Law on Sales

Venditio / Vente / Venta

Roman French Spanish

(1495 - 1544)
Atty. Amado R. Villegas, Jr.
RFBT Reviewer / Professor I – FEU Manila
Ways of Effecting Delivery (1496)

DELIVERY
 Ways of Effecting Delivery (1496)
1. Actual or Real delivery (1497)
2. Constructive or Legal delivery (1498-
1501)
3. Delivery in any other manner signifying
an agreement that the possession is
transferred to the vendee (1496-1499)
 Ways of Effecting Constructive Delivery
a. Execution of public instrument / Legal
Formalities (1498, par. 1)
- both movable and immovable
b. Symbolical or traditio symbolica / clavium (1498, par. 2)
- only to movable
c. Traditio longa manu – (1499)
- only to movable
d. Traditio brevi manu – (1499)
e. Traditio constitutom possessorium (1500)
 Quasi-Traditio Delivery (1501)
What is covered? Incorporeal things

1. By the execution of public instrument

2. When that mode of delivery is not applicable,
by the placing of titles of ownership in the
possession of the vendee
3. By allowing the vendee to use his rights as
new owner with the consent of the vendor
 Nemo Dat Quod Non Habet
GR - Nobody can dispose of what he does not
own / Nobody gives what they don’t have
Exception – PROGMAVA
P – Precluded/Estoppel M – Merchant’s store
R – Registration / Recorded A - Agent
O – Order of the Court V – Voidable title
G – Guardian A – subsequently
Acquired
 Specific Instances
Situation Recovery Reimbursement
Unlawfully YES No
deprived /
Pledge
Public Sale YES YES
Merchant’s store NO Not allowed
 Documents of Title (1507 -1520)
Nature and functions
1. Receipt of goods
2. Evidence of transfer of title / possession of
goods
Most common forms
bill of lading, dock warrant, warehouse receipt,
quedan, letter of credit
 Documents of Title (1507 -1520)
Classes of Documents of Title
(1) Negotiable Documents of Title
e.g. Deliver to B or order
Deliver to B or bearer
(1) Non-Negotiable Documents of Title
Deliver to B

Negotiable Instrument – “Pay” to B or order

 Documents of Title (1507 -1520)
How transferred?
(1) If Negotiable
Negotiation
Order – Indorsement plus delivery
Bearer – mere delivery
(2) If Non-negotiable - Assignment
 Documents of Title (1507 -1520)
1508 – Bearer (negotiated by delivery)
1509 – Order (negotiated by indorsement + delivery)
1510 – Negotiable marked “non-negotiable”
1511 – Non-negotiable (by assignment)
1512 – Persons who may negotiate (Owner / Agent)
1513 – Rights of the person to whom document has
been negotiated (3)
1514 – Rights of the person to whom document has
been transferred (3)
 Documents of Title (1507 -1520)
1515 – Transfer of order document without
indorsement
1516 – Warranties on sale of documents (4)
1517 – Indorser not a guarantor
1518 – Negotiation not impaired by fraud, mistake,
duress, etc.
1519 – Attachment or levy upon goods covered by
negotiable document (unless surrendered / enjoined)
1520 – Creditor’s remedies to reach negotiable
documents (injunction / attachment)
 Place of Delivery (1521)
1. Agreement / Stipulation
2. If none, Usage of trade
3. If none, seller’s place of business
4. If none, seller’s residence
In case of specific goods, in the absence of
agreement or usage of trade to the contrary –
when the contract or the sale was made were in
some place
 Delivery of Goods (1522)
Less than, More than, Mixed
1493 v. 1522
Less than (Reject them or Accept / Retain)
Larger (Accept and reject the rest / If he accepts)
Mixed (Accept and reject the rest / if he accepts)

If indivisible (larger / mixed) – the buyer may reject the

whole of the goods
 Delivery to the carrier is deemed
delivery to the buyer (1523)
Who pays for expenses of delivery?
COD – buyer
CIF – seller
FOB at the place of shipment – buyer
FOB alongside the vessel – buyer
FOB at the place of destination - seller
 Sale is Reciprocal
GR – Delivery is simultaneous with the
payment of the price (Reciprocal)
Exception – not reciprocal
(1) Buyer has not paid the price
(2) If no period for payment has been fixed
(3) If buyer lost the benefit of the period (1536)
- See 1198
 Unpaid Seller (1525-1535)
1525 – Who is the unpaid seller?
1526 – Rights of the unpaid seller
(1) Possessory lien or right to retain
(2) Right of stoppage in transitu
(3) Right of resale
(4) Right to rescind
 Unpaid Seller
Grounds
A. Rt. to Retain (3)
- (1) no stipulation as to credit, (2) term of credit
expired, (3) buyer becomes insolvent
B. Rt. of Stoppage in Transitu (2)
- Buyer (1) is (2) or becomes insolvent
C. Rt. of Resale (3)
- (1) perishable (2) expressly reserves (3) default in
payment of the price
D. Rt. to Rescind (2)
- (1) expressly reserves (2) default in payment
 Unpaid Seller
1533 – Unpaid seller cannot directly or indirecly
buy the goods (VOID)

1534 – Effect of sale of goods subject to lien or

stoppage in transitu
1st par. GR - Seller can exercise
Exception – seller assents
2nd par. Unpaid Seller v. Holder of NDT
 Right of the vendee to the fruits
FRUITS?
1164 – When is the creditor entitled to the fruits?
1187 – In suspensive condition
1786/1788 – When is the partnership entitled to
the fruits?
1537 – When is the buyer entitled to the fruits?
1940 – Is the bailee entitled to the fruits?
2102 – Are the fruits covered in pledge?
2132 – In Antichresis, are the fruits covered?
 Rules in case of loss, deterioration, or
improvement of thing before delivery

1480 v. 1504
(after perfection but before delivery)

Provisions supporting 1480

1537 – When is the creditor entitled to the fruits?
1538 – Rules in case of loss, deterioration or
improvement of thing before delivery
1189 – Law 1
Rules in Case Land / Real Estate is Sold
1539 1542
Sale Per Unit (PUM) Lump Sum Sale
Cuerpo Cierto Sale
3 Remedies GR – NO REMEDY
1. Demand area lacking Exception –
2. Rescission (be not 2single
or more immovables are sold for a
price aside from mentioning
less than 1/10 the boundaries its area or number
3. Proportionate should be designated
1. Reduction in the price
reduction of the price 2. Rescission
Rules in Case Land / Real Estate is Sold
1539 – Not of the quality stated in the contract
(same remedies)
- had the buyer known of its smaller or
inferior quality, he may rescind the sale
1540 – Of greater area or number (accept and reject)
1541 – Rules in 1539 and 1540 applicable to judicial sales
1543 – Prescription (6 months counted from the
date of delivery)
 Double Sale
If MOVABLE / PERSONAL Property
Rule: First taking possession in good faith
Prius tempore potior jure

If IMMOVABLE / REAL Property

1. Registration in good faith
2. Possession in good faith
3. Oldest title in good faith
See: Mirror Doctrine
 THANK
Atty. Amado R. Villegas, Jr.
Professor 1, Far Eastern University
PRTC Reviewer
YOU
Bats CPAR Reviewer
CTDI Reviewer
PRIA Reviewer