form
conditional. of contracts. (1475)

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a. Parties are face to face – offer must be certain and
Contract of sale Agency to sell acceptance be absolute. Qualified acceptance
Buyer pay the price Agent remit the price to his constitutes counter offer.

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principal b. Negotiated thru phone – As if the parties are face to
Buyer become the owner Agent does not become the face
after delivery owner after delivery to c. Correspondence or thru telegram – Offeror receives
him. or has knowledge of the acceptance by the offeree.
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There is warranty by the No warranty by the agent d. Subject to suspensive condition – Condition is
seller fulfilled
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• The ownership of the thing sold shall be transferred to

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• A contract for the delivery at a certain price of an article the vendee upon the actual or constructive delivery
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which the vendor in the ordinary course of his business thereof. (1477) However, the parties may stipulate that
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manufactures or procures for the general market, whether ownership in the thing shall not pass to the purchaser
until he has fully paid the price. (1478)
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the same is on hand at the time or not, is a contract of sale,

but if the goods are to be manufactured specially for the 2. Object or subject matter – determinate thing which is the
object of the contract
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customer and upon his special order, and not for the general
market, it is a contract for a piece of work. (1467) • The thing must be licit and the vendor must have a right
to transfer the ownership thereof at the time it is
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Contract of sale Piece of work delivered. (1459)

Ordinary course of Not ordinary course of • Goods which may be the object of contract of sale
business business a. Existing goods, owned or possessed by the seller,
Produce for the general Manufactured specially b. Future goods or goods to be manufactured, raised,
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market or acquired by the seller after the perfection of the

Covered by statute of fraud Not covered by statute of contract of sale. There may be a contract of sale of
if the sale of personal fraud provided it will be goods, whose acquisition by the seller depends
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property is P500 or more performed within one year. upon a contingency which may or may not happen.
or sale of real property (1462) Things having a potential existence may be
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regardless of amount. the object of the contract of sale. The efficacy of

