Sales Part 8

COVERAGE OF DISCUSSION:
• OBLIGATIONS OF THE VENDEE
 Obligations of the vendee

1. To accept the delivery of the thing sold. (Art. 1582)

 When buyer deemed to have accepted the goods
1. When he intimates to the seller that he is accepting them.
2. When he does any act in relation to the goods which is inconsistent with the ownership of the seller.
 Thus, the buyer is deemed to have accepted the goods if he begins to consume them or give them to others, or if he has performed additional work on them.

3. When he retains the goods after the lapse of a reasonable time without intimating to the seller that he has rejected them. (Art.1585)
 Delivery of goods in installments
 As a general rule, the buyer is not bound to accept delivery of the goods in installments, unless otherwise agreed. (Art. 1583) This
is consistent with the rule that payment or performance must be complete. (Art. 1233)
 If there is a stipulation and the seller makes defective deliveries in respect of one or more installments, or the buyer neglects or
refuses without just cause to take delivery of or pay one or installments, the injured party may, depending upon the circumstances
of the case:
1. Refuse to proceed further with the contract and sue for damages for breach of the entire contract; or
2. Claim compensation but not damages, if the breach is severable. (Art. 1583)
 Right of buyer to examine goods before accepting them
 General rule: The buyer has the right to examine the goods before accepting them.
 Exceptions, i.e., such right is not available in the following cases:
1. When there is an agreement to that effect.
2. When there is a stipulation that the goods shall not be delivered to the buyer until he has paid the price such as when the goods are
marked with the words "collect on delivery" - unless there is an agreement or of trade permitting usage such examination. (Art.
1584)
 Effect of acceptance of goods on seller's liability for breach of warranty
 General rule: The seller is not discharged from liability in damages or other remedy for breach of warranty by the
acceptance of the goods.
 Exceptions. i.e., the seller is discharged from such liability in the following cases:
1. If there is an agreement, whether express or implied.
2. If the buyer fails to give notice to the seller breach of warranty within reasonable time after the buyer knows or ought to
know of such breach. (Art. 1586)
 Effect when buyer refuses to accept delivery
1. If refusal to accept delivery is justified (such as when the quantity is not complete or the goods being delivered are
different from those stipulated)
A. Buyer has no duty to return goods the seller unless otherwise agreed. (Art. 1587)
B. Title to the goods does not pass on to him. (Art. 1588)
C. He shall not be obliged to pay the price.
D. If he constitutes himself depositary of the goods, he shall be as liable as such. (Art. 1587)
 Obligation of the buyer
 It is sufficient that the buyer notifies the seller that he refuses to accept the goods (Art. 1587) so that the seller can take action on
them.

2. If refusal to accept delivery is not justified.

A. Title to the goods passes to the buyer from the moment the goods are placed at his disposal, (Art. 1588) except in the
following:
1. When there is a stipulation to the contrary. (Art. 1588)
2. When the seller has reserved the ownership of the goods as a security for the payment of the price. (Arts. 1523 and 1503)

B. He shall be obliged to pay the price.

 To pay the price of the thing. (Art. 1582)
A. Time and place of payment of the price
I. At the time and place stipulated.
II. Time and place of delivery of the thing, in the absence of stipulation. (Art. 1582)

B. When interest will be paid on the price

 The buyer shall pay interest for the period between the delivery of the thing and the payment of the price, in the following cases:
1. If there is a stipulation. If interest was stipulated but the rate was not indicated, the rate shall be the legal rate of 6%. (Effective
July 1, 2013, the legal rate shall be 6% per Circular No. 799 of the Monetary Board.)
2. If the thing sold produces fruits or income.
3. If he is in default, from the time of judicial or extrajudicial demand for the payment of the price. (Art. 1589)
 Suspension of payment of the price by vendee

 Grounds
1. Disturbance in the vendee’s possession or ownership of the thing purchased. May the vendee
 Thus, suspend payment if a complaint for eviction was brought against him.

2. Reasonable grounds to fear such disturbance, by a vindicatory action or foreclosure of mortgage. (Art. 1590)
 Thus, the vendee may suspend payment if he receives a demand letter which threatens the filing of a complaint for the recovery of the thing sold or
for foreclosure of the mortgage constituted on the thing.
 Duration of suspension of payment
 Until the vendor has caused the disturbance or danger to cease. (Art. 1590)
 When right to suspend payment not available
A. If the vendor gives security for the return of the price.
B. If it has been stipulated that the vendee shall pay the price notwithstanding the existence of the aforementioned disturbance or danger.
C. If the disturbance is a mere act of trespass. (Art. 1590)
 Thus, the mere entry and presence of squatters will not justify suspension of the payment of the price by the buyer.
 Rescission by vendor
1. Immovables
A. When vendor is entitled to sue for immediate rescission
 The vendor may immediately sue for rescission of the sale if there are reasonable grounds to fear:

1. the loss of the immovable property sold, and

2. its price. (Art. 1591)

 Example: S sold his lot to B for P50,000.00. While the lot had been delivered to B, B was to pay the price after 2 months. If the lot was in danger
of being eroded because B was cutting all the trees planted thereon and B was squandering his money in gambling, S may sue for the immediate
rescission of the sale.
 If one or both grounds do not exist, the vendor may choose between

1. fulfillment of the contract, with damages, and

2. rescission of the contract, with damages. (Art. 1191)

2. Pactum commissorium – This is an agreement between the vendor and the vendee in the sale of an immovable that rescission
of the contract shall of right take place if the vendee fails to pay the price at the time agreed upon. (Art. 1592)
3. Movables
 Grounds for immediate rescission
 Rescission of the sale of a movable shall of right take place in the interest of the vendor, i.e., at bis option, if at the time fixed for the
delivery of the thing, the vendee:
1. does not appear to receive the thing,

2. or having appeared, does not pay the price, unless a longer period is stipulated for its payment. (Art. 1593)