DELIVERY

WHEN OWNERSHIP NOT

TRANSFERRED UPON DELIVERY
Transfer of ownership where goods sold
delivered to CARRIER. (Carrier-one, such
as a person, business, or organization, that
deals in the transport of passengers or
goods)
(1) General rule
— As stated above, the general rule is that
delivery passes title in the thing sold and
delivery to the carrier is deemed to be a
delivery to the buyer. (Art. 1523, par. 1.)
The risk of loss therefore falls upon the
buyer.
 EXCEPTIONS
1. if a contrary intention appears by the
terms of the contract.
2. In the cases provided in the second and
third paragraphs of Article 1523; and
(possession or ownership may be thus
reserved notwithstanding the delivery of
the goods to the buyer or to a carrier)
3. In the cases provided in the first, second,
and third paragraphs of Article 1503.
 UNPAID SELLER
An unpaid Seller is one who has not
been paid or rendered the whole
price or who has received a bill of
exchange or other negotiable
instrument as conditional payment
and the condition on which it was
received has been broken by reason
of the dishonor of the instrument.
RIGHTS OF UNPAID SELLER
1. A lien on the goods or right to retain
them for the price while in his
possession
2. A right of stopping the goods in
transitu in case of insolvency of the
buyer; requisites:
(a) the seller must be unpaid;
(b) the buyer must be insolvent;
(c) the goods must be in transit;
(d) the seller must either actually take
possession of the goods sold or give
notice of his claim to the carrier or other
person in possession;
(e) the seller must surrender the
negotiable document of title, if any,
issued by the carrier or bailee; and
(f) the seller must bear the expenses of
delivery of the goods after the exercise
of the right.
3. A right of resale
4. A right to rescind the sale
 RULES AS TO PREFERENCE OF
OWNERSHIP IN CASE OF DOUBLE SALE

1. If the property sold is

movable, the ownership
shall be acquired by the
vendee who first takes
possession in good faith.
2. If the property sold is immovable,
the ownership shall belong to:
(a) the vendee who first registers
the sale in good faith in the Registry
of Deeds has preferred right over
another vendee who has not
registered his title even if the latter
is in actual possession of the
immovable property – governed by
the principle prius tempore, patior
jure (first in time, stronger in right)
(b)in the absence of
registration, the vendee who
first takes possession in good
faith; and
(c)in the absence of both
registration and possession,
the vendee who presents the
oldest title (who first bought
the property) in good faith.
CONDITION AND WARRANTIES

Condition means an
uncertain event or
contingency on the
happening of which the
obligation (or right) of the
contract depends.
Warranty is a statement or
representation made by
the seller of goods and by
which he promises or
undertakes to insure that
certain facts are or shall
be as he then represents
them.
WARRANTY AGAINST
EVICTION
 EVICTION
It is the deprivation of the vendee of the whole
or a part of the thing sold by virtue of a Final
judgement based on a right prior to the sale or
an act imputable to the vendor.
 ESSENTIAL ELEMENTS
Requisites in order that the seller’s
“warranty against eviction may be
enforced
1. The vendee is evicted" in whole
or in part" of the thing purchased.
2. The eviction is by final judgement.
 KINDS OF WAIVER OF
EVICTION
Consciente – the waiver is
voluntarily made by the vendee
without the knowledge and
assumption of the risks of eviction.
If the waiver was only conscious,
the vendor shall pay only the value
which the thing sold had at the time
of eviction.
Intencionada – the waiver is
made by the vendee with
knowledge of the risks of
eviction and assumption of
its consequence. The vendor
is exempted from the
obligation to answer for
eviction, provided he did not
act in bad faith.
RIGHTS OF THE VENDEE AGAINST THE
VENDOR IN CASE EVICTION OCCURS
1. return of the value of the thing sold at
the time of eviction;
2. income or fruits if he has been
ordered to deliver them to the party who
won the suit against him;
3. costs of the suit;
4. expenses of the contract;
5. damages and interests and
ornamental expenses if the sale was
made in bad faith.
DOCTRINE OF CAVEAT VENDITOR
AND CAVEAT EMPTOR
Caveat venditor (Let the seller
beware)
– the vendor is liable to the vendee
for any hidden faults or defects in
the thing sold, even though he was
not aware thereof (Art. 1566).
- Based on the principle that a
sound price warrants a sound
article.
Caveat emptor(Let the buyer
beware)
– applies in sheriff’s sale, sales of
animals, and tax sales, for there is
no warranty of title or quality on the
part of the seller in such sales.
– Also applies in double sales of
property where the issue is who
between two vendees has a better
right to the property .
– Requires the purchaser to
be aware of the supposed
title of the vendor and one
who buys without checking
the vendor’s title takes all the
risks and losses consequent
to such failure [Solvoso vs.
Tanega, 87 SCRA 34
 ALTERNATIVE REMEDIES OF THE
BUYER TO ENFORCE WARRANTY
1. Accion redhibitoria – to
withdraw from the contract

