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From Atty. Deanabeth C. Gonzales, Professor Rizal Technological University, CBET

This document is a professor sharing portions of law books online to help students who cannot afford books during the pandemic. The professor explains that they have soft copies of portions of books on Law of Sales from reports former students submitted. Short summaries and explanations of the portions are provided for educational purposes only, as copyright is not intended to be infringed. It is hoped that making these portions available will benefit less privileged students.
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0% found this document useful (0 votes)
228 views7 pages

From Atty. Deanabeth C. Gonzales, Professor Rizal Technological University, CBET

This document is a professor sharing portions of law books online to help students who cannot afford books during the pandemic. The professor explains that they have soft copies of portions of books on Law of Sales from reports former students submitted. Short summaries and explanations of the portions are provided for educational purposes only, as copyright is not intended to be infringed. It is hoped that making these portions available will benefit less privileged students.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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From Atty. Deanabeth C.

Gonzales, Professor Rizal Technological University, CBET

Sept. 13, 2020

For everyone who will get hold of a copy or portions of this material:

This is posted online in the light of the pandemic covid-virus which adversely affect not just the
Philippines but the entire world. It is a privilege for me to teach part-time in a state university for more
than a decade now. I teach subjects in the College of Business and Entrepreneurial Technology
(CBET), subjects which are all part of the Board Exam for CPAs. Being a CPA-Lawyer, I know for a
fact that having a book is a must in studying any law subject. However, teaching in a school where
many students cannot afford to buy a book, my former students in the past years can attest to the fact
that I went out of my way to pay for books in advance and allow some students to pay me in
installments over the entire semester just for them to have a book. Nevertheless, some students still
cannot afford to buy a book, and attended classes by just walking to school. Being a product of the
Public School System in the Philippines, up to college in PUP Sta. Mesa for Accountancy, I fully
understand the money issue in buying books for many students.

With Social Distancing rules and hygienic issues during this pandemic, students are not encouraged to
make use of the university physical library and the online library is not yet that fully operational. Hence,
I decided to post portions of some books online to help those students who cannot afford to buy a
book, specially now that unemployment in the country has risen at all-time high.

Portions of the book were copied by former CBET students from the book Law on Sales, Agency and
Bailments by Hector De Leon (definitely not the latest edition) and from other books/sources (i.e., Law
on Sales, Agency, Pledges and Mortgages by Carlos Suarez, Alexander Suarez, 2008 ed.) when they
were asked to report in class. I wasn’t too happy to see reports which were mostly copied from the
books but I got the softcopies of their reports anyway sent thru email. In the end, I found myself having
a softcopy of many portions of the books on Law of Sales. There is no copyright infringement here
because it is for educational purposes and only portions of the book will be posted to help students who
cannot afford to buy a book in this pandemic times.

Note that the postings will not cover the entire assignment given for each session or particular day.
Rather, the postings will explain only some portions of the assignment for the day based on the books
previously used by the former CBET students. There is no new Civil Code to date so that the contents
of the books still apply. I will not prescribe any book on Sales for this semester in view of the financial
difficulty for most families. Students can buy or borrow any edition of the book on sales by any author.
Others may download the proper civil code provisions from the internet, make use of whatever postings
available in the group/class messenger or do own research. Students are hereby encouraged to post
in the group/class messenger any material that will be helpful for your classmates.

With no intent to have financial gain, but only to help students from the less privilege sector of our
society during this pandemic times, I hope many will benefit from this posting.

It may seem to be a cliché that “The Youth is the Hope of the Fatherland,” spoken by Dr. Jose Rizal.
Yet, in times like this, we need to give hope and to assist all students who will face more challenging
times ahead.

More power to all Filipinos and to all educators who in this pandemic times make extra efforts to
educate all learners.

May God who made heaven and earth continue to bless us all through Jesus Christ, by whose
blood shed on the cross save us all.

Maraming salamat po.


LAW ON SALES
Ref. book: Law on Sales, by Hector De Leon.

