LAW ON SALES

DEFINITION: SALE: A contract for the delivery at a

certain price of an article which the
Art. 1458. By the contract of sale of the
vendor in the ordinary course of his
contracting parties obligates himself to transfer
business manufactures or procures for
the ownership and to deliver a determinate thing,
the general market, whether the same is
and the other to pay therefor a price certain in
onn hand at the time or not.
money or its equivalent.
Characteristics of a Contract of Sale:
CONTRACT FOR A PIECE OF WORK: if the
1. Purpose: of the delivery is to transfer of goods are to be manufactured specifically for the
ownership customer and upon his special order, and not for
2. Perfection: as a rule, is by mere the general market.
consent, since there exists a contract of
SIMILIARITIES:
sale the moment the parties “obligate”
themselves; a. There is transfer of ownership
3. Subject Matter: determinate thing. b. Buyer/Customer pays the price
4. Cause: onerous, since the cause or
considration of the parties is the
prestation or promise of the other;
5. Bilateral Contract: since both parties
have their respective obligations
6. Nominate Contract: not only because DISTINCTION:
there is a specific designation of the
contract, but more so becase there are Is as to subject matter, in a contract of sale,
specific rules provided by law to govern the subject is a thing and its delivery, in a
the rights and oligation of the parties, contract for a piece of work, the subject is
after stipulation; service.
7. Commutative: in the sense that there is
Importance of Distinction: for purposes of
equivalence in the prestation of the
applying the Statute of Frauds, only the sale of
parties. Ordinarily, price reflects the
personal property priced P500 or more is
value of the property, since the seller
required to be in writing.
would not normally pay an amount more
than the value of the property.
2. Dacion en Pago
Aleatory: there is also a sale of hope where
there is no equivalence in the value of SIMILIARITIES:
prestations. Since the obligation of the other
party is not certain to arise. E.g, lotto (Art. 1461) In Dacion en pago, there is also a transfer
of ownership of the thing delivered and it is
DISTINGUISED FROM OTHER likewise governed by the law on sales.
TRANSACIIONS:
DISTINCTIONS:
1. Contract for a piece of work
CONTRACT OF SALE DACION EN PAGO
Source/Creates of/an Special form of payment
Obligation which extinguishes an
obligation
No requirement for a pre- There is a need for a pre-
existing obligation existing obligation
3. Barter
Art. 1468. If the consideration of the
contract consists partly in money, and partly
in another thing, the transaction shall be
characterized by the manifest intention of
the parties. If such intention does not clearly
appear, it shall be considered a barter if the
value of the thing given as a part of the
consideration exceeds the amount of the
money or its equivalent; otherwise, it is sale.
4. Contract of Agency to Sell
Art 1466. In constructing a contract
containing provision characteristic of both
the contract of sale and of the contract of
agency to sell, the essential clauses of the
whole instrument shall be considered. (n)
SIMILIARITIES: in both contracts, things
or objects are delivered to the buyer/agent
DISINCTION:
1. In a contract of sale, there is transfer of
ownership. In an agency to sell, the
delivery of objects to the agent for him
to sell, does not transfer ownership to
him.
2. In a contract of sale, aafter delivery, risk
of loss is with the buyer already. In
agency to sell, the risk of loss remains
with the principal-owner and not
transferred to the agent.
KINDS OF SALE AS TO TRANSFER
OWNERSHIP UPON DELIVERY:
1. In Absolute sale, ownership transfers
upon delivery, actual or constructive,
even if no total payment of the price has
been made yet.
2. A Conditional Sale is the kind of
contract of sale where ownership
automatically transfers to the buyer
upon fulfillment of the condition, which
is usually the full payment of the price,
without need of a new agreement or to
execute a new contract.
3. A Contract to Sell is a special kind of
conditional sale where ownership does
not automatically pass upon fulfillment
of the condition. It will only give the
buyer the right to demand the execution
of a deed of sale or to compel the seller
to sell. Ownership transfers only upon
execution ofo the deed of sale or some
other mode of delivery.
ELEMENTS OFA CONTRACT SALE
1. Natural – those which are deemed part
of the contract even if not stupulated or
even if the parties are unaware. Deemed
part of the contract by law. E.g.,
warranties
2. Accidental – present only because the
parties so stipulated. E.G obligation to
pay interest.
3. Essential – required for validity.
ESSENTIAL ELEMENTS OF A CONTRACT
OF SALE
1. Consent of the contracting parties, i.e.,
the buyer and the seller.
Incapacity: consent may have been given, but
the one giving it is incapacitated
a. Absolute Incapacity – the party cannot
give consent to any and all contract,
which may result in the contract being
voidable or void.
Minors and those without capacity to
act: may enter a valid contract of sale of
“necessaries” as provided under Art
1489. Necessaries art those which are
 indispensable for sustenance, dwelling, officers and employees
clothing, and medical attendance. connected with the
administration of justice, the
b. Relative Incapacity – the party is property and rights in litigation
prohibited from entering some specific or levied upon an execution
transactions with some persons and before the court within whose
sometimes over specific things. jurisdiction or territory they
exercise their respective
Examples of Relative Incapacity:
functions; this probihibition
a. Husband and Wife cannot sell property includes the act of acquiring by
to each other, EXCEPT: assignment and shall apply to
i. When a seperation of property lawyers, with respect to the
was agreed upon in the marriage property and rights which may
settlementss; or be the object of any litigation in
ii. When there has been judicial which they may take part by
seperation or property virtue of their profession.
vi. Any others specially
disqualified by law
b. The following persons cannot acquire by
Example: Aliens are prohibited by the
purchase, even at a public or judicial
Constitution from acquiring lands in the
auction, either in person or through the
Philippines, except by succession or in case of a
mediation of another:
former natural born Filipino citizen who has lost
i. The guardian, the property of
his citizenship
the person or persons who may
be under his guardianship.
ii. Agents, the property whose
administration or sale may have 2. Cause – as to each contracting party is th
been entrusted to them, unless eprestation or promise to be performed
the consent of the principal has by the other party. For the buyer, it is the
been given; delivery of the object, while for the
iii. Executors and administrators, seller, it is the payment of the price.
the property of the estate under
Rules as to PRICE:
administrationl
iv. Public officers and employees, a. It must be certain.
the property of the State or of i. With reference to another thing
any subdivision thereof, or of certain, or
any government owned or ii. The determination thereof be
controlled corporation, or left to the judgment of a special
institution, the administration of person or persons.
which has been intrusted to 1) Should such person or
them; this provision shall apply persons be unable or
to judges and government unwilling to fix it, the
experts who, in any manner contract shall be
whatsoever, take part in the sale. inefficacious, unless the
v. Justices, judges, prosecuting parties subsequently agree
attorneys, clerks of superior and upon the price.
inferior courts, and other
 2) If the third person or
persons acted in bad faaith
or by mistake, the courts
may fix the price.