2. Accion quanti minoris –

demand a proportionate
reduction of the price, with a
right to damages in either case.
 OBLIGATIONS OF THE VENDEE

1. The vendee is
obliged to accept
delivery; and
2. pay the price of
the thing sold.
 EXTINGUISHMENT OF SALE
1. Common – those causes which are also the
means of extinguishing all other contracts like
payment, loss of the thing, condonation, etc.
2. Special – those causes which are recognized
by the law on sales. Such as exact fulfillment of
the obligation, Cancel the sale, foreclose the
chattel mortgage on the thing sold, if one has
been, constituted, right of stoppage in
transitu, proportional reduction of the price,
rescission of the contract,
3. Extra-special – conventional redemption and
legal redemption.
CONVENTIONAL REDEMPTION
It is the right which the vendor reserves
to himself, to reacquire the property sold
provided he returns to the vendee the
price of the sale, the expenses of the
contract, any other legitimate payments
made therefore and the necessary and
useful expenses made on the thing sold,
and fulfills other stipulations which may
have been agreed upon.
 LEGAL REDEMPTION
It 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.
ASSIGNMENT OF CREDITS AND
OTHER INCORPOREAL RIGHTS
Assignment of credit
It is a contract by which the
owner of a credit transfers to
another his rights and actions
against a third person in
consideration of a price certain
in money or its equivalent (Art.
1458).
The assignment
involves no transfer of
ownership but merely
effects the transfer of
rights which the
assignor has at the time
to the assignee
BINDING EFFECTS OF ASSIGNMENT

1 As between the parties,

the assignment is valid
although it appears only in a
private document so long as
the law does not require a
specific form for its validity.
2 To affect third persons,
the assignment must appear
in a public instrument, and in
case it involves real property,
it is indispensable that it be
recorded in the Registry of
Deeds .
3 The assignee merely steps into
the shoes of the assignor, the former
acquiring the credit subject to
defenses (fraud, prescription, etc.)
available to the debtor against the
assignor. The assignee is deemed
subrogated to the rights as well as to
the obligations of the seller. He
cannot acquire greater rights than
those pertaining to the assignor. [Koa
vs CA, 219 SCRA 541].
OTHER IMPORTANT TERMS
Renunciation – the abandonment
of a right without a transfer to
another.

Agency – involves
representation, not transmission
wherein the agent acts for the
principal.
Substitution – the change of a
new debtor for the previous
debtor with the credit remaining
in the same creditor.

Subrogation – the change in the

person of the creditor with the
credit being extinguished.
 DACION EN PAGO

Dacion en pago is the

transmission of the
ownership of a thing by the
debtor to the creditor as the
accepted equivalent of the
performance of an obligation.
 PACTO DE RETRO
Ownership is transferred but the
ownership is subject to the condition
that the seller might recover the
ownership within a certain period of
time.

If the seller does not repurchase the

property upon the very day named in the
contract, he loses all interest thereon.
 REFERENCES
R.A. 386
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 THANK YOU

END OF
PRESENTATION
ON SALES