the sale of a mere hope or expectancy is deemed
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School of thought subject to the condition that the thing will come
1. Massachusetts Rule – If specially done at the order of into existence. The sale of a vain hope or
another is a contract for a piece of work; otherwise it is a expectancy is void. (1461)
contract for a piece of work. (Philippine Setting)
2. New York Rule – If the thing already exists, it is a sale; if Emptio rei sperati Emptio spei
not it is a contract for a piece of work. Sale of an expected thing Sale of the hope itself
3. English Rule – If material is more valuable, it is a contract If the expected thing does It does not matter whether
of sale; if skill is more valuable, it is a contract for a piece not materialize the sale notthe expected materialized
work. effective. or not; what is important is
that the hope itself validly
Characteristics of a contract of sales existed.
1. Consensual Refers to future thing that Refers to present thing –
2. Bilateral which is expected for certainly the hope or
3. Onerous expectancy already exists
4. Commutative
5. Nominate • A thing is determinate when it is particularly
6. Principal designated or physical segregated from all other of the
same class. The requisite that a thing be determinate is
Elements of contract of sales satisfied if at the time the contract is entered into, the
1. Consent thing is capable of being made determinate without
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the necessity of a new or further agreement between
the parties. (1460)
• Things subject to a resolutory condition may be the
object of the contract of sale. (1465)
• In the case of fungible goods, there may be a sale of an
undivided share of a specific mass, though the seller
purports to sell and the buyer to buy a definite number,
weight or measure of the goods in the mass, and though
the number, weight or measure of the goods in the mass
is undetermined. By such a sale the buyer becomes
owner in common of such a share of the mass as the
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number, weight or measure bought bears to the number,
weight or measure of the mass. If the mass contains less
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than the number, weight or measure bought, the buyer
becomes the owner of the whole mass and the seller is
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bound to make good the deficiency from goods of the
same kind and quality, unless a contrary intent appears.
(1464)
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3. Cause or Consideration (Price) - price certain in money or
its equivalent.
▪ Gross inadequacy of price does not affect a contract of
sale, except as it may indicate a defect in the consent, or
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that the parties really intended a donation or some other
act or contract. (1470)
▪ The fixing of the price can never be left to the
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discretion of one of the contracting parties. However, if
the price fixed by one of the parties is accepted by the
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other, the sale is perfected. (1473)
▪ Where the price cannot be determined or in any other
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manner, the contract is inefficacious. However, if the
thing or any part thereof has been delivered to and
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appropriated by the buyer he must pay a reasonable
price therefor. What is a reasonable price is a question
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of fact dependent on the circumstances of each
particular case. (1474)
▪ If the price is simulated, the sale is void, but the act
may be shown to have been in reality a donation, or
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some other act or contract. (1471)
• When price certain:
a. Specific amount agreed upon
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b. No specific amount agreed upon
1. Certainty with reference to another thing
certain
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2. Determination of price was left to the judgment
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of third person.
o Should such person or persons be unable or
unwilling to fix it, the contract shall be
inefficacious, unless the parties
subsequently agree upon the price.
o If the third person or persons acted in bad
faith or by mistake, the courts may fix the
price.
o Where such third person or persons are
prevented from fixing the price or terms by
fault of the seller or the buyer, the party not
in fault may have such remedies against the
party in fault as are allowed the seller or the
buyer, as the case may be. (1469)
3. The price of securities, grain, liquids, and other
things shall also be considered certain, when
the price fixed is that which the thing sold
would have on a definite day, or in a particular
exchange or market, or when an amount is
fixed above or below the price on such day, or
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in such exchange or market, provided said
amount be certain. (1473)
• If the consideration of the contract consists partly in
money, and partly in another thing. (1468)
a. Manifest intention of the parties.
b. If such intention does not clearly appear,
1. Barter if value of the thing > money paid
2. Sale if value of the thing =< money paid.
• In the case of a sale by auction:
a. Where goods are put up for sale by auction in lots,
each lot is the subject of a separate contract of sale.
b. A sale by auction is perfected when the auctioneer
announces its perfection by the fall of the hammer,
or in other customary manner. Until such
announcement is made, any bidder may retract his
bid; and the auctioneer may withdraw the goods
from the sale unless the auction has been
announced to be without reserve.
c. A right to bid may be reserved expressly by or on
behalf of the seller, unless otherwise provided by
law or by stipulation.
d. Where notice has not been given that a sale by
auction is subject to a right to bid on behalf of the
seller, it shall not be lawful for the seller to bid
himself or to employ or induce any person to bid at
such sale on his behalf or for the auctioneer, to
employ or induce any person to bid at such sale on
behalf of the seller or knowingly to take any bid
from the seller or any person employed by him.
Any sale contravening this rule may be treated as
fraudulent by the buyer. (1476)
Kinds of promise (1479)
a. Bilateral promise to buy and sell reciprocally accepted.
b. Accepted unilateral promise to buy
c. Accepted unilateral promise to Sell.
• Policitation - Unaccepted unilateral promise or offer to sell
or buy a thing.
• Whenever earnest money is given in a contract of sale, it
shall be considered as part of the price and as proof of
the perfection of the contract. (1482)
• Risk of loss (1480)
1. Fungible and non fungible things sold independently
and for a single price, or without consideration of their
weight, number, or measure.
a. Lost before perfection – Seller (Res perit domino)
b. Lost at the time of perfection – Seller (Res perit
domino)
c. After perfection but before delivery – Buyer
(exception to Res perit domino)
d. After delivery – Buyer (Res perit domino)
2. Fungible things be sold for a price fixed according to
weight, number, or measure.
General rule: Vendor shall suffer (Exception to the rule
that vendee shall suffer the risk of loss after perfection
but after delivery)
Exception: When the goods have been weighed,
counted, or measured and delivered, unless the latter
has incurred in delay.
• Unless otherwise agreed, the goods remain at the seller's
risk until the ownership therein is transferred to the
buyer, but when the ownership therein is transferred to
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the buyer the goods are at the buyer's risk whether actual
delivery has been made or not, except that: (1504)
1. Where 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;
2. Where actual delivery has been delayed through the
fault of either the buyer or seller the goods are at the
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risk of the party in fault.
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• Effects of the contract when the thing sold has been lost
(1493)
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a. If at the time the contract of sale is perfected, the thing
which is the object of the contract has been entirely
lost, the contract shall be without any effect.
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b. But if the thing should have been lost in part only, the
vendee may choose between withdrawing from the
contract and demanding the remaining part, paying its
price in proportion to the total sum agreed upon.
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c. Where the parties purport a sale of specific goods, and
the goods without the knowledge of the seller have
perished in part or have wholly or in a material part so
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deteriorated in quality as to be substantially changed in
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character, the buyer may at his option treat the sale:
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(1494)
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1. As avoided; or
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2. As valid in all of the existing goods or in so much
thereof as have not deteriorated, and as binding the
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buyer to pay the agreed price for the goods in
which the ownership will pass, if the sale was
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divisible.
• Sale of good by description
a. Sample or Description - the contract may be rescinded
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if the bulk of the goods delivered do not correspond
with the description or the sample.
b. Sample and description - the bulk of goods must
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correspond with the sample and the description.
The buyer shall have a reasonable opportunity of comparing
the bulk with the description or the sample. (n)
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• Forms
General rule - a contract of sale may be made in writing, or
by word of mouth, or partly in writing and partly by word
of mouth, or may be inferred from the conduct of the
parties. (1483)
Exception:
a. Contract covered by statute of fraud (1403)
1. Sale of property not to be performed within a year
from the making thereof;
2. Sale of real property or of an interest therein
regardless of the price;
3. Sale of personal property at a price not less than
five hundred pesos (P500)
b. Contract where form is required for validity
1. Sale of a piece of land or any interest therein is
through an agent, the authority of the latter shall be
in writing. (1874)
• Recto law
a. In a contract of sale of personal property, the price of
which is payable in installments.
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b. Contracts purporting to be leases of personal property