3) Where such third person or
persons are prevented form
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.
b. Gross inadequancy of price does not
affect a contract of sale, except as it may
indicate a defect in the consent, or that
the parties really inteded a donation or
some other act or contract.
c. The prices of securities, grain, liquids,
and other things shall also be considered
certain, when the price fixed is that
which the thing sold would have:
i. On the definite day, or
ii. In particular exchange or
market, or
iii. When the amount is fixed above
or below the price on such day,
or in such exchange or market.
Provided said amount be certain
iv. The fixing price of the price can
never be left to the discretion of
one of the contracting parties.
However, if the price fixed by
on of the parties is accepted by
the other, the sale is perfected.
Where the price cannot be deterrmined in
accordance with the preceding rules, or in any
other manner, the contract is inefficacious.
However, if the thing or any part thereof has
been delivered to and appropriated by the
buyer, he must pay a reasonable price therefor.
That is a reasonable price is a question of fact
dependent on the circumstances of each
particular case.
3. Object – is the subject matter which
may be things or rights.
Service: unlike in contracts, in general, where
”service” may be the object of the contract, in
sales, service cannot be a valid subject since the
purose of a contract of sale is to transfer
ownership and no person acquires ownership
over service. It may, however, be another
contract suach as a lease or agency.
Rules as to Objects of Contracts of Sale:
a. It must be licit or wihtin the commerce
of men.
b. The vendor must have a right to transfer
the ownership thereof at the time it is
delivered.
c. It must be determinate. A thing is
determinate when:
i. It is particularly designated or
ii. Physical segregated from all
other of the same class
The requisite that a thing be determinate
is satisfied if at the time the contract is
entered into, the thing is capable of
being made determinate without the
necessit of a new or futher agreemebt
between the parties.
d. In the case of fungible goods, there may
be a sale of an undivided share of a
specific mass, even though
i. The seller purports to sell and
the buyer to buy a definite
number, weight or measure of
the goods in the mass,
ii. 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 masss
as the number, weight or measure
bought bears to the number, weight or
measure of the mass.
 If the mass contains less then the
number, weight or measure bought, the
buyer becomes the owner of the whole
mass and the seller is bound to make
good the deficiency from goods of the
same kind and quality, unless a contrary
intent appears.
e. It may be either existing goods, owned
or possessed by the seller, or goods to be
manufactured, raised or acquired by the
seller after the perfection ofo the
contract of sale, called “future goods.”
There may be a contract of sale of
goods, whose acquisition by the seller
depends upon a contingency which may
or may not happen.
i. Emptio rei speratae – sale of
future thing; must come into
existence otherwise the sale will
not be effective; e.g. wine, milk,
butter.
ii. Emptio Spei – sale of hope
itself, produces effects even if
the thing hoped does not come
into existence. E.g., lotto ticket
iii. Vain Hope – the sale of vain
hope is void. E.g., lotto ticket
that was already drawn
f. The sole owner of a thing may sell an
undivided interest therein.
g. Things subject to a resolutory condition
may be the object of the contract of sale,
such as one that is the subject to a right
or repurchase.
PERFECT OF A CONTRACT OF SALE
Consensual Contract: Sale, being a consensual
contract, is perfected by mere consent as to the
object of the contract and upon the price.
Transfer of Ownership: however, happens only
after delivery, either actual or constructive, as a
general rule. EXCEPT: if the parties agreed that
ownership will no pass until fullpayment of the
price.
Sale by Auction: is perfected when the
auctioneer announces its perfection by the fall
of the hammer, or in other customary manner.
Before perfection:
1. Any bidder may retract his bid; and
2. The auctioneer may withdraw the goods
form the sale unless the auction has been
announced to be without reserve.
Object of sale by auction; Where the goods are
put up for sale by auction in lots, each lot is the
subject of a separate contract of sale.
Seller’s right to bid:
1. General Rule: The seller has no right ot
bid
2. Requisites for the seller to have the right
ot bid.
a. The right to bid was expressly
reserved;
b. Notice was given to gthe bidders;
AND
c. It is not prohibited by law or
stipulation.
Any sale made contradicting the above
may be treated as fraudulent by the
buyer
Option Agreement and Contract: A
promise to buy and sell a determinate
thing ofr a price certain is reciprocally
demandable.
An accepted unilateral promise to buy or
sell a determinate thing for a price
certain is binding upon the promissor if
the promise is supported by a
consideration distinct from the price,
known as option money.

Rules Appliable:
1. A period agreed upon under an
Option Agreement by the offerer
and the offeree is not binding upon
the offeror unless it is supported by
a consideration distinct from the
price, which we call the option
money.
2. Accordingly, the offerer may
withdraw his offer at any time, even
before the expiration of the peeriod
agreed upon, without being liable
for damages
3. If there is such a separate
consideration, the agreement as to
the period is covered by an Option
CONTRACT. In which case, the
offeror cannot withdraw the offer
without being liable for damages for
breach of the option contract
4. In either case, if there is acceptance
by the offeree which was already
communicated, withdrawal cannot
be validly made since there is
already perfected contract of sale
and there is no “offer” to withdraw
anymore, subject to the Statute of
Frauds as to enforceability.
EARNEST MONEY – forms part of the
purchase price and is proof of perfection of a
contract of sale.
Option Money is a sperate consideration to give
the offeree a definite period within which to
decide whether or not to accept an offer, there is
no perfected contract of sale yet and does not
form part of the purchase price.
SALE OF GOODS BY DESCRIPTION OR
SAMPLE:
the contract may be rescinded if the bulk of the
goods delivered do not correspond with the
description or the sample.
SALE OF GOODS BY DESCRIPTION AND
SAMPLE:
If the contract be by sample as well as
descruption, it is not sufficient that the bulk of
goods correspond with the sample if they do not
also correspond with the description.
The buyer shall have a reasonable opportunity of
comparing the bulk with the description or the
sample.
FORM: no specific form is requierd for the
perfection of a contract of sale.
However, the same is still subject to the Statute
of Frauds for its enforceability, particularly the
following provisions:
1. Those not to be performed within 1
year;
2. Sale of personal property the price not
less than (or at least) P500
3. Sale of real property
As such, the above contracts of sale must be in
writing or in some memorandum, in order to be
enforceable.
INSTALLMENT SALES
RECTO LAW
APPLICATION: the Recto Law allplies to a
contract of sale of personal property the price of
which is payable in installments.
The law, however, does not apply to sales “on
credit” only sales in “installment.”
It likewise applies to 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.
ALTERNATIVE REMEDIES OF THE
SELLER:
 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.
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.
The remedies are alternative. As such, if
the seller/vendor invoked one, he can no
longer invoke any of the two remaining
remedies. Any agreement to the contrary
shall be void.
