ART. 1460. A thing is determinate when it is particularly 1. By sale owner – Art.
le owner – Art. 1463 covers only the sale by a sole owner By the contract of agency, - a person binds himself to render
designated or physically segregated from all others 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 necessity of a new or further
agreement between the parties. (n)
(1) When thing determinate. — A thing is determinate or specific
(not generic) when it is particularly designated or physically
segregated from all others of the same class.
(2) Sufficient if subject matter capable of being made
determinate. — It is not necessary that the thing sold must be in
sight at the time the contract is entered into.
ART. 1461. Things having a potential existence may be the object
of the contract of sale.
The efficacy of the sale of a mere hope or expectancy is deemed
subject to the condition that the thing will come into existence.
The sale of a vain hope or expectancy is void. (n)
Sale of things having potential existence. - Even a future thing
not existing at the time the contract is entered into may be the
object of sale provided it has a potential or possible existence
Sale of a mere hope or expectancy - The efficacy of the sale of a
mere hope or expectancy is deemed subject to the condition that
the thing contemplated or expected will come into existence
Emptio rei speratae(sale of thing expected) - is the sale of a thing
not yet in existence subject to the condition that the thing will
exist and on failure of the condition, the contract becomes
ineffective and hence, the buyer has no obligation to pay the
price.
emptio spei - is the sale of the hope itself that the thing will come
into existence, where it is agreed that the buyer will pay the price
even if the thing does not eventually exist.
ART. 1462. The goods which form the subject of a contract of
sale 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 of the contract of sale, in this Title
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. (n)
Goods which may be the object of sale.
(1) Existing goods or goods owned or possessed by the seller; or (
2) Future goods or goods to be manufactured (like the sale of milk
bottles to be manufactured with the name of the buyer pressed in
the glass), raised (like the sale of the future harvest of palay from
a ricefield), or acquired (like the sale of a definite parcel of land
the seller expects to buy)
Future goods as object of sale. - A sale of future goods, even
though the contract is in the form of a present sale, is valid only as
an executory contract to be fulfilled by the acquisition and
delivery of the goods specified
ART. 1463. The sole owner of a thing may sell an undivided
interest therein. (n)
of a thing of an individual share or interest thereof..The sole
owner of a thing may sell the entire thing; or only a specific
portion thereof; or an undivided interest therein and such interest
may be designated as an aliquot part of the whole
2. By co-owner – The co-owner of a thing, being the owner of his
undivided interest therein, can dispose of his share even without
the consent of the co-owner/s.
Sale of undivided interest in a thing.
The sole owner of a thing may sell the entire thing; or only a
specific portion thereof; or an undivided interest therein and such
interest may be designated as an aliquot part of the whole
ART. 1464. 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 number, weight or measure bought bears to
the number, weight or measure of the mass. If the mass contains
less than 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. (n)
(1) Meaning of fungible goods. — It means goods of which any
unit is, from its nature or by mercantile usage, treated as the
equivalent of any other unit (Uniform Sales Act, Sec. 76.), such as
grain, oil, wine, gasoline, etc.
(2) Effect of sale. — The owner of a mass of goods may sell only
an undivided share thereof, provided the mass is specific or
capable of being made determinate. (Art. 1460.)
(3) Risk of loss. — If the buyer becomes a co-owner, with the
seller, or other owners of the remainder of the mass, it follows
that the whole mass is at the risk of all the parties interested in it,
in proportion to their various holdings.
(4) Subject matter. — Take note that in the sale of an undivided
share, either of a thing (Art. 1463.) or of that of mass of goods
(Art. 1464.), the subject matter is an incorporeal right. (Art. 1501.)
Here, ownership passes to the buyer by the intention of the
parties
(5) Applicability of Article 1464 to non-fungible goods. —
Although Article 1464 speaks of “fungible goods,” nevertheless it
may also apply to goods not strictly fungible in nature
ART. 1465. Things subject to a resolutory condition may be the
object of the contract of sale. (n)
Sale of thing subject to a resolutory condition. - A resolutory
condition- is an uncertain event upon the happening of which the
obligation (or right) subject to it is extinguished. Hence, the right
acquired in virtue of the obligation is also extinguished.
ART. 1466. In construing a contract containing provisions
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)
Sale distinguished from agency to sell.
some service or to do something in representation or on behalf of
another, with the consent or authority of the latter.
ART. 1467. A contract for the delivery at a certain price of an
article which the vendor in the ordinary course of his business
manufactures or procures for the general market, whether 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 customer and
upon his special order, and not for the general market, it is a
contract for a piece of work. (n)
Sale distinguished from contract for a piece of work.
By the contract for a piece of work - the contractor binds himself
to execute a piece of work for the employer, in consideration of a
certain price or compensation. The contractor may either employ
his labor or skill, or also furnish the material.
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 a sale.
Sale distinguished from barter.
By the contract of barter or exchange, one of the parties binds
himself to give one thing in consideration of the other’s promise
to give another thing. (Art. 1638.) On the other hand, in a contract
of sale, the vendor gives a thing in consideration for a price in
money.
Sale distinguished from lease.
In the lease of things, one of the parties binds himself to give to
another the enjoyment or use of a thing for a price certain and for
a period which may be definite or indefinite
Sale distinguished from dation in payment.
Dation in payment (or dacion en pago)- is the alienation of
property to the creditor in satisfaction of a debt in money. (see
Art. 1619.) It is governed by the law on sales.