with option to buy, when the lessor has deprived the
lessee of the possession or enjoyment of the thing
The vendor may exercise any of the following remedies
(alternative and not cumulative or successive remedy)
1. Exact fulfillment of the obligation, should the vendee
fail to pay;
2. Cancel the sale, should the vendee's failure to pay cover
two or more installments. Stipulation that the
installments or rents paid shall not be returned to the
vendee or lessee shall be valid insofar as the same may
not be unconscionable under the circumstances. (1486)
3. Foreclose the chattel mortgage on the thing sold, if one
has been constituted, should the vendee's failure to pay
cover two or more installments. In this case, he shall
have no further action against the purchaser to recover
any unpaid balance of the price. Any agreement to the
contrary shall be void.
• The expenses for the execution and registration of the
sale shall be borne by the vendor, unless there is a
stipulation to the contrary. (1487)
• The expropriation of property for public use is governed by
special laws. (1488)
Maceda Law - Realty Installment Buyer Act (R.A. 6552)
Coverage - All transactions or contracts involving the sale or
financing of real estate on installment payments, including
residential condominium apartments but excluding industrial
lots, commercial buildings and sales to tenants where the buyer
has paid at least two years of installments, the buyer is
entitled to the following rights in case he defaults in the
payment of succeeding installments: (Sec 3)
a. To pay, without additional interest, the unpaid installments
due within the total grace period earned by him which is
hereby fixed at the rate of one month grace period for every
one year of installment payments made: Provided, That this
right shall be exercised by the buyer only once in every five
years of the life of the contract and its extensions, if any.
b. If the contract is cancelled, the seller shall refund to the
buyer the cash surrender value of the payments on the
property equivalent to fifty per cent of the total payments
made, and, after five years of installments, an additional
five per cent every year but not to exceed ninety per cent
of the total payments made: Provided, That the actual
cancellation of the contract shall take place after thirty
days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract
by a notarial act and upon full payment of the cash
surrender value to the buyer.
Down payments, deposits or options on the contract shall be
included in the computation of the total number of
installment payments made.
• In case where less than two years of installments were
paid, the seller shall give the buyer a grace period of not
less than sixty days from the date the installment became
due.
If the buyer fails to pay the installments due at the
expiration of the grace period, the seller may cancel the
contract after thirty days from receipt by the buyer of the
notice of cancellation or the demand for rescission of the
contract by a notarial act. (Sec 4)
• The buyer shall have the right to sell his rights or assign the
same to another person or to reinstate the contract by
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updating the account during the grace period and before
actual cancellation of the contract. The deed of sale or
assignment shall be done by notarial act. (Sec 5)
• The buyer shall have the right to pay in advance any
installment or the full unpaid balance of the purchase price
any time without interest and to have such full payment of
the purchase price annotated in the certificate of title
covering the property. (Sec 6)
• Any stipulation in any contract hereafter entered into shall
be null and void. (Sec 7)
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CAPACITY TO BUY OR SELL
General rule: All persons who can obligate themselves, may
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enter into a contract of sale (1489) Where necessaries are those
sold and delivered to a minor or other person without capacity
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to act, he must pay a reasonable price therefor.
Exception: Sale of property including sales in legal redemption,
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compromises and renunciations. (1492) by the following:
1. The husband and the wife cannot sell property to each
other, except: (1490)
a. When a separation of property was agreed upon in the
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marriage settlements; or
b. When there has been a judicial separation of property
Effect of sale: Void
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2. Those persons who cannot acquire by purchase, even at a
public or judicial auction, either in person or through the
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mediation of another. (1491)
a. The guardian, the property of the person or persons who
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may be under his guardianship;
b. Agents, the property whose administration or sale may
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have been entrusted to them, unless the consent of the
principal has been given;
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c. Executors and administrators, the property of the estate
under administration;
d. Public officers and employees, the property of the State
or of any subdivision thereof, or of any government-
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owned or controlled corporation, or institution, the
administration of which has been intrusted to them; this
provision shall apply to judges and government experts
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who, in any manner whatsoever, take part in the sale;
e. Justices, judges, prosecuting attorneys, clerks of
superior and inferior courts, and other officers and
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employees connected with the administration of justice,
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the property and rights in litigation or levied upon an
execution before the court within whose jurisdiction or
territory they exercise their respective functions; this
prohibition includes the act of acquiring by assignment
and shall apply to lawyers, with respect to the property
and rights which may be the object of any litigation in
which they may take part by virtue of their profession.
f. Any others specially disqualified by law.
Effect of sale: 1-3 Voidable; 4-6 Void public interest is
involved
OBLIGATIONS OF THE VENDOR
• The vendor is bound to transfer the ownership of and
deliver, as well as warrant the thing which is the object of
the sale. (1495)
• The ownership of the thing sold is acquired by the vendee
from the moment it is delivered to him (actual or
constructive) or in any other manner signifying an
agreement that the possession is transferred from the vendor
to the vendee. (1496)
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a. Actual - The thing sold shall be understood as
delivered, when it is placed in the control and
possession of the vendee. (1497)
b. Constructive
1. Execution of public instrument (1498)
2. Traditio symbolica – in case of movable property
the delivery of the keys of the place or depository
where it is stored or kept.
a. Traditio longa manu - by the mere consent or
agreement of the contracting parties, if the thing
sold cannot be transferred to the possession of the
vendee at the time of the sale. (1499) (pointing out
the object)
3. Traditio brevi manu - if the vendor already in the
possession of the object for any other reason.
(1499) A possessor of a thing not as an owner,
becomes the possessor as owner (i.e. Lessor sells
the thing leased to the lessee)
b. Tradition constitutum possessorium. (1450) A
possessor of a thing as an owner retains possession
no longer as an owner, but in some other capacity.
This is the opposite of tradition brevi manu. (i.e. A
possessor vendor stay as tenant on the vendee)
4. Quasi delivery or quasi tradition (1451)
• Sale or return or on approval (1502)
a. On sale or return - the ownership passes to the buyer
of delivery, but he may revest the ownership in the
seller by returning or tendering the goods within the
time fixed in the contract, or, if no time has been fixed,
within a reasonable time. (Resolutory condition)
b. Sale on Approval or on Trial or on Satisfaction, or other
similar terms, the ownership do not pass to the buyer
except: (Suspensive condition)
1. When he signifies his approval or acceptance to the
seller or does any other act adopting the
transaction;
2. If he does not signify his approval or acceptance to
the seller, but retains the goods without giving
notice of rejection, then if a time has been fixed for
the return of the goods, on the expiration of such
time, and, if no time has been fixed, on the
expiration of a reasonable time. What is a
reasonable time is a question of fact.
• General Rule: Ownership of the goods sold passes to the
buyer upon their delivery to the carrier
Exception: (1503)
a. The seller reserves the right of possession or
ownership in the goods until certain conditions have
been fulfilled.
b. 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. 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.
c. Where goods are shipped, and by the bill of lading the
goods are deliverable to order of the buyer or of his
agent, but possession of the bill of lading is retained
by the seller or his agent.
d. Where the seller of goods draws on the buyer for the
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price and transmits the bill of exchange and bill of
lading together to the buyer to secure acceptance or
payment of the bill of exchange (Title is retained until
the bill of exchange is paid), the buyer is bound to
return the bill of lading if he does not honor the bill of
exchange, and if he wrongfully retains the bill of lading
he acquires no added right thereby.
If, however, the bill of lading provides that the goods
are deliverable to the buyer or to the order of the buyer,
or is indorsed in blank, or to the buyer by the consignee
named therein, one who purchases in good faith
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(acquire ownership), for value, the bill of lading, or
goods from the buyer will obtain the ownership in the
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goods, although the bill of exchange has not been
honored, provided that such purchaser has received
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delivery of the bill of lading indorsed by the consignee
named therein, or of the goods, without notice of the
facts making the transfer wrongful.
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• General Rule: Where goods are sold by a person who is not
the owner thereof, and who does not sell them under
authority or with the consent of the owner, the buyer
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acquires no better title to the goods than the seller had
(1505)
Exception:
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a. The owner of the goods is by his conduct precluded