FORFEITURE OF INSTALLMENTS IN CASE
OF CANCELLATION:
The 2nd option of cancelling thr sale would entail
mutual resitution by the parties.
General Rule: The Seller is allowed to retain a
reasonable amount of the purchase price already
paid as compensation for the use of the thing
(rent), or ALL of the amount paid only of there
is a forfeiture clause which entitles him to the
purchase price already paid at the time of
cancellation.
EXCEPTION: the retention of ALL the
purchase price wold be unconscionable.
FORECLOSURE OF THE CHATTEL
MORTGAGE: the 3rd option entails that the
foreclosed mortgage is the mortgage on the
personal property itself, and in case of
deficienccy of the foreclosure sale proceeds,
the seller is NOT entitled to recover such,
since recovery of the deficiency falls under
option 1.
However, if what is foreclosed is another
security or a mortgage on different property,
the prohibition to collect the deficiency would
not apply, since foreclosure of a mortgage of a
different thing precisely falls under option 1
also.
MACEDA LAW
APPLICATION: the Maceda Law, or the
Realty Installment Buyer Act (RA No. 6552),
applies to a contract of sale of residential realty
on installments, where the buyer is given
protection in case of failure to pay installments
Similar to the Recto Law, the Maceda Law does
not apply to sales “on credit”, only ones in
installment.
RIGHTS OF THE BUYER UNDER THE
MACEDA LAW
1. If installments already paid are less than
two years equivalent
a. Grace Period – pay without interest
witihin 60 days. Note, however, that
this right can only be applied once
every 5 years.
b. The buyer may sell or assign his
interest.
c. Pay the entire balance.
2. After two years’ worth of installment,
the buyer will have the following
additional rights:
a. In addition to the 60-day grace
period, the buyer shall have
additional 1 month grace period
every year of installment
payments after the first 2 years
installments;
b. If the seller will exercise his rights
to rescind contract, he is required to
first give the Cash Surrender
Value to the buyer
Cash Surrender Value:
 Minimum of 50% of all payments
(including downpayment) plus
 5% after five years (55% after 6 years of
payment); and
 5% for every additional year thereafter
upto a maximum of 90% (or 14 years of
installments).
VOID STIPULATIONS: the following void
stipulations:
 1. Stipulation as to interest or damages or
penalty during the grace period
2. Forfeiture clause
3. Automatic cancellation or rescission
upon default of the buyer
RESCISSION REQUIREMENTS: the
rescission will take effect only after 30 days
from complying with both:
1. Notice to be given to the buyer as to the
intention to rescind
2. Payment of the Cash Surrender Value
CONDOMINIUMS
PD No 957 or the THE SUBDIVISION AND
CONDOMINIUM BUYERS’ PROTECTIVE
DECREE covers the sale of condominiums
units, among others
Rules affecting installment purchases of
Condominiums:
1. Non-forfieture of payments: No
Intsallment payment made by a buyer in
a subdivision or condominium project
for the lot or unit he contracted to buy
shall be forfeited in a favor of the owner
of developer when the buyer, after due
notice to the onwer or developer, desists
from furthur payment due to the failure
of the owner or developer to develop the
subdivision or condominium project
according to the approved plans and
within the itme limit for complying with
the same.
Such buyer may, at his option, be
reimbursed the total amount paid
including amortiazation interets but
excluding delinquency interests. With
interest thereon at the legal rate.
(Section 23, PD 957)
2. Failure to pay installments: the rights
of the buyer in the event of this failure
to pay the installments due for reasons
other than the failure of the owner of
developer to develop the project shall be
governed bu RA 6552 (Maceda Law)
OBLIGATIONS OF THE VENDOR
1. To take care of the thing after the
contract has been prefected, prior to
delivery.
Loss of the thing pending delivery:
a. If the object is entirely lost – the
contract shall be without any effect.
b. If the thing is lost in part pnly, the buyer
may choose between:
I. Withdrawing from the contract;
and
II. Demanding the remaining part,
paying its price in proportion to
the total sum agreed upon.
c. The goods without the knowledge of the
seller have perished in part of have
wholly or in a material part so
deteriorated in quality as to be
substantially changed in character, the
buyer may at his option treat the sale:
I. As avoided; or
II. As valid in all of the existing
goods or in so much thereof as
have not deteriorated, and as
binding the buyer to pay the
agreed price for the goods in
which the ownership will pass,
if the sale was divisible.
Risk of Loss:
General Rulse: the thing perishes with the
owner, following the principle of res perit
domino.
EXCEPTIONS:
a. Stipulation
b. Security title – Where the deliver 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;
 c. Delay to the delivery – whoever causes
the delay shall bear the risk of loss
Note: the risk of loss is where it is important
why there are distinctions in the following:
 Contract of Sale vs. Contract of Agency
to Sell
 Sale or Return vs. Sale on
Approval/Trial/Satisfaction
SALE OR RETURN: where the goods are
delivered to the buyer but the buyer has the
option to return the goods instead of paying the
price, the ownership passes to the buyer but he
may revest the ownership in the seller by
returning or tendering the goods within the time
fixed in the contract; or when no time is fixed,
within a reasonable time.
Note that ownership transfers to the buyer upon
delivery. As such, the buyer bears the risk of loss
once the goods are delivered.
SALE ON APPROVAL OR ON TRIAL OR
ON SATISFACTION:
Here, there is delivery of the goods also, but no
transfer of ownership yet. As such, the seller,
being the owner, bears the risk of loss.
The ownership passes to the buyer:
a. When he signifies his approval or
acceptance to the seller or does any
other act adopting the transaction
b. 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.
2. Obligation to pay taxes and incidents
of the sale, unless otherwise agreed
upon;
3. To warrant the thing (see
Warranties);
4. To transfer onwership
Seller need not be the owner for validity of
the contract: the seller need not be the owner
and the sale is still valid if he sold the thing in a
capacity authorizing him to do so such as
liquidator, executor, administrator, sheriff, r a
notary (in case of pledge)
This is different from a pledge or martgage
which requires the pledger or mortgagor to be
the absolute owner of the thing.
SELLER IS NOT THE OWNER:
General Rule: the buyer acquires no better title
to the goods than the seller had
EXCEPTIONS: In all of these exceptions, the
buyer acquires GOOD TITLE to the objec even
if the seller is not the owner.
a. Seller is authorized bu the owner –
such as an agent.
b. Seller had statutory or judicial
authority so sell – such as a guardian,
executor, administrator, or court
sheriff.
c. In cases of estoppel:
I. As to the owner: estoppel in pais
– buy his conduct or
represetation, he led the buyer to
believe that the seller had the
authority to sell.