SECTION 3. — Conditions and Warranties

ART. 1545. Where the obligation of either party to a contract of sale is subject to any
condition which is not performed, such party may refuse to proceed with the contract or
he may waive performance of the condition. If the other party has promised that the
condition should happen or be performed, such first mentioned party may also treat the
nonperformance of the condition as a breach of warranty.
Where the ownership in the thing has not passed, the buyer may treat the fulfillment
by the seller of his obligation to deliver the same as described and as warranted
expressly or by implication in the contract of sale as a condition of the obligation of the
buyer to perform his promise to accept and pay for the thing.

Meaning of condition.
A condition, as used in Article 1545, means an uncertain event or contingency on the happening of
which the obligation (or right) of the contract depends. In such a case, the obligation of the contract
does not attach until the condition is performed. (see Art. 1462)

Effect of nonfulfillment of condition.


A contract of sale may be absolute or conditional. (Art. 1458.)
(1) If the obligation1 of either party is subject to any condition and such condition is not fulfilled,
such party may either:
(a) refuse to proceed with the contract; or
(b) proceed with the contract, waiving the performance of the condition.
(2) If the condition is in the nature of a promise that it should happen, the nonperformance of such
condition may be treated by the other party as a breach of warranty. (see Art. 1546.)

ART. 1546. Any affirmation of fact or any promise by the seller relating to the thing is
an express warranty if the natural tendency of such affirmation or promise is to induce
the buyer to purchase the same, and if the buyer purchases the thing relying thereon. No
affirmation of the value of the thing, nor any statement purporting to be a statement of
the seller’s opinion only, shall be construed as a warranty, unless the seller made such
affirmation or statement as an expert and it was relied upon by the buyer. (n)

Effect of express warranty.

Warranties by the seller may be express, as in the above article, or implied, as in Article 1547. An
express warranty is any affirmation of fact or any promise by the seller relating to the thing, the natural
tendency of which is to induce the buyer to purchase the thing and the buyer thus induced, does
purchase the same.

Effect of expression of opinion.


A mere expression of opinion, no matter how positively asserted, does not import a warranty unless
the seller is an expert and his opinion was relied upon by the buyer. Thus, assertions that things are
fine or valuable or better than products of rival manufacturers are in their nature so dependent on
individual opinion that no matter how positive the seller’s assertion may be, they are not held to create
a warranty.

2
ART. 1547. In a contract of a sale, unless a contrary intention appears, there is:
(1) An implied warranty on the part of the seller that he has a right to sell the thing at
the time when the ownership is to pass, and that the buyer shall from that time have and
enjoy the legal and peaceful possession of the thing;
(2) An implied warranty that the thing shall be free from any hidden faults or defects,
or any charge or encumbrance not declared or known to the buyer.
This article shall not, however, be held to render liable a sheriff, auctioneer,
mortgagee, pledgee, or other person professing to sell by virtue of authority in fact or
law, for the sale of a thing in which a third person has a legal or equitable interest. (n)

Implied warranties in sale.


The term implied warranty is reserved for cases where the law attaches an obligation to the seller
which is not expressed in any words. (1 Williston, op. cit., p. 498.) Implied warranties under Articles
1547 and 1562 are:
(1) Implied warranty as to seller’s title. — that the seller guarantees that he has a right to sell the
thing sold and to transfer ownership to the buyer who shall not be disturbed in his legal and peaceful
possession thereof (Art. 1548.);

(2) Implied warranty against hidden defects or unknown encumbrance. — that the seller guarantees
that the thing sold is free from any hidden faults or defects or any charge or encumbrance not declared
or known to the buyer (Art. 1561.);

(3) Implied warranty as to fitness or merchantability. — that the seller guarantees that the thing sold
is reasonably fit for the known particular purpose for which it was acquired by the buyer or, where it was
bought by description, that it is of merchantable quality. (Art. 1562.)

