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160 SALES

Chapter 3

EFFECTS OF THE CONTRACT WHEN

THE THING SOLD HAS BEEN LOST

ART. 1493. If at the time the contract of sale is per-

fected, the thing which is the object of the contract
has been entirely lost, the contract shall be without
any effect.
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, pay-
ing its price in proportion to the total sum agreed upon.
(1460a)

Effect of loss of thing at the time

of sale.
The loss or injury referred to in this article is one which has
taken place before or at the time the contract of sale is perfected.
It must be distinguished from the loss or injury mentioned in
Articles 1480 and 1504 which occurs after the contract is perfected
but prior to the time of delivery.
(1) Thing entirely lost. — Where the thing is entirely lost at the
time of perfection, the contract is inexistent and void (Art. 1409[3].)
because there is no object. (Art. 1318, par. 2.) There being no con-
tract, there is no necessity to bring an action for annulment.
(2) Thing only partially lost. — If the subject matter is only
partially lost, the vendee may elect between withdrawing from
the contract and demanding the remaining part, paying its pro-
portionate price. (Art. 1493, par. 2.)

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Art. 1494 EFFECTS OF THE CONTRACT WHEN THE THING 161

SOLD HAS BEEN LOST

EXAMPLES:
(1) S sold his car to B. Unknown to both of them, the car
has been totally destroyed before they agreed on the sale. In
this case, there is no valid contract of sale for lack of object. S,
as owner, bears the loss and B does not have to pay for the
price.
(2) If the car sold is only partially destroyed, there still re-
mains of the object. However, since it is not of the character or
in the condition contemplated by the parties, the buyer may
withdraw from the contract or demand the delivery of the car,
paying its proportionate price.

When a thing considered lost.

The thing is lost when it perishes or goes out of commerce or
disappears in such a way that its existence is unknown or it can-
not be recovered. (Art. 1189[2].)
The word “perishes” is sufficiently inclusive as to cover a case
where there has been material deterioration or complete change
in the nature of the thing in such a manner that it loses its former
utility taking into consideration the time the contract was entered
into. (see 10 Manresa 129.)

ART. 1494. Where the parties purport a sale of spe-

cific goods, and the goods without the knowledge of
the seller have perished in part or have wholly or in a
material part so deteriorated in quality as to be sub-
stantially changed in character, the buyer may at his
option treat the sale:
(1) as avoided; or
(2) as valid in all of the existing goods or in so
much thereof as have not deteriorated, and as bind-
ing the buyer to pay the agreed price for the goods in
which the ownership will pass, if the sale was divis-
ible. (n)

Effect of loss in case of specific goods.

Article 1493 applies to a sale of specific thing. Article 1494, on
the other hand, applies to sales of goods, that is, the object of the
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162 SALES Art. 1494

sale consists of a mass of “specific goods” which means “goods

identified and agreed upon at the time a contract of sale is made.”
(Art. 1636.)
Both articles have actually the same essence providing two
alternative remedies to the buyer in case of deterioration or par-
tial loss of the object prior to the sale, namely: to rescind or with-
draw from the contract or to give it legal effect, paying the pro-
portionate price of the remaining object.
(1) Sale divisible. — The second option is available only if the
sale is divisible. (Art. 1494, par. 2.) A contract is divisible when its
consideration is made up of several parts. (see Art. 1420.) When
the consideration is entire and single, the contract is indivisible.
(2) Sale indivisible. — Suppose the sale is not divisible, what
price is the buyer to pay for the remaining goods if he elects to
continue with the sale? It is believed that the buyer should be
made to pay only the proportionate price of the remaining goods
as provided for in paragraph 2 of the preceding article. If the sale
is indivisible, the object thereof may be considered as a specific
thing.

EXAMPLE:
Suppose the subject matter sold was 100 cavans of rice in
the warehouse of S at P1,000.00 per cavan or for a total price of
P100,000.00. If 60 cavans of rice were lost, B may, at his option,
withdraw from the contract without the obligation to pay for the
rice; or demand the delivery of the 40 cavans, but binding him
to pay the agreed price thereof which is P40,000.00.
If the contract is indivisible, that is, the 100 cavans of rice
were sold for P100,000.00 fixed without consideration of the
number of cavans, B should be made to pay only the propor-
tionate price of 40 cavans which is also P40,000.00.

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