II. As to the seller: estoppel by
deed – If after the sale, the seller
acquired ownership, such
ownership automatically passes
to the buyer as to the thing
already delivered.
d. Sale of an Apparent Owner:
REQUISITES:
I. There is apparent ownershp
 II. Buyer in good faith and for
value – the buyer had no
knowledge of any defect in the
seller’s title at the time of full
payment (not only at the time of
sale).
III. There must be law from which
apparent ownership may be had,
such as:
1) PD 1529 which provides
that those dealing with
registered land need not
inquire beyond the title, also
known as the mirror
principle, unless the buyer is
required under the law to
exercise the highest degree
of diligience, e.g., banks
and public utility
companies.
2) Factor’s Act (agency) – so
far as third persons are
concerned, they only have
to rely on the power of the
attorney as written, they
need not inquire into
limitations imposed bu the
principal to the agent not
wirtten.
3) Art 1518 – for goods
covered by negotiable
instruments.
e. Purchase from a Merchant Store,
Market or Fair in good faith and for
value: the purpose of this exception is to
facilitate commercial transactions so as
not to degrade the trust in sales made
through the stores.
Right of buyer to reimbursement: One
who has lost any mobable or has been
unlawfully 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 faith at a public scale, the
owner cannot obtain its return with
reimbursing the price paid therefor.
5. To deliver the determinate or specific
thing including the fruits from the
moment the obligation to deliver
arises and the accession san
daccessories thereof.
Delivery is the mode by which
ownership is transferred. It is
accomplished by placing the thing in the
control and posession of the vendee.
MODES OF DELIVERY: THINGS
a. Actual Delivery: The actual and
physical transfer of the thing to the
buyer.
b. Constructive Delivery
I. Traditio Longa Manu:
literally, long-hand delivery,
or by pointing to the thing
sold accomplished by mere
consent of the seller,
ownership transfers to the
buyer, because at the time of
sale, the seller cannot
transfer possession to the
buyer e.g., the thing is
leased by another.
II. Consitutum Posessorium: at
thte time of sale, the seller is
in possession and remains in
posession in another
concept other than an
owner, like that of a lessee,
depositary or borrower. E.g.,
a lessee who buys the thing
leased.
III. Brevi Manu: or short hand
deliver. When the buyer is
in possession of the thing, in
a concept other than that of
an owner, at the time of
 sale, and remains in
possessions after sale, now
as owner. E.g., a lessee who
buys the thing leased.
IV. Symbolic Delivery: where
the seller merely gives the
key to a warehouse where
the goods are located or in a
sale of car, the delivery of
the keys is symbolic
delivery.
V. Execution of the Required
Formailty: by execution of a
public instrument. This
mode of deliver is available
to both sale of rights and
sale of things;
c. Delivery to a common Carrier:
When the parties so agreed that the
seller will deliver to the common
carrier for ultimate deliver to the
buyer. In this case, there is already
upon receipt of the common carrier.
EXCEPT:
I. Ownership is reserved by
the seller – such as if it is
deliverable to the seller or
his agents.
II. The seller reserved
possession – goods are
deliverable to the buyer, but
possession of the bill of
lading is with the seller.
III. A Bill of Exchange is drawn
by the seller against the
buyer and the latter
dishonors the same.
MODE OF DELIVERY: As to rights:
a. By execution of an instrument;
b. Quasi Traditio:
I. When the title of ownership is
placed in the possession of the
vendee (e.g., certificates of
stock for sale of shares of
stock);
II. By the use of the vendee of his
rights with the vendor’s consent.
(e.g., the vendee of shares where
the same has not been
transferred in his name yet, with
the consent of the owner,
through a proxy, he may
exercise his rights as a
stockholder
TIME OF DELIVER:
a. Stipulation of the parties;
b. If no stipulation, wihtin a reasonable
time.
PLACE OF DELIVERY:
a. Stipulation of the parties
b. If no stipulation, by usage of trade
c. If no stipulation nor usage of trade, the
seller’s place of business
d. If none, the seller’s residence.
e. However, in case of contract of sale of
specific goods, which to the knowledge
of the partis when the contract or the
sale was made were in some other place,
then that place is the place of delivery.
SELLER IS NOT BOUND TO
DELIVER:
a. If it is pure obligation and the buyer
does not pay; or
b. If there is a period agreed upon, the
oligation to deliver shall be demandable
at that time. Except, if the buyer loses
the right to make sure to the period
under Art. 1198
QUANTITY TO BE DELIVERED
DELIVERY OF LESS OR MORE OF THE
QUANTITY AGREED UPON THE SALE
OF PERSONAL PROPERTY:
1. Delivery is less than quantity agreed
upon, the buyer may:
a. Reject the delivery; or
b. Accept or retain the goods delivered
and pay:
1). The full contract price if he knew
that the seller is not going to
perform the contract in full; or
2). Pay the fair value of goods
delivered withouh such knowledge
2. Deliver is greater than quantity agreed
upon, the buyer may:
a. Accept the goods in the quantity
agreed upon and eject the rest; or
b. Accept the whole of the goods
delivered and pay for the at the
contract rate
3. Delivery of goods mixed with godds of
differnet description not included I the
contract, the buyer may accept the goods
which are in accordance wihtthe contact
and reject the rest.
4. In no. 2 and 3, if the subject matter is
indivisible, the buyer may reject the
whole of the goods.
DELIVERY OF LESS OR MORE OF THE
QUANTITY AGREED UPON IN SALE OF
REAL ESTATE.
A. AT AT RATE OF CERTAIN PRICE
FOR A UNIT OF MEASURE OR
NUMBER:
1. Delivery is LESS than that agreed
upon, the buyer may:
a. Ask for specific performance
and demand deliver of the
shortage;
b. Ask for the proportionate
reduction of the price (accion
quanti minoris)
c. Rescission, in case:
(1) The area lacking is at least 1/10
of that agreed upon; or
(2) The buyer would not havev
entered contract, had he known
of its smaller area.
The same rules apply if any part of the
immovbvable is not the QUALITY specified in
the contract (except that rescission is an
available remedy in the event that the inferiro
value is MORE THAN 1/10 of the price agreed
upon) even if the area delivered be that agreed
upon.
2. If the delivery is in excess of the
area agreed upon, the buyer may:
a. Accept the area agreed upon and
reject the rest; or
b. Accept the whole and pay at the
contract rate
The above rules likewise appleis to judicial
sales.
B. SALE OF REAL ESTATE FOR A
LUMP SUM PRICE: whatever is the
acual area of the land, the buyer is still
required to pay the price agreed upon
and the seller is bound to deliver the
entire area.
If the actual area is bigger than the agreed upon
area, and the seller should not deliver the whole
area, the buyer may;
a. Reduce the price to be paid, in
proportion to what is lacking in the area
or number; or
b. Rescind the contract for failure of the
vendor to deliver what has been
stipulated.