SUBSECTION 1. — Warranty in Case of Eviction

ART. 1548. Eviction shall take place whenever by a final judgment based on a right prior to
the sale or an act imputable to the vendor, the vendee is deprived of the whole or of a part of the
thing purchased.
The vendor shall answer for the eviction even though nothing has been said in the contract
on the subject.
The contracting parties, however, may increase, diminish, or suppress this legal obligation
of the vendor.

Meaning of eviction.
Eviction may be defined as the judicial process, whereby the vendee is deprived of the whole or
part of the thing purchased by virtue of a final judgment based on a right prior to the sale or an act
imputable to the vendor.

Essential elements of warranty against eviction.


The essential elements are:
(1) The vendee is deprived in whole or in part of the thing purchased;
(2) He is so deprived by virtue of a final judgment (Art. 1557.);
(3) The judgment is based on a right prior to the sale or an act imputable to the vendor;
(4) The vendor was summoned in the suit for eviction at the instance of the vendee (Art. 1558.);
(5) There is no waiver on the part of the vendee.
Warranty against eviction refers to trespass in law.

Mere trespass in fact does not give rise to the application of the doctrine of eviction. (see Art. 1590.)
In such case, the vendee has a direct action against the trespasser in the same way as the lessee has
such right. (Art. 1664.)

The disturbance referred to in the case of eviction is a disturbance in law which requires that a
person go to the courts of justice claiming the thing sold, or part thereof, and invoking reasons. If final
judgment is rendered depriving the vendee of the thing sold or any part thereof, the doctrine of eviction
becomes applicable.

Vendor’s liability is waivable.


Warranty is not an essential element of a contract of sale and may, therefore, be increased,
diminished, or suppressed by agreement of the parties. (Art. 1548, par.3.)

Any stipulation, however, exempting the vendor from the obligation to answer for eviction shall be
void if he acted in bad faith. (Art. 1553.)

ART. 1549. The vendee need not appeal from the decision in order that the vendor
may become liable for eviction.

Vendee has no duty to appeal from judgment.


The vendee’s right against the vendor is not lost because he, the vendee, did not appeal. With a
judgment becoming final whatever be the cause of finality, the requirement of the law is deemed
satisfied.

Furthermore, the vendor, having been notified of the action, could have very well followed up the
case and made use of all possible remedies. If he did not do that, he should suffer for his omission. In
reality, he does not have the right to demand of the vendee such diligence that he himself did not have
and which he was more obliged to observe, especially if the cause of eviction was anterior to the sale.

ART. 1550. When adverse possession had been commenced before the sale but the
prescriptive period is completed after the transfer, the vendor shall not be liable for
eviction.

Effect of prescription.
By prescription, one acquires ownership and other real rights through the lapse of time in the
manner and under the conditions prescribed by law. In the same way, rights and actions are lost by
prescription. (Art. 1106.)

(1 ) Completed before sale. — The vendee may lose the thing purchased to a third person who has
acquired title thereto by prescription. When prescription has commenced to run against the vendor and
was already complete before the sale, the vendee can enforce the warranty against eviction.

(2) Completed after sale. — Even if prescription has started before the sale but has reached the
limit prescribed by law after the sale, the vendor is not liable for eviction. The reason is that the vendee
could easily interrupt the running of the prescriptive period by bringing the necessary action.

ART. 1551. If the property is sold for nonpayment of taxes due and not made known
to the vendee before the sale, the vendor is liable for eviction. (n)

4
Deprivation for nonpayment of taxes.
If the vendee is deprived of the ownership of the property because it is sold at public for
nonpayment of taxes due from the vendor, the latter is liable for eviction for an act imputable to him. It
is required, however, that at the time of the sale, the nonpayment of taxes was not known to the
vendee.

ART. 1552. The judgment debtor is also responsible for eviction in judicial sales,
unless it is otherwise decreed in the judgment. (n)

Liability of judgment debtor.


While the rule on implied warranty does not apply to a sheriff who sells by virtue of authority in law
(Art. 1549, par. 2.), the judgment debtor is responsible for eviction (Art. 1552.) and hidden defects (Art.
1570.) even in judicial sales, unless otherwise decreed in the judgment.