The distinctions are the following:
(1) In sale, there is no preexisting credit, while in dation in
payment, there is;
(2) In sale, obligations are created, while in dation in payment,
obligations are extinguished;
(3) In sale, the cause is the price paid, from the viewpoint of the
seller, or the thing sold, from the viewpoint of the buyer, while in
dation in payment, the extinguishment of the debt, from the
viewpoint of the debtor, or the object acquired in lieu of the
credit, from the viewpoint of the creditor;11
(4) In sale, there is more freedom in fixing the price than in dation
in payment; and
(5) In sale, the buyer has still to pay the price, while in dation in
payment, the payment is received by the debtor before the
contract is perfected.
ART. 1469. In order that the price may be considered certain, it
shall be sufficient that it be so with reference to another thing
certain, or that the determination thereof be left to the
judgment of a specified person or persons. 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. If the third person or persons acted in bad faith or by
mistake, the courts may fix the price. 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. (1447a)
When price considered certain.
- The price in a contract of sale ought to be settled for
there can be no sale without a price
- It must be certain or capable of being ascertained in
money or its equivalent; and money is to be
understood as currency, and its equivalent means
promissory notes, checks and other mercantile
instruments generally accepted as representing
money.
1. No sale if price not certain or ascertainable – the price in a
contract of a sale out to be settled for there can be no sale
without a price.
2. Cases when price considered certain.
ART. 1470. Gross inadequacy of price does not affect a contract
of sale, except as it may indicate a defect in the consent, or that
the parties really intended a donation or some other act or
contract.
ART. 1471. If the price is simulated, the sale is void, but the act
may be shown to have been in reality a donation, or some other
act or contract.
ART. 1472. 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 in such exchange or
market, provided said amount be certain. (1448)
ART. 1473. The fixing of the price can never be left to the
discretion of one of the contracting parties. However, if the price
fixed by one of the parties is accepted by the other, the sale is
perfected. (1449a)
ART. 1474. Where the price cannot be determined in accordance
with the preceding articles, 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. What is a reasonable price is a
question of fact dependent on the circumstances of each
particular case. (n)
Effect of failure to determine price.
(1) Where contract executory. — If the price cannot be
determined in accordance with Articles 1469 and 1472, or in any
other manner, and the bargain is still executory, the contract is
without effect.
(2) Where delivery has been made. — If the thing or any part
thereof has already been delivered and appropriated by the
buyer, the latter must pay a reasonable price therefor
ART. 1475. The contract of sale is perfected at the moment there
is a meeting of minds upon the thing which is the object of the
contract and upon the price. From that moment, the parties may
reciprocally demand performance, subject to the provisions of
the law governing the form of contracts. (1450a)
Stages of a contract of sale
1. Negotiation – covering the period from the time the
prospective contracting parties indicate interest in the contract to
the time the contract is perfected
2.Pefection – which takes place upon the concurrence of the
essential elements of the salewhich are the meeting of the minds
of the parties
3. Consummation – which begins when the parties perform their
respective undertaking under the contract of sale, culminating in
the extinguished thereof
ART. 1476. In the case of a sale by auction: (1) Where goods are
put up for sale by auction in lots, each lot is the subject of a
separate contract of sale
(2) 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.
(3) A right to bid may be reserved expressly by or on behalf of
the seller, unless otherwise provided by law or by stipulation.
(4) 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. (n) Rules governing auction
sales.
(1) Sales of separate lots by auction are separate sales. — Where
separate lots are the subject of separate biddings and are
separately knocked down, there is a separate contract in regard to
each lot.
(2) Sale perfected by the fall of the hammer. — In putting up the
goods for sale, the seller is merely making an invitation to those
present to make offers which they do by making bids (Art. 1326.),
one of which is ultimately accepted
(3) Right of seller to bid in the auction. — The seller or his agent
may bid in an auction sale provided: (a) such right was reserved;
(b) notice was given that the sale is subject to a right to bid on
behalf of the seller; and (c) the right to bid by the seller is not
prohibited by law or by stipulation
ART. 1477. The ownership of the thing sold shall be transferred
to the vendee upon the actual or constructive delivery thereof.
(n)
ART. 1478. The parties may stipulate that ownership in the thing
shall not pass to the purchaser until he has fully paid the price.
(n)
Ownership of thing transferred by delivery.
The delivery of the thing sold is essential in a contract of sale.
Without it, the purchaser may not enjoy the thing sold to him
ART. 1479. A promise to buy and sell a determinate thing for a
price certain is reciprocally demandable. An accepted unilateral
promise to buy or to 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. (1451a)
Kinds of promise treated in Article 1479.
The above article refers to three kinds of promises, namely:
(1) An accepted unilateral promise to sell in which the promisee
(acceptor) elects to buy;
(2) An accepted unilateral promise to buy in which the promisee
(acceptor) elects to sell; and
(3) A bilateral promise to buy and sell reciprocally accepted in
which either of the parties chooses to exact fulfillment. (see 10
Manresa 71.
Effect of unaccepted unilateral promise.
A unilateral promise or offer to sell or to buy a thing which is not
accepted creates no juridical effect or legal bond. Such
unaccepted imperfect promise or offer is called policitacion. A
period may be given to the offeree within which to accept the
offer. (infra.)
Meaning of option.
An option is a privilege existing in one person for which he has
paid a consideration which gives him the right to buy/sell, for
example, certain merchandise or certain specified property,
from/to another person, if he chooses, at any time within the
agreed period at a fixed price, or under, or in compliance with
certain terms and conditions.
ART. 1480. Any injury to or benefit from the thing sold, after the
contract has been perfected, from the moment of the perfection
of the contract to the time of delivery, shall be governed by
articles 1163 to 1165, and 1262.
This rule shall apply to the sale of fungible things, made
independently and for a single price, or without consideration of
their weight, number, or measure. Should fungible things be sold
for a price fixed according to weight, number, or measure, the
risk shall not be imputed to the vendee until they have been
weighed, counted, or measured, and delivered, unless the latter
has incurred in delay. (1452a)