RIGHTS OF AN UNPAID SELLER
Unpaid Seller: the seller of the goods is demed
to be an unpaid seller when:
1. The whole of the price has not been paid
or tendered;
 2. A bill of exchange or other negotiable
instrument has been received as
conditional payment and the conditio on
which it was received has been broken
by reason of the dishonor of the
instrument, the insolvency of the buyer,
the unpaid seller of goods has the
following rights:
Rights of an Unpaid Seller: not withstanding that
the ownership of the goods may have passed to
the byery, the unpaid seller of goods has the
following rights:
1. Possessory lien – right to retain the
goods or right to withhold delivery of
the goods.
Grounds:
a. Where the goods have been sold without
any stipulation as to credit;
b. Where the goods have been sold on
credit, but the term of credit has been
expired;
c. Where the buyer becomes insolvent
The seller may exercise his right of lien
notwithstanding that he is in possesison of the
goods as agent or bailee for the buyer.
Partial Lien: Where an upaid seller has made
part delivery of the goods, he may exercise his
right of lien on the remainder, unless such part
delivery has been made under such
circumstances as to show an intent to waive the
lien or right of retention.
Loss of possessor lien; happens:
a. When the seller delivers the goods to a
carrier or other bailee fr the purpose of
transmission to the buyer without
reserving the ownership in the goods or
the right ot the possession thereof;
b. When the buyer or his agent lawfully
obtains possession of the goods;
c. By waiver
The unpaid seller of goods, having a lien
thereon,, does not lose his lien by reason only
that he has obtained judgment or decree for the
price of the goods.
Sale of the thing by the buyer to third persons:
a. As a rule, the seller does not lose his
right to possessory lien or right of
stoppage in transitu
b. Exceptions:
I. If the seller assented to the
transfer;
II. If the goods are covered by a
negotiable document of title and
it is sold to a purchaser for value
in good faith to whom such
document has been negotiated.
2. Stoppage in transitu- the right to stop
the goods while in transit.
Requisites:
a. The seller already parted with the
possession of the goods;
b. The goods are already in transit
c. The buyer is insolvent.
Goods are in transit:
a. From the time when they are delivered
to a carrier by land, water, or air, or
other bailee for the purpose of
transmission to the buyer, until the
buyer, or his agent in that behalf, takes
delivery of them from such carrier or
other bailee;
b. If the goods are rejected by the buyer,
and the carrier or other bailee countinues
in possession of them, even if the seller
has refused to receive them back.
Goods are no longer in transit:
a. If the buyer, or his agent in that behalf,
obtains delivery of the goods before
their arrival at the appointed destination;
b. If, after the arrival of the goods at the
appointed destination, the carrier or
other bailee acknowledges to the buyer
or his agent that he holds the goods on
his behalf and continues in possession of
them as bailee for the buyer or his agent;
and it is immaterial that further
destination for the goods may have been
indicated by the buyer;
c. If the carrier or other bailee wrongfully
refuses to deliver the goods to the buyer
or his agent in that behalf
If part deliver of the goods has been made to the
buyer, or his agent in that behalf, the remainder
of the goods may be stopped in transitu, unless
such part delivery has been under such
circumstances as to show an agreement with the
buery to give up possession of the whole of the
goods.
Right of stoppage in transity is exercised:
a. By taking actual possession of the
goods; or
b. By giving notice of his claim to the
carrier or other bailee who is in
possession of the goods, as a
consequence of which:
I. The carrier or balee then must
redeliver the goods to, or
accordin gto the directions of,
the seller.
II. The expenses of such delivery
must be borne by the seller.
III. If, however, a negotiable
document of title representing
the goods has been issued by the
carrier or other bailee, he shall
not be obliged to deliver or
justified in not delivering the
goods to the seller unless such
document is furst surrendred for
cancellation.
3. Resale
Grounds:
a. The goods are perishable in nature
b. The seller expressly reserves the right of
resale in case the buyer should make
default, or
c. Where the buyer has been in default in
payment of the price for an unreasonable
time
To exercise such right: the unpaid seller must
have right of lien or stoppage in transitu.
In case the resale proceeds are:
 LESS than the pricein th eoriginal sale,
the seller can recover from the original
buyer the difference as damages
occassioned by the breach of contract of
sale;
 MORE than the price in the original
sale, the seller is entitled to the profit
made in such resale.
Good Title: the buyer in the resale accquires a
good title as against the original buyer.
Notice: except in case of resale made because
the goods are perishable, notice shall be given to
the original buyer about:
a. The intention to resell – which is
revelant to prove that the buyer has been
in default for an unreasonable length of
time.
b. The date, time and place of resale – to
be considered doing the resale in good
faith and entitle the seller to any
deficiency.
Note, however, that failure to give notice does
not affect the validity of the resale. Participation
of the seller in the resale: is prohibited from
being the buyer in the resale, either directly or
indirectly whether the resale be public or private.
4. Rescission
Grounds:
a. When the right to rescind is expressly
reserved by the seller;
b. When the buyer has been in default in
the payment of th eprice for an
unreasonable time
To exercise such right: the unpaid seller must
have a right of lien or stoppage in transitu.
Recovery of damages: the seller is not liable to
the buyer upon the sale of contract, but may
recover from the buyr damages for a any loss
occasioned by the breach of contract.
Notice: is not necessary for the validity of
rescission. But the same shall be relevant in
determining whether the buyer has been in
default for an unreasonable length of time.
Mutually Exclusive Rights: the right of
possessory lien and stoppage in transitu are
mutually exclusive in the sense that both rights
cannot exist together at the same time. This is
because the right of possessory lien presupposes
that the seller retains possession, while in
stoppage in transitu, the seller should have
parted with the possession already.
Note, however, that for the right of resale and
right to rescind, it is necessary that the seller has
either possessory lien or the right to stoppage in
transitu.
Insolvency of the buyer: is a requisite only for
the right of stoppage in transitu, but not in all
other rights. It is, however, a ground to exercise
possessory lien, but still, not a requisite.
RULES ON DOUBLE SALE
MOVABLE PROPERTY: if the sme movable
is sold by the vendor to two or more vendees,
the one who has a bette right over the thing shall
be the first one to take possession in good faith.
IMMOVABLE PROPERTY: if the same
immovable properoty is sold by the vendor to
two or more vendees, the on who has a better
right over the thing shall be:
1. The one to first register in good faith; if
none
2. The one to first take possession in good
faith; if none still,
3. The one with the oldest title
“Good Faith” pertains to the time of
registration or possession not the time of
perfection of sale: such as, if at the time of
second sale, the buyer had no knowledge of the
prior sale, but learns of it prior to registration or
possession (if there is no registrant), he will
NOT be considered a registrant/possessor in
good faith.