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from denying the seller's authority to sell. (Estoppel)
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b. The provisions of any factors' act, recording laws, or
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any other provision of law enabling the apparent owner
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of goods to dispose of them as if he were the true owner
thereof;
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c. The validity of any contract of sale under statutory
power of sale or under the order of a court of
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competent jurisdiction;
Art. 559. The possession of movable property acquired
in good faith is equivalent to a title. Nevertheless, one
who has lost any movable or has been unlawfully
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deprived thereof may recover it from the person in
possession of the same.
If the possessor of a movable lost or which the owner
has been unlawfully deprived, has acquired it in good
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faith at a public sale, the owner cannot obtain its return
without reimbursing the price paid therefor.
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d. Purchases made in a merchant's store, or in fairs, or
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markets, in accordance with the Code of Commerce
and special laws.
e. Where the seller of goods has a voidable title thereto,
but his title has not been avoided at the time of the sale,
the buyer acquires a good title to the goods, provided he
buys them in good faith, for value, and without notice
of the seller's defect of title. (1506)
f. Where the seller subsequently acquires title
• Negotiable document of title – a document of title in which
it is stated that the goods referred therein will be delivered
to the bearer or to the order of any person named in such
document.
• Non-negotiable Document of Title – a document of title
which does not state that the goods referred to therein will
be delivered either to bearer or to the order of any person
named therein.
• Kinds of negotiable documents of title
1. bill of lading
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2. dock warrant;
3. quedan;
4. warehouse receipts or order; and
5. any other document used as proof of possession or as
authority to transfer the goods represented by it.
• IMPLIED Warranties of the person who negotiates a
document of title by indorsement or delivery
1. That the document is genuine;
2. That he has legal right to negotiate or transfer it;
3. That he has knowledge of no fact which would impair
validity or worth of the document; and
4. That he has a right to transfer the title to the goods and
that the goods are merchantable or fit for particular
purpose. (Art. 1516, CC)
• Unpaid seller:
1. When the whole of the price has not been paid or
tendered; and
2. When a bill of exchange or other negotiable instrument
has been received as a conditional payment and the
condition was broken by reason of dishonor, insolvency
of the buyer or otherwise. (Art. 1525, CC)
• Remedies of the unpaid seller, notwithstanding that the
ownership in the goods may have passed to the buyer
1. Possessory lien on the goods or right to retain them
for the price while he is in possession of them;
2. In case of insolvency of the buyer, right of stoppage in
transitu after he has parted with the possession of
them;
3. Right of resale; and
4. Right to rescind sale.
• Instances where the unpaid seller may retain the goods
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.
* The seller may exercise his right of lien or retention
notwithstanding that he is in possession of the goods as
agent or bailee for the buyer (Art. 1527, CC)
• Instances where the unpaid seller loses his right to
retain the goods
1. When he delivers the goods to a carrier or other
bailee for transmission to the buyer without reserving
ownership in the goods or the right to possession
thereof;
2. When the buyer or his agent lawfully obtains
possessions of the goods; and
3. By waiver thereof.
* The unpaid seller of goods, having lien thereon, does not
lose his lien by reason only that he has obtained judgment
for the price of the goods (Art. 1529, CC)
• Exercise of the right of stoppage in transitu
1. Obtaining actual possession; or
2. Giving notice of claim to the carrier or other bailee
• When notice of stoppage in transitu is given by the
seller to the carrier, or other bailee in possession of the
goods, he must redeliver the goods to, or according to
the directions of, the seller.
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• The expenses of such delivery must be borne by the
seller.
• If, however, a negotiable document of title representing
the goods has been issued by the carrier or other bailee,
he shall not obliged to deliver or justified in delivering
the goods to the seller unless such document is first
surrendered for cancellation
• Effect of sale of goods subject to lien or stoppage in
transit
a. Where goods not covered by negotiable document of
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title – The purchaser can acquire only such right as that
buyer then had.
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b. Where goods covered by negotiable document of title. -
No seller's lien or right of stoppage in transitu shall
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defeat the right of any purchaser for value in good faith
to whom such document has been negotiated.
R LE .H.
• When resale is allowable (1533)
1. Where the goods are perishable in nature
2. When the right to resell is expressly reserved in case
the buyer should make a default; and
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3. Where the buyer delays in the payment of the price
for an unreasonable time.
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Not essential to the validity of resale that notice of an
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intention to resell the goods be given by the seller to the
original buyer but giving or failure to give such notice
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shall be relevant in any issue involving the question
whether the buyer had been in default for an
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unreasonable time before the resale was made.
o It is, however, essential before the rescission be made
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that the unpaid seller should have a right of lien or
stopped the goods in transitu. (Art. 1533, CC)
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• Effect of resale
a. The seller is not liable for any profit made by such
resale, but may recover from the buyer damages for any
.J
loss occasioned by the breach of the contract of sale.
• It is not essential to the validity of resale that notice of an
TY
intention to resell the goods be given by the seller to the
original buyer. But where the right to resell is not based on
C
the perishable nature of the goods or upon an express
provision of the contract of sale, the giving or failure to
AT
give such notice shall be relevant in any issue involving the
question whether the buyer had been in default for an
unreasonable time before the resale was made.
• It is not essential to the validity of a resale that notice of the
time and place of such resale should be given by the seller
to the original buyer.
• The seller is bound to exercise reasonable care and
judgment in making a resale, and may make a resale either
by public or private sale. He cannot, however, directly or
indirectly buy the goods. (1533)
• Instances where the unpaid seller has the right of
rescission
1. Where he expressly reserved the right to do so in case
the buyer should make default; and
2. Where the buyer has been in default in the payment of
the price for unreasonable length of time.
o It is, however, essential before the rescission be made
that the unpaid seller should have a right of lien or
stopped the goods in transitu. (Art. 1534, CC)
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ATTY. ONG – OCT 2020
• The transfer of title shall not be held to have been rescinded
by an unpaid seller until he has manifested by notice to the
buyer or by some other overt act an intention to rescind. It
is not necessary that such overt act should be communicated
to the buyer, but the giving or failure to give notice to the
buyer of the intention to rescind shall be relevant in any
issue involving the question whether the buyer had been in
default for an unreasonable time before the right of
rescission was asserted.
• The vendor is not bound to deliver the thing sold in case
the vendee should lose the right to make use of the terms
as provided in Article 1198 (Debtor lose every right to
make use of the period) (Art. 1536, CC)
• The vendor is bound to deliver the thing sold and its
accessions and accessories in the condition in which they
were upon the perfection of the contract. (Art. 1537, CC)
• All the fruits shall pertain to the vendee from the day on
which the contract was perfected.
a. No date stipulated for the delivery – From the
perfection of the contract
b. Date stipulated – from the obligation to deliver arise.
• The rules in Article 1189 shall be observed in case of loss
deterioration or improvement of the thing before its
delivery, the vendor being considered the debtor. (Art.
1538, CC)
•
Sale of real estate
1. With statement of its area at the rate of a certain
price for a unit of measure or number
The vendor shall be obliged to deliver to the vendee, if
the latter should demand it, all that may have been
stated in the contract; but, should this be not possible,
the vendee may choose between. (1539)
a. A proportional reduction of the price
b. Rescission of the contract
a. If the lack in area is at least 1/10 than that
stated or stipulated (Applies to area stated in
the contract, not to the true or actual are)
b. If the deficiency in quality specified in the
contract exceeds 1/10 of the price agreed upon.
c. If the vendee would not have bought the
immovable had he known of its smaller area or
inferior quality irrespective of the extent of
the lack in area or quality.
2. Made for a lump sum and not at the rate of a certain
sum for a unit of measure or number or When two
or more immovables as sold for a single price
There shall be no increase or decrease of the price,
although there be a greater or less area or number than
that stated in the contract. (Reason: The parties
ascertained its area and quality before the contract was
perfected)
3. When area or number stated together with
boundaries
The vendor shall be bound to deliver all that is included
within said boundaries, even when it exceeds the area
or number specified in the contract; and, should he not
be able to do so,
a. Reduction in the price, in proportion to what is
lacking in the area or number,
b. Contract is rescinded because the vendee does not
accede to the failure to deliver what has been
stipulated. (1542)
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EXCEL PROFESSIONAL SERVICES, INC. ATTY. ONG – OCT 2020

