ARTICLE 1516 – DELIVERY OF THE THING SOLD
purpose that the buyer has in mind.
A person who for value negotiates or transfers a document of title by
indorsement or delivery, including one who assigns for value a claim
secured by a document of title unless a contrary intention appears,
warrants:
1) That the document is genuine;
2) That he has a legal right to negotiate or transfer it;
3) That he has knowledge of no fact which would impair the
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 a particular purpose,
whenever such warranties would have been implied if the
contract of the parties had been to transfer without a
document of title the goods represented thereby. (n)
• Here on Article 1516, it basically pertains sa mga
responsibilities and assurances involved when we are
transferring a document that represent yung ownership
nung goods.
• Or in other words here on 1516 is parang winawarranty or
ginaguarantee lang na yung document na trinatransfer ng
isang tao na nagnenegotiate sa sale is yung document is
• Genuine or the document is authenthic or original
• Then the person has the legal authority to negotiate
• And it has no impairing facts or the person who is
negotiating have no knowledge or any information na
possible madiminish yung validity or value ng document.
• Then lastly the person should also have the right to transfer
the title and minamakesure din dapat na yung goods is
merchantable in a way na yung goods is have the
acceptable quality and atleast fit yung item sa particular
• And if ever any of these guarantees are not met, it can have
legal implications for example if yung document is forged
pala the person who transfer it will be held liable.
• EXAMPLE:
➢ And also another example for the application of the
provision is for example
➢ Sa business ng shipment of goods and bumili ng mga
goods sa supplier na gumagamit ng document title
like yung bill of lading to represent the shipment.
➢ Here the supplier have the responsibility na
iguarantee yung buyer na yung bill of lading na
document is genuine, and also the supplier should
also guarantee na meron siyang legal right to
negotiate and also icoconfirm din dapat ng supplier
na wala siyang any knowledge or any information that
would make the bill of lading less valid or valuable
and lastly dapat may assurance din yung supplier na
the person negotiating have the right to transfer the
ownership nung goods na nirerepresent ng bill of
lading.
• Based on these warranties, you can proceed with
confidence, knowing that the document and the goods it
represents are legitimate, and that the supplier has the
legal authority to transfer them to you. If, however, there
were any issues later on (such as receiving damaged goods
or discovering that the bill of lading was forged), you would
have legal recourse under Article 1516.
• Another example is, furniture retailer and warehouse
receipt as the guarantee of receipt.