BOTH SALES MUST BE VALID: In order for
the Rules on Double Sale to apply, it
presupposes that both the sale are balid or atleast
boidable or rescissible, prior to annulment or
rescission.
CONDITIONS AND WARRANTIES
CONDITIONS: Where the obligation of either
party to a contract of sale is subject to any
condition which is not performed, such party
may:
1. Refuse to proceed with the contract; or
2. Waive the performance of gthe
condition; or
3. Treat the non-perofmance as a breach of
warranty and ask for damages
WARRANTIES: Any affirmation of fact or any
promise by the seller relating to the thing is an
express warranty unless the seller are not
considered warranties unless they are made by
experts and the buyer relies upon them
Warranties under the Consumer Acts (RA No.
7394)
Applicability: Consumer products are goods
which are primarily for personal, family,
household or agricultural purposes which shall
include but not limited to goods, drugs,
cosmetics and devices;
Requirements: any seller or manufacturer who
gives an express warranty for consumer products
is required to do the following:
1. Set the terms or warranty in clear and
readily understandable language and
clearly identify himself as the warrantor;
2. Identify the party to whom the warranty
is extended;
3. State the products or parts covered;
4. State what the warrrantor will do in the
event of a defect, malfuntion or failure
to conform to the written warranty and
at whose expense;
5. State what the consumer must do to
avail of the warranty rights;
6. Stipulate the warranty period.
Period of Warranty – It is also mandated that all
written warranties or guarantees issued by a
manufacturer, producer, or importer shall be
operative from the moment of sale. The period
of warranty shall be:
1. The parties may stipulate the period
within which the express warranty shall
be enforceable. If implied warranty on
merchantability accompanies an express
warranty, both will be equal durations;
2. Any other implied warranty shall endure
not less than 60 days nor more than one
year following the sale of new consumer
products
Implied Warranties:;
1. Warranty against eviction- that the
seller has a right to sell the things at
the time when ownershipi is to pass,
and that gthe buyer shall from that
time have and enjoy legal and
peaceful possession of the thing;
Eviction; requisities;
a. The vendee is deprived of the whole or
of a part of the thing purchased;
b. By virtue of a final judgment
c. The vendor is summned in the suit for
eviction at the instance of the vendee.
d. Such judgment is based on;
I. A right prior to the sale or
II. An act imputable to the vendor
Rules Applicable:
a. The warranty applies even if there is no
agreement to such effect;
b. The vendee need not appeal from the
decisiono in order that the vendor may
become liable for eviction.
c. When the adverse possession had been
commenced before the sale but the
presctriptive period is completed after
the transfer, the vendor shall not be
liable for eviction.
d. If the property is sold of non-payment of
taxes due and not made known to the
vendee before the sale, the sale, the
vendor is liable for eviction.
e. The judgment debtor is also responsible
for eviction in judicial sales, unless it is
otherwise decreed in the judgment
f. The defendant vendee shall ask, within
the time fixed in the Rules of Court for
answering the complaint, that the vendor
be made a co-defendant.
Extent of Liability: First, it will depend
whether the seller is in bad faith:
a. If the seller is in bad faith, he shall be
liable for:
I. Value of the thing soldat the
time of eviction;
 II. Income or fruits, if he has been
ordered to deliver them to th
eparty who won the suit against
him;
III. Cost of the suit which caused
the eviction, and, in a proper
case, those of the suit bough
against the vendor for the
warranty;
IV. Expenses of the contract, if the
vendee has paid them;
V. Damages and interests and
ornatmental expenses
b. If the seller is in good faith, the liability
of the vendor shall depend whether there
is a waiver executed by the buyer;
I. If there is no waiver, the seller is
liable for VICE above except
Damages
II. If there is a waiver, the liability
of the vendor shall depend
whether the buyer is aware of
the risk of eviction;
1). Consiente – the buyer is not
aware of the risk, or without
knowledge of the defect in the
title of the seller: seller is still
liable but only for the VALUE
of the thing at the time of
eviction;
2). Intencionada – the buyer was
aware of the risk of eviction or
of the defect in the title of the
seller, the seller is no longer
liable for anything.
Partial loss: should the vendee lose only a part
of the thing sold but the same is of such
importance, in relation to the obligation to return
the thing without other encumbranes that thoes
which it had when he acquired it, instead of
enforcing the vendor’s liability for eviction.
Two or more things sold: the same rules as to
partial loss shall apply:
a. If they have jointly sold for a lumpsum;
or
b. Even if they were sold for a separate
price for each of them if it should appear
that the vendee would not have
purchased one without the other.
2. Wawrranty against hidden defects or
of quality – the thing shall be free from
any hidden faults or defects.
Hidden Defects: it would render the
thing unfit for its untended use; or
diminish it fitness for such use to such
extent that, had the vendee been aware
thereof, he would not have acquired it or
would have given a lower price for it.
Vendor not liable: in case:
a. The defects are patent or those
which may be visible; or
b. Even if not visible, the vendee who
is an expert, by reason of his trade
or profession.
Warranty of Fitness of Goods: there is
an implied warranty that the goods shall
be reasonably fit for such purpose;
a. The buyer, expressly or by
implication, makes known to the
seller the partiular purpose for
which the goods are acquired, and
b. It appears that the buyer relies on
the seller’s skill or judgment
(whether he be the grower or
manufacturer or not).
In the case of 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 stupulation to the contrary.
Warranty of Merchantable Quality:
there is an implied warranty that the
goods shall be of merchantable quality.
a. Where the goods are bought by
description
 b. From a seller who deals in goods of
that description (whether he be the
grower or manufacturer or not),
In case of a contract of sale by sample, if
the seller is a dealer in goods of that
kind, there is an implied warranty that
the goods shall be free from any defect
rendering them unmerchantable which
would not be apparent on reasonable
examination of the sample.
Other rules no warranty againt
hidden defects or of quality:
a. The vendor is responsible to the
vendee for any hidden faults or
defects in the thing sold, even
though eh was not aware thereof,
unless there is contrary stipulation.
b. An implied warranty or condition as
to the quality or fitness for a
particular purpose may be annexed
by the usage of trade.
Remedies of the vendee:
a. Withdraw from the contract plus
damages;
b. Accion quanti minoris or demand a
proportionate reduction of the price plus
damages
Loss of the thing with hidden defect; liability of
the seller:
a. If the cause was the defect itself: the
seller shall be liable for:
I. Price
II. Expenses of the contract
III. Interest (if in good faith)
IV. Damages (if in bad faith)
b. If the cause of the loss is a fortuitous
event or through the fault of the vendee,
the seller shall be liable to refund the
price less the value at the time of loss,
plus damages (if he was aware).
Juridical Sales: the above rules likewise apply to
judicial sales, except the judgment detor shall
not be liable for damages.