Nota bene: The actions for recission or reduction in price
shall prescribe in six months, counted from the day of
delivery
• If there is a greater area or number in the immovable than
that stated in the contract, the vendee may accept the area
included in the contract and reject the rest. If he accepts the
whole area, he must pay for the same at the contract rate.
(1540)
• Requisites of Double Sales
a. The two (or more) sales transactions must constitute
d. Sale of mangoes which will be harvested at some future
time from a particular orchard.
6. Statement 1: S sold to B a car for P600,000 consisting of
cash in the amount of P200,000 and a diamond ring, valued
at P400,000. The contract between S and B is one of barter.
Statement 2: D conveyed to C the ownership of his car
valued at P600,000 where the consideration is P300,000 in
cash and a diamond ring worth P300,000. The transaction
between D and C is a sale
a. Both statements are true.
b. Both statements are false.

G
valid sales. c. Statement 1 is true, but statement 2 is false.
b. The two (or more) sales transactions must pertain to d. Statement 1 is false, but statement 2 is true.

N
exactly the same subject matter. 7. Which of these is an unaccepted unilateral promise to buy
c. The two (or more) buyers at odds over the rightful or sell?

20 S O
ownership of the subject matter must each represent a. Option c. Earnest money
conflicting interests. b. Option money d. All of the above
d. The two (or more) buyers at odds over the rightful 8. Which of these is proof of the perfection of a contract of

R LE .H.
ownership of the subject matter must each have bought sale?
from the very same seller. a. Option c. Earnest money
b. Option money d. None of the above
• Rules of preference in case of double sale (1544) 9. S and B agreed on the sale of a diamond ring where the
BE S A fixing of the price was entrusted to a third person. T is
1. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the unable or unwilling to fix the price. The status of the
person who may have first taken possession thereof in contract between S and B is –
N
a. Still valid d. Unenforceable

20
good faith, if it should be movable property.
2. Should it be immovable property, the ownership shall b. Rescissible e. Inefficacious or void
TO ON O

c. Voidable
A
belong to the person acquiring it who in good faith first
recorded it in the Registry of Property. 10. S and B agreed on the sale of car where B alone shall
S

3. Should there be no inscription, the ownership shall designate the price. In which of the following cases will the
pertain to the person who in good faith was first in the contract be valid?
O W N

possession; and in the absence thereof, to the person a. B fixed the price of the car at P600,000 which is more
who presents the oldest title, provided there is good than reasonable.
LA OH

faith. (Art 1544, CC) b. B fixed the price at P600,000 and communicated it to S.
c. B fixed the price of the car at P600,000 and
Multiple Choice communicated it to S who agreed.
1. This characteristic does not apply to a contract of sale d. None of the above.
11. There is perfection of the contract of sale –
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a. Nominate d. Commutative
b. Innominate e. Bilateral a. When the buyer pays the price of the sale.
c. Principal b. When the seller delivers the thing sold to the buyer.
c. When the contract of sale is reduced into writing.
TY

2. That in a contract of sale "one gives the equivalent of what

he received" is theoretically a description of the contract as d. When the seller and the buyer arrive at a meeting of the
- mind upon the thing and upon the price.
C

a. Nominate d. Commutative 12. This mode of delivery consists in pointing at the thing sold
AT

b. Innominate e. Onerous which will have the effect of transferring ownership from
c. Principal the seller to the buyer.
3. Which of these is not a requisite of the object in a contract a. Traditio symbolica
of sale? b. Traditio longa manu
a. That the object be determinate. c. Traditio brevi manu
b. That the object be licit or lawful. d. Constitutum possessorium
c. That the seller must already be the owner of the object 13. This mode of delivery occurs when the seller remains in
at the time of the sale. possession of the thing sold, this time no longer as owner
d. That the object should not be beyond the commerce of but as lessee or otherwise.
man. a. Traditio symbolica
4. This kind of sale is perpected by the falling of the hammer b. Traditio longa manu
or gavel – c. Traditio brevi manu
a. Auction sale c. Sale on approval d. Constitutum possessorium
b. Sale or return d. Lease/purchase 14. S sold to B a residential lot said to be containing an area of
5. Which of these is an example of emptio spei? 1,000 sq. meters at P10,000 per sq. meter. In this
a. Sale of a lottery ticket. connection, which of these is a correct statement?
b. Sale of vine which be produced from a particular a. If the lot should contain 1,500 sq. meters, B can reject
vineyard. the excess of 500 sq. meters, but if he accepts, B should
c. Sale of sugar which will be produced from the pay for the excess at the contract rate of P10,000 per sq.
sugarcane of a particular field. meter.