Article 1552 is based on the general principle that a person may not enrich himself at the expense
of another.

ART. 1553. Any stipulation exempting the vendor from the obligation to answer for
eviction shall be void, if he acted in bad faith.

Stipulation waiving warranty.


1. Effect of vendor’s bad faith. — The vendor’s bad faith under Article 1553 consists in his knowing
beforehand at the time of the sale, of the presence of the fact giving rise to eviction, and its possible
consequence.
2. Effect of vendee’s bad faith. — It is a requisite, however, that the vendee is not himself guilty of bad
faith in the execution of the sale. If he knew the defect of title at the time of sale, or had knowledge of
the facts which should have put him upon inquiry and investigation as might be necessary to acquaint
him with the defects of the title of the vendor, he cannot claim that the vendor has warranted his legal
and peaceful possession of the property sold on the theory that he proceeded with the sale with the
assumption of the danger of eviction.

ART. 1554. If the vendee has renounced the right to warranty in case of eviction, and
eviction should take place, the vendor shall only pay the value which the thing sold had
at the time of the eviction. Should the vendee have made the waiver with knowledge of
the risks of eviction and assumed its consequences, the vendor shall not be liable.

Kinds of waiver of eviction.


Article 1554 treats of two kinds of waiver, namely:
(1) Consciente, that is, the waiver is voluntarily made by the vendee without the knowledge and
assumption of the risks of eviction; and
(2) Intencionada, that is, the waiver is made by the vendee with knowledge of the risks of eviction and
assumption of its consequences.

Effect of waiver by vendee.


1. If the waiver was only conscious, the vendor shall pay only the value which the thing sold had at the
time of eviction.
2. In the second kind of waiver, the vendor is exempted from the obligation to answer for eviction,
provided he did not act in bad faith.
ART. 1555. When the warranty has been agreed upon or nothing has been stipulated
on this point, in case eviction occurs, the vendee shall have the right to demand of the
vendor:
(1) The return of the value which the thing sold had at the time of the eviction, be it
greater or less than the price of the sale;
(2) The income or fruits, if he has been ordered to deliver them to the party who won
the suit against him;
(3) The costs of the suit which caused the eviction and, in a proper case, those of the
suit brought against the vendor for the warranty;
(4) The expenses of the contract, if the vendee has paid them;
(5) The damages and interests and ornamental expenses, if the sale was made in bad
faith. (1478)

Rights and liabilities in case eviction occurs.


The provisions of the above article specify in detail the rights and liabilities of the vendor and the
vendee in the event eviction takes place “when the warranty has been agreed upon or nothing has
been stipulated on this point,” that is, in the absence of waiver of eviction by the vendee. (Art. 1554.)

1. Return of value of thing. — If at the time of the eviction the value of the property is really more or less
than its value at the time of the sale, by reason of improvements or deterioration, it is but just that the
vendor should pay the excess or not suffer the damage. All kinds of improvements whether useful or
necessary or even recreational expense voluntarily incurred by the vendee (Arts. 546548.) or caused
by nature or time (Art. 551, ibid.) insofar as they may affect the value of property, are taken into account
in determining the increase in value.

2. Income or fruits of thing. — The vendee is liable to the party who won the suit against him for the
income or fruits received only if so decreed by the court. The obvious inference from this provision is
that to the vendee belongs the use, free of any liability, of the subject matter of the sale. And this
benefit is not by any means gratuitous. It is offset by the use without interest of the money of the
vendee by the vendor.

3. Costs of the suit. — The vendee is also entitled to recover the expense of litigation resulting in
eviction, including the costs of the action brought against the vendor to enforce his warranty. “Costs of
the suit” mentioned in No. (3) does not include travelling expenses incurred by the vendee in defending
himself in the action. He is not entitled to recover damages unless the sale was made by the vendor in
bad faith. (No. 5.)

4. Expenses of the contract. — In the absence of any stipulation to the contrary, the expenses