Prescriptive period for the remedies: is 6 minths
from delivery
REHIBITORY DEFECTS IN ANIMALS
Redhibitory Defect is the hidden defects on
animals that, even in case a professional
inspection has been made, should be of such
nature tha expert knowledge is not sufficient to
discover it.
But if the veterinarian, through ignorance or bad
faith shall fail to discover or disclose it, he shall
be liable for damages.
Sale of more than 1 animal:
General Rule: the redhibitory defect of one shall
only give rise to its redhibition, and not of the
others;
Except: if the vendee would not have purchased
the sound animals or animals without the
defective one, which is presumed when a team,
yoke pair, or set is bought, even if a separate
price has been fixed for each one of of the
animals composing the same.
No warranty: There is no warranty against
hidden defects of animals sold at fairs or at
oppublic auctions, or of livestock sold as
condemned.
Void of sale of animals:
a. The sale of animals suffering from
contagious diseases shall be void.
b. If the use or service for which they are
acquired has been stated in the contract,
and they are found to be unfit thereof.
Remedies and Prescriptive Period:
Remedies of the vendee in case of sale of
animals with rehibitory defects are similar to
the remedies for breach of warranty against
hidden defects; but he must make use thereof
within the same period which has been fixed for
the exercise of the redhibitory action or 40 days.
Other Rules:
a. If the animals should die within three
days after its purchase, the vendor shall
be liable if the diesease which cause the
death existed at the time of the contract.
b. If the sale is rescinded, the animal shall
be returned in the condition in which it
was sold and delivered, the vendee
being answerable for any injury due to
his negligence, and not arising from the
redhibitory fault or defect.
c. Sale of large cattle is goverened by
special laws
3. Warranty against non-apparent
encumbrances: an encumbrance (or an
easement or servitude) is a burden
imposed uponn an immovable for the
benefit of another immovable belonging
to a different owner. It is non-apparent,
when there are no external indications of
their existence.
The warranty against non-apparent
encumbrances arises when the same is:
a. Not mentioned in the agreement; or
b. Not recorded in the Registry or Property
(now Registry of Deeds)
In which case, the buyer has the following
remedies, within 1 year, counted from:
a. Ask for the recission of the contract –
from execution of the deed;
b. Ask for damages – from discovery.
Not applicable to: the implied warranties are not
applicable to a sheriff, auctioneer, mortgagee,
pledgee or other person professing to sell by
virtue of authority in fact or law, for the sale of a
thing in which a third person has a legal or
equitable interest.
OBLIGATION OF THE VENDEE:
1. To pay the price
a. At the time and place stipulated;
or if none was stipulated, the
payment must be made at the time
and place of the delivery of the
thing sold.
b. The vendee shall be liable for
interest for the period between the
delivery of the thing and the
payment of the price in the
following cases:
I. Should it have been so stipulated
II. Should the thing sold and delivered
produce fruits or income;
III. Should he be in default, from the
time of judicial or extrajudicial
demand for the payment of the
price.
Suspension of payments: if the vendee is
disturbed in the possession or ownership of the
thing acquired, or should suspend the payment
of the price until the vendor has caused the
disturbance or danger to cease, Unless:
I. The seller gives security for the
return of the price in a proper, or
II. The subject matter is immovable
property
III. There is reasonable fear of loss of
the property sold and its price. (Art
1591)
Note, however, that Art. 1191 (on reciprocal
obligations) still applies, where rescission can be
had even without reasonbable fear or loss if the
vendee fails to pay upon delivery.
However still, even though it may have been
stipulated that upon failure to pay the price at the
time agreed upon the 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.
 2. To accept delivery
Delivery by installments: The buyer is not bound
to accept deivery by installments, unless
otherwise agreed upon.
a. If it was agreed that delivery be done in
Installments and payments separately
made, and
b. The buyer neglects or refuses without
just cause to take deliver of or pay for
one or more instalments,
It depends in each case on the terms of the
ocntract and the circumstances of the case,
whether the rbeach of contract is:
a. So material as to justify the injred party
in refusing to proceed futher and suing
for damages for breach of the entire
contract, or
b. Severable, giving rise to a claim for
compensation but not to a right to treat
the whole contract as broken
Deemed Acceptance: the buyer is deemed to
have acceptaed the delivery if:
a. He intimates to the seller that he has
accpeted the thing;
b. He does any act which is inconsistent
with the ownership of the seller;
c. After the lapse of a reasnoable time, he
retains, the goods without intimating to
the seller that he has rejected them.
Buyer’s obligation to notify the seller of
breach of promise or warranty: After delivery
is made, as a general rule, the seller is not
discharged of liability for damages or of
breach of warranty.
EXCEPT:
a. There is an express or implied
agreement to the contrary; or
b. The buyer fails to give notice to the
seller of the breach within a reasonable
time after the buyer knows, or ought to
know of such breach.
Notify the seller in case of refusal: Unless
otherwise agreed, where goods are delivered to
the buyer, and he refuses to accept them, having
the right to do so, he is not bound to return them
to the seller, but it is sufficient if he notifies the
seller that he refuses to accept them
If he voluntarily constitutes himself a depositary
thereof, he shall be liable as such.
Right to examine:
a. Delivered goods not previously
examined: he is not deemed to have
acccpeted them unless and until he has
had a reasonable oppurtunity of
examining them for the purpose of
ascertaining whether they are in
conformity with the contract if there is
no stipulation to the contrary
b. Unless otherwise agreed, the seller is
bound, on request, to affored the buyer
a reasonable opportunity of
examining the goods for the purpose of
ascertaining whether they are in
conformity with the contract
c. Where goods are delivered to a carrier
by the seller, upon the terms that the
goods shall not be delivered by the
cvarrier to the buyer until he has paid
the price, the buyer is not entitiled to
examine the goods before the payment
of the price, in the absence of
agreement or usage of trade permitting
such examination.