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EXCEL PROFESSIONAL SERVICES, INC.
b. If the lot should contain 950 sq. meters only, B can only
ask for a proportionate reduction of the price but not
rescission.
c. If the lot should contain 900 sq. meters, B can choose
between proportionate reduction of the price or
rescission of the sale.
d. All of the above.
15. When goods are delivered to the buyer on “sale or return”
for a period of seven days, ownership of the goods passes to
the buyer: (Phil CPA, 98-1)
a. Upon delivery of the goods
G
b. Upon expiration of seven days
c. Upon acceptance by the buyer of the offer of the seller
d. Upon perfection of the contract
N
16. Within what time should be the action for a proportionate
reduction of the price or rescission be filed if the object is
20 S O
immovable property?
a. Within forty (40) days from delivery.
b. Within six (6) months from delivery.
R LE .H.
c. Within one (1) year from delivery.
d. Within four (4) years from delivery.
17. In a sale of personal property on the installment basis,
should the buyer fail to pay one installment, the unpaid
BE S A
seller has this remedy or remedies –
a. To exact fulfillment only
N
b. To cancel the sale only
20
c. To foreclose the chattel mortgage only
TO ON O
d. To choose from exacting fulfillment cancellation of the
A
sale or foreclosure of the chattel mortgage, if any has
been constituted
S
18. In a sale of personal property on the installment basis,
should the buyer fail to pay two or more installment then
O W N
the unpaid seller has this remedy or remedies –
a. To exact fulfillment only
LA OH
b. To cancel the sale
c. To foreclose the chattel mortgage only
d. To choose from among fulfillment or cancellation of
the sale or the foreclosure of the chattel mortgage.
.J
19. In the event the unpaid seller chooses the cancellation of the
sale –
a. Only the buyer shall return the thing sold.
TY
b. Only the seller shall return the price of the sale.
c. The buyer shall return the thing sold and the seller shall
return the price paid.
C
d. The buyer shall return the thing sold and the seller shall
AT
not return the price paid if there is an agreement to that
effect provided it shall not turn out to be
unconscionable.
e. both (c) and (d).
20. In the same sale of personal property, should the unpaid
seller choose foreclosure of the chattel mortgage as his
remedy, which is true or false?
Statement 1: If the proceeds of the sale of the public
auction are more than the remaining obligation, excess shall
appertain to the buyer.
Statement 2: If the proceeds of the sale are less than the
remain obligation, the deficiency judgment cannot
recovered by the unpaid seller from the buyer and if there is
an agreement to that effect, such agreement is considered
null and void according to the Recto Law.
a. Both statements are true.
b. Both statements are false.
c. Statement 1 is true, but statement 2 is false.
d. Statement 1 is false, but statement 2 is true.
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ATTY. ONG – OCT 2020
21. Statement 1: O is the owner of a book which T stole and
then sold to B. Upon discovery of the book in the
possession of B - O will be considered as having a better
right to the book.
Statement 2: If T sold the book of ABS, a merchant store
and then B bought it from the latter - O will still have the
better right to the book.
a. Both statements are true.
b. Both statements are false.
c. Statement 1 is true, but statement 2 is false.
d. Statement 1 is false, but statement 2 is true.
22. The buyer becomes entitled to the fruits of the thing sold –
a. From the perfection of the contract of sale.
b. From the time the obligation to deliver the thing arises.
c. From the time the buyer demands from the seller the
delivery of the fruits.
d. From the time the buyer files a case in court for the
delivery of the thing and the fruits.
23. In distinguishing Earnest Money from Option Money,
Earnest Money is:
a. Given when there is no contract of sale.
b. Given only when there is a perfected contract of sale.
c. Given to bind the offeror in a unilateral promise to sell
or buy.
d. Given as a separate consideration from the purchase
price.
24. One of the following is not a remedy granted to an unpaid
seller:
a. Right of stoppage of goods in transit
b. Right of lien over the goods
c. Right of resale.
d. Right to demand a security for the payment of the price.
25. Statement 1: Where the unpaid seller has resold the goods
for a higher price than the original one, said unpaid seller
has a right to the excess.
Statement 2: But where the resale price is lower than the
original one, the unpaid seller can recover the deficiency as
damages from the buyer.
a. Both statements are true.
b. Both statements are false.
c. Statement 1 is true, but statement 2 is false.
d. Statement 1 is false, but statement 2 is true.
26. S, a malicious and fraudulent person, sold his house and lot
successively to X, Y and Z, all of whom acted in good faith
and for value. X contented himself with his contract and did
not register the sale nor possess the house and lot; Y
possessed the same but only intermittently which enabled Z
to buy the house and lot in good faith and registered the sale
with the Register of Deeds. Who among X, Y and Z will
have a better right to the house and lot?
a. X as the first buyer in good faith and for value who, has
oldest title.
b. Y because he took possession of the house and lot
although intermittently
c. Z as the buyer who first recorded his transaction with
the Register of Deeds in good faith.
d. X, Y and Z should share the property in equal
proportion after S returns their portion of the price paid.
27. A sold to B a parcel of land for P30,000. The sale is
evidenced by a memorandum of agreement of sale written
in Cebuano dialect. One week later, A sold the same parcel
of land to C for P40,000 which was evidenced by a formal
deed of sale. Upon buying the property, C, who was aware
of the first sale, immediately took possession of the land
and registered the deed of sale in her favor with the Register
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EXCEL PROFESSIONAL SERVICES, INC.
of Deeds. When informed of the second sale, B
subsequently registered an adverse claim to the property.
The parcel of land shall belong to: (Phil CPA, 98-1)
a. B, because she has got an older title
b. C, because the sale was made on a formal deed of sale
c. C, because she is the first to register the deed of sale
d. C, because she is the first to take possession of the land
28. Statement 1: Where the seller delivers to a carrier the
good/s sold for delivery to the buyer, delivery to the carrier
is equivalent to delivery to the buyer in which case
ownership over the goods transfers to the buyer.
Statement 2: But where the seller delivers to a carrier the
G
goods sold for purposes of delivery to the buyer except that
he does not send the bill of lading covering the goods to the
N
buyer, ownership thereof does not pass to the buyer.
a. Both statements are true.
20 S O
b. Both statements are false.
c. Statement 1 is true, but statement 2 is false.
d. Statement 1 is false, but statement 2 is true.
R LE .H.
CONDITIONS AND WARRANTIES
• Express warranty – any affirmation of fact or any promise
by the seller relating to the thing if the natural tendency of
BE S A
such affirmation or promise is to induce the buyer to
purchase the same and if the buyer purchased the thing
N
relying thereon.
20
• Implied warranties in a contract of sale
TO ON O
1. implied warranty against eviction
A
2. implied warranty against hidden defects or unknown
encumbrances.
S
3. Implied warranty as to fitness or merchantability
When implied warranty not applicable
O W N
1. As is and where is sale
2. Sale of second hand articles
LA OH
3. Sale by virtue of authority in fact or law.
• Warranty in case of eviction – an implied warranty in
contracts of sale, by virtue of which the vendee is deprived
.J
of the whole or part of the thing purchased by a final
judgment based on the right prior to the sale or an act
imputable to the vendor, such vendor shall answer for the
TY
eviction even though nothing has been said in the contract
on the subject (Art. 1548, CC)
C
• Requisites of warranty against eviction
AT
1. There is a final judgment; (1557)
2. Purchaser has been deprived in whole or in part of the
thing sold;
3. Deprivation was by virtue of a right prior to the sale
effected by the seller; and
4. Vendor has been previously notified of the complaint
for eviction at the instance of the purchaser. (1558)
• Waiver by the buyer (Warranty against eviction)
1. Waiver consciente
a. Without knowledge of risk of eviction.
b. To pay the value which the thing sold had at the
time of the eviction
2. Waiver intencionada
a. With knowledge of risk of eviction and assumed
consequences
b. Vendor not liable