Vendor’s Remedy of Recission is an available
remedy to the seller with respect to movable
property, if the vendee upon the expiration of
the period fixed for the delivery of the thing:
a. Should not have appeared to receive it,
or,
b. Having appeared, he should not have
tendered the price at the same time,
unless a longer period has been
stipulated for its payment.
 of the fruits existing at the
time of redemption
EXTINGUISHMENT OF A CONTRACT OF If no idemnity was paid by
SALE the purchaser, there is no
Sales are extinguised by the same causes as all such liability for
reimbursement or pro-rating
other obligations, and by conventional or legal
No fruits Some Exist The fruits shall be prorated
redemption.
between the redemptioner
CONVENTIONAL REDEMPTION (Seller-a-retro) and the
vendee, givving the latter the
CONVENTIONAL REDEMPTION: part corresponding to the
otherwise known as “right of repurchase” shall time he possessed the land in
take place when the vendor reserves the right to the last year, counted from
repurchase the thing sold, with the obligation to the anniversary of the date
return the price, expenses related thereto and of the sale
useful and necessary expenses, and other
stipulations which may have been agreed upon. Equitable Mortgage: a sale with reight of
The sale, with a right or repurchase is also repurchace ( or even a contract of absolute sale)
known as pacto de retro sale. is presumed ot be an equitable mortagage in the
following cases:
Ownership: transfers to the vendee-a-retro upon
delivery. However, this ownership is not 1. When the price of a sale with right to
absolute but only conditional. This is because repurchase is unsually inadequate.
the vendor-a-recto may be able ot exercise the 2. When the vendor remains inpossession
right to repurchase and the ownership of the as lessee or otherewise.
buyer wil be terminated. Thus, it can be said that 3. When upon or after the expiration of
the ownership of trhe vendee-a-retro is subject to the right ot repurchaes another
a resolutory condition. instrument extending the period of
redemption or granting a new period is
Amount to be paid at the time the right is executed;
exercised: 4. When the purchaser retains for himself
a part of the purchase price
1. The purchase price;
5. When the vendor bind himself to pay
2. The expenses of the contract, and any
the taxes on the thing sold
other legitimate payments made by
6. In any other case where it may be fairly
reason of the sale; and
inferred that the real intention of the
3. Useful and necessary expenses (e.g.,
parties is that the transaction shall secure
fencing of the land)
the payment of a debt or the
performacne of any other obligation

Fruits: The remedy would be to ask for the reformation

of the instrument purporting to be a contract of
At the At the time Effect sale with right of repurchase or a contract of
time of of absolute sale.
sale redemption
There are There were If purchaser paid for the In case of doubt, a contract purposint to be a sale
visible or fruits as fruits existing at the time of with right to repurchase shall be construed as an
growing well sale, he shall be entitled to equitable mortgage.
fruits reimbursement or pro-rating
Period to exercise right of repurchase:
1. That which was agreed upon which cannot
exceed 10 years;
2. If no agreement as to the period, it shall be
four years from the date of the contract.
3. The vendor may still exercise the right to
repurchase within thirty days from the time final
judgment was rendered in a civil action on the
basis that the contract was a true sale with right
to repurchase. Other rules on conventional
redemption:
Vendor’s Right of Repurchase:
1. In case of real property, the consolidation of
ownership in the vendee by virtue of the failure
of the vendor to pay the required amounts shall
not be recorded in the Registry of Property
without a judicial order, after the vendor has
been duly heard.
2. The vendor may bring his action against every
possessor whose right is derived from the
vendee, even if in the second contract no
mention should have been made of the right to
repurchase, without prejudice to the provisions
of the Mortgage Law and the Land Registration
Law with respect to third persons.
3. The vendee is subrogated to the vendor's
rights and actions.
4. The creditors of the vendor cannot make use
of the right of redemption against the vendee,
until after they have exhausted the property of
the vendor.
Multiple Parties
1. SALE OF UNDIVIDED IMMOVABLE -
vendee eventually acquires the whole; may
compel the vendor to redeem the whole property.
E.g. A and B are co-owners of a land. A sold his
share to X with a right to repurchase. B
eventually sold his share to X too. X can compel
A to redeem the entire lot.
2. SEVERAL PERSONS JOINTLY AND IN
THE SAME CONTRACT: sell an undivided
immovable with a right of repurchase:
a. SELLERS can only redeem their share
b. BUYER - can compel redemption of the
entire property; cannot be compelled to agree to
a partial redemption
E.g., A and B, co-owners, sold their respective
shares in the same Deed of Sale to X with a right
of repurchase. In this case, A can only redeem
his share, but X cannot be compelled to a partial
redemption; he can require B to also redeem. If
B does not want to, A cannot validly exercise his
right of redemption for his share alone.
3. Same rule applies to CO-HEIRS (A sold his
land to B with a right of repurchase; A1 and A2
are the heirs of A. If A dies, same rule above
applies to A1 and A2 as if they are A and B in
the above illustration.)
If VENDEE has multiple heirs the action for
redemption should be to each for his own share.
4. CO-OWNERS SOLD SEPARATELY
each can exercise his own right of redemption
and cannot be compelled to redeem the whole
property
LEGAL REDEMPTION
LEGAL REDEMPTION: is 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.
The Right of Legal Redemption is available to:
1. Co-owners – 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.
Subject property: may be movable or immovable
property. Multiple persons exercising the right of
redemption/pre-emption: the one whose
Amount to be paid for redemption; is the intended use is best justified shall be preferred.
purchase price, unless the price of alienation is
grossly excessive, in which case, the
redemptioner shall pay only a reasonable one. PERIOD TO EXERCISE LEGAL RIGHT
OF REDEMPTION: 30 days from NOTICE in
Multiple redemptioners: should two or more co- wiriting by the prospective vendor, or by the
owners desire to exercise the right of vendor. The deed of sale shall not be recoreded
redemption, they may only do so in proportion in Registry of Property, unless accompanied by
to the share they may respectively have in the an affidavit of the vendor that he has given
thing owned in common written notice thereof to all possible
redemptioners.
2. Owners of adjoining lands – have the right
of redemption in case of transfers of land. To summarize the differences:
Rural Land; Requisites: SUBJECT AMOUNT MULTIPLE
MATTER TO BE REDEMPTIONER
a.. The subject is rural land;
PAID FOR S
b. The land does not exceed one hectare;
REDEMPTI
c. The redemptioner is an owner of a land
ON
adjoining the subject rural land;
Co- Real or Purchase All, pro-rata
d. The adjacent lands is not separated by brooks,
owners personal price
drains, ravines, roads and other apparent
property
servitudes for the benefit of other estates; and
Unless
e. The grantee/buyer owns a rural land;
grossly
Multiple redemptioners: in case two or more
excessive, in
adjoining owners desire to exercise the right of
which case,
redemption at the same time:
onnly a
a. The owner of the adjoining land of smaller
reasonable
area shall be preferred; and
one
b. Should both lands have the same area, the one
Adjacen Rural land- Purchase 1. Smaller lot
who first requested redemption.
t rural comply with price area
land the above 2. If same
Redemption and Pre-emption of Urban Land;
owners requisites area, first
Requisites:
Adjacen Urban land – Purchase One whose use is
a. The subject is urban land; t urban complying price best justified
b. The area of the land is so small and so situated land with the
that a major portion thereof cannot be used for owners above
any practical purpose within a reasonable time, requisites
having been bought merely for speculation;
c. The one exercising the right of redemption or
pre-emption is an adjoining land owner.

When redemption, when pre-emption:

a. Pre-emption is the right exercised by the
adjoining land owner if the sale is NOT YET
perfected;
b. Redemption is the right exercised if the sale is
already perfected.