• The Seller must pay in case of eviction: (VICED)
1. Value of the thing at the time of eviction
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ATTY. ONG – OCT 2020
2. Income or fruits, if he has ordered to deliver them to
the winning party
3. Costs of the suit which caused evivtion
4. Expenses of the contract, if the vendee has paid them
5. Damages and interest (on cost, expense and damages),
if seller was in bad faith
Sale of immovable with non-apparent burden or servitude
(1560)
1. If the non-apparent burden or servitude is recorded in the
registry of property
a. The buyer has no remedy except if there is express
warranty that the thing is free from all burden and
encumbrances.
2. If the non-apparent burden or servitude is not recorded in
the registry of property
a. Rescission of the contract – within one year from the
execution of the deed
b. Damages - within one year from the execution of the
deed or one year having elapsed, within one year from
the date on which he discovered the burden or
servitude
Warranty against hidden defects or encumbrances
1. Implied warranty against hidden fault or defects
a. If Visible – Not liable; If Not visible – Liable except if
the vendee is an expert who by reason of his trade or
profession should have known them.(1561)
b. Vendor is responsible to the vendee for any hidden
faults or defects in the thing sold, even though he was
not aware thereof. (1566)
2. Implied warranty or condition
a. Merchantable Quality (Fit for the general purpose)
b. Fitness of the goods - buyer, expressly or by
implication, makes known to the seller the particular
purpose for which the goods are acquired, and it
appears that the buyer relies on the seller's skill or
judgment (whether he be the grower or manufacturer or
not), there is an implied warranty that the goods shall
be reasonably fit for such purpose.
o Contract of sale of a specified article under its
patent or other trade name, there is no warranty
as to its fitness for any particular purpose,
unless there is a stipulation to the contrary.
(1563)
o An implied warranty or condition as to the
quality or fitness for a particular purpose may
be annexed by the usage of trade. (1564)
Remedy in case of hidden defects
a. Accion redhibitoria (Withdrawal or rescission) + damages
b. Accion quanti minors o estimatoria (Proportionate
reduction in the price) + Damages
c. Action prescribed after 6 months from the delivery of
the thing sold (1571) The buyer must sue within 6 months
not mere notification to the seller of the hidden defect.
Loss of the thing with hidden defect
a. Loss due to the hidden fault
1. Vendor was aware – Return the price + refund the
expenses of the contract + DAMAGES
2. Vendor was not aware – Return the price + Interest +
reimburse the expense of the contract
b. Loss due to fortuitous event or fault of the vendee
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EXCEL PROFESSIONAL SERVICES, INC.
1. Price paid – value of the thing at loss; if acted in bad
faith liable for DAMAGES
Sale of animal
a. If two or more animals are sold together, the defect in
one should not affect the sale of the others whether the price
was for lumpsum or separate for each animal except in
case of team, yoke, pair or set is bought. (1572)
b. There is no warranty against hidden defects of animals sold
at fairs or at public auctions, or of live stock sold as
condemned. (1574)
G
c. The sale of animals suffering from contagious diseases shall
be void. A contract of sale of animals shall also be void if
N
the use or service for which they are acquired has been
stated in the contract, and they are found to be unfit
20 S O
therefor. (1575)
d. The redhibitory action, based on the faults or defects of
animals, must be brought within forty days from the date
R LE .H.
of their delivery to the vendee. This action can only be
exercised with respect to faults and defects which are
determined by law or by local customs. (1577)
e. If the animal should die within three days after its
BE S A
purchase, the vendor shall be liable if the disease which
cause the death existed at the time of the contract. (1578)
f. If the sale be rescinded, the animal shall be returned in the
N
condition in which it was sold and delivered, the vendee
20
being answerable for any injury due to his negligence, and
TO ON O
not arising from the redhibitory fault or defect. (1579)
A
S
OBLIGATIONS OF THE VENDEE
Principal obligations of the vendee (1582)
O W N
a. Accept delivery
b. Pay the price at the time and place stipulated in the
LA OH
contract, if not stipulated at the time and place of the
delivery of the thing sold.
• No delivery by installment except if there is stipulation.
•
.J
Generally, the buyer is entitled to examine the goods
prior to delivery except 1.) when there is stipulation; 2.)
when the goods are delivered C.O.D. unless there is an
TY
agreement or a usage of trade permitting such
examination.
• When there is acceptance of the goods
C
a. Express acceptance
AT
b. When the buyer does an act which only an owner can
do
c. Failure to return after reasonable lapse of time
• The vendee shall owe interest for the period between the
delivery of the thing and the payment of the price, in the
following three cases: (1589)
1. Should it have been so stipulated;
2. Should the thing 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.
• The buyer may suspend the payment of the price (1590)
a. There is a well grounded fear (fundado temor)
b. The fear is because of:
1. A vindicatory action or action to recover
2. A foreclosure of mortgage
Note:
a. The fear must not be the result of any other ground
b. A mere act of trespass is made by one claiming no legal
right whatsoever.
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ATTY. ONG – OCT 2020
• Should the vendor have reasonable grounds to fear the loss
of immovable property sold and its price, he may
immediately sue for the rescission of the sale. (1591)
• Art. 1592. In the sale of immovable property, even though
it may have been stipulated that upon failure to pay the
price at the time agreed upon the rescission of the contract
shall of right take place, the vendee may pay, even after the
expiration of the period, as long as no demand for rescission
of the contract has been made upon him either judicially or
by a notarial act. After the demand, the court may not grant
him a new term. (1592)
• With respect to movable property, the rescission of the sale
shall of right take place in the interest of the vendor, if the
vendee, upon the expiration of the period fixed for the
delivery of the thing, should not have appeared to receive it,
or, having appeared, he should not have tendered the price
at the same time, unless a longer period has been stipulated
for its payment. (1593)
EXTINGUISHMENT OF SALE
• Conventional redemption – that which takes place when
vendor reserves the right to purchase the thing sold with the
obligation to reimburse to the vendee the price of the sale,
expenses of the contract, other legitimate payments made
by reason of the sale, as well as necessary and useful
expenses on the thing sold (Arts. 1601, 1616, CC).
• Instances where CONVENTIONAL REDEMPTION is
PRESUMED to be an EQUITABLE MORTGAGE
1. Price of sale is unusually inadequate;
2. Vendor remains in possession as lessee or otherwise;
3. Another instrument extending period of redemption
or granting a new period is executed;
4. Purchaser retains part of the purchase price;
5. Vendor bound to pay taxes;
6. Real intent is to secure the payment of a debt or
performance of other obligation (Art. 1602, CC); and
7. When there is doubt as to whether the contract is a
contract of sale with right to repurchase or an equitable
mortgage (Art. 1603, CC).
• Legal redemption – the right to be subrogated upon the
same terms and conditions stipulated in the contract 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 (Art. 1619, CC)
a. A co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-owners
or of any of them, are sold to a third person. If the price
of the alienation is grossly excessive, the redemptioner
shall pay only a reasonable one. (1620)
b. Should two or more co-owners desire to exercise the
right of redemption, they may only do so in proportion
to the share they may respectively have in the thing
owned in common.
c. The owners of adjoining lands shall also have the right
of redemption when a piece of rural land, the area of
which does not exceed one hectare, is alienated, unless
the grantee does not own any rural land. (1621)
This right is not applicable to adjacent lands which are
separated by brooks, drains, ravines, roads and other
apparent servitudes for the benefit of other estates.
If two or more adjoining owners desire to exercise the
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EXCEL PROFESSIONAL SERVICES, INC. ATTY. ONG – OCT 2020

right of redemption at the same time, the owner of the
adjoining land of smaller area shall be preferred; and
should both lands have the same area, the one who first
requested the redemption.
d. Whenever a piece of urban land which is so small and
so situated that a major portion thereof cannot be used
for any practical purpose within a reasonable time,
having been bought merely for speculation, is about to
be re-sold, the owner of any adjoining land has a right
of pre-emption at a reasonable price.
If the re-sale has been perfected, the owner of the
b. That the deprivation must be by reason of a final
judgment of the court.
c. That the final judgment of the court must be based on a
right prior to the sale or an act imputable to the vendor.
d. That the vendor must have been summoned to the suit
at the instance of the vendee.
e. That the vendee must have appealed the judgment of
the lower court to a higher court.
5. This is not a part of the damages in case of breach of the
warranty in case of eviction –
a. Return to the price of the thing sold.

G
adjoining land shall have a right of redemption, also at b. Income of fruits which the buyer may have been
a reasonable price. compelled to pay,

N
When two or more owners of adjoining lands wish to c. Cost of the litigation.
exercise the right of pre-emption or redemption, the d. Expenses of the contract and its registration if the buyer

20 S O
owner whose intended use of the land in question paid for them.
appears best justified shall be preferred. (1622) e. None of the above.
e. The right of legal pre-emption or redemption shall not 6. In the following cases, the pacto de retro sale entered into

R LE .H.
be exercised except within thirty days from the notice
in writing by the prospective vendor, or by the vendor,
as the case may be. The deed of sale shall not be
recorded in the Registry of Property, unless
BE S A
accompanied by an affidavit of the vendor that he has
given written notice thereof to all possible
redemptioners. The right of redemption of co-owners
N
excludes that of adjoining owners. (1623)
by the parties will be regarded as an equitable mortgage.
Choose the exception.
a. When the price of the sale is inadequate but not
unusually so.
b. When the vendor remains in possession of the thing
sold.
c. When the purchase retains part of the purchase price.
d. When the vendor binds himself to pay the taxes on the

20
thing sold.
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PRE-EMPTION REDEMPTION e. None of the above.

A
The sale to a third The sale to a third person 7. The parties to a pacto de retro sale can agree on any period
S

person has not yet been has already been perfected of repurchase provided it should not exceed –
perfected a. 2 years d. 8 years
O W N

No rescission because There can be no rescission b. 4 years e. 10 years

no sale as yet exists of the sale c. 6 years
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The action here is Action is directed against 8. S and B agreed on the sale of a house and lot for
directed against the the buyer P5,000,000 where the former can buy it back but did not
prospective seller specifically fix or designate the period of purchase. In this
case the period of repurchase is
a. 2 years d. 8 years
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Multiple Choice
1. The purpose of this action is to ask for a proportionate b. 4 years e. 10 years
reduction of the price – c. 6 years
9. S and B agreed on the sale with a right to repurchase of a
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a. Quanti minoris c. Replevin

b. Redhibitory action d. Accion vindicatoria house and lot within 15 years. In this case
2. Three of the following are the requisites in order that the a. The entire stipulation for a repurchase shall be regarded
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vendee may enforce the vendor's liability in case of as void.

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eviction. Which one is not?
a. There must be a final judgment depriving the vendee of
a part or the whole of the thing sold.
b. The vendee must have appealed from such judgment
rendered against him.
c. The deprivation of the vendee is based on a right prior
to the sale or an act imputable to the vendor.
d. The vendor is notified of the suit at the instance of the
vendee.
3. Redhibitory actions involving defective animals should be
bought within –
a. Forty days from the delivery
b. Six months from the delivery
c. One year from the delivery
d. Four years from the delivery
4. Which of these is not an essential requisite of warranty in
case of eviction?
a. That the buyer must have been deprived of the
possession or ownership of the thing sold.
b. The entire stipulation for a repurchase will be regarded
as valid even for 15 years.
c. S will have a repurchase period of 4 years as if he and
B agreed on a repurchase but did not specify a period.
d. S will have a 10 year repurchase because the 15 year
repurchase is against the law, but the illegal matter is
divisible - valid up to 10 years, illegal only beyond it.
10. In a conventional redemption, the seller a retro is obliged to
pay all these in the repurchase. Choose the exception
a. Pay the value of the thing at the time of the repurchase.
b. Expenses of the contract.
c. Necessary and useful improvements which the buyer
may have made.
d. Other terms and conditions which have been agreed
upon.
11. In which of these cases is there no right of legal
redemption?
a. Where a co-owner of an undivided immovable sells his
interest to a third person.

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EXCEL PROFESSIONAL SERVICES, INC. ATTY. ONG – OCT 2020

b. Where the owner of rural property one hectare or less
sells his property to a third person who owns other rural
land or lands.
c. Where the owner of urban land which is so small and so
situated that it cannot be used for a practical purpose
sells the same to a third person.
d. Where the co-owner of an undivided immovable
property donates his undivided interest to a third
person.
12. Abel, Ben, and Cain are co-owners of an undivided parcel
of land. Ben sold his 1/3 interest to Cain absolutely. Which
18. Where it is stipulated that the repurchase of the property
sold could be made at any time, the repurchase shall be
exercised
a. Within four years from the date of the contract
b. Within ten years from the date of the contract
c. After ten years from the date of the contract
d. None of them
19. M, N, and O are co-owners of a parcel of land pro-indiviso,
M sold his 1/3 share in the land to N in an absolute deed of
sale. Which is correct? (Phil CPA, 97-2)
a. The deed of sale between M and N is void because

G
it was not made in favor of a third party.
is correct?
b. O may exercise his right of redemption on the interest
a. Abel may exercise his right of redemption on the sold by M to N.

N
interest sold by Ben to Cain. c. O may redeem only 1/2 of the interest sold by M to N.
b. Abel cannot exercise his right of redemption because d. O cannot exercise the right of redemption because the

20 S O
the sale was made in favor of a co-owner. sale was made in favor or a co-owner.
c. The sale made by Ben to Cain is void because it was
not made in favor of a stranger.

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d. Able may redeem only 1/4 of the interest sold by Ben to
Cain.
13. On May 15, 2020, S sold to B a specific car which S
acquired from a friend last May 5, 2020. On July 15, 2020,
BE S A
the car was totally destroyed which was traced to a crack in
the engine block. S was not aware of the defect. Is S, the
seller, liable to B?
N
a. No because S was innocent and a seller in good faith.

20
b. No, because S has all the opportunity to examine the
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car before buying it.

A
c. Yes, S is liable to return the price and expenses
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incurred by B
d. Yes, S is liable to return the price, expenses and
O W N

damages actually suffered by B.

14. If conventional redemption is made, which of the following
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will not be return by the seller to the buyer:

a. Price made by the buyer.
b. Expenses in the execution of the sales contract paid by
the buyer.
c. All necessary expenses on the thing sold and to be
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redeemed.
d. Interest on the price paid by the buyer.
15. What mode of extinguishing a contract of sale is effected
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when a person is subrogated upon the same term and

condition stipulated in the contract in the place of one who
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acquires a thing by onerous title?

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a. Compensation c. Novation
b. Conventional redemption d. Legal
redemption
16. Which of the statements is not true?
a. In sale or return ownership is transferred to the buyer
upon delivery
b. Warranty against hidden defects is an accidental
element of a contract of sale
c. In sale the obligation of the buyer is not only the
payment of the price
d. In dacion en pago, an obligation is extinguished while
in a contract of sale, obligation arise.
17. In a true pacto de retro sale, the title and ownership of the
property sold are immediately vested in the vendee a retro
subject only to the resolutory condition of repurchase by the
vendor a retro within the stipulated period. This is known as
a. equitable mortgage.
b. conventional redemption.
c. legal redemption.
d. equity of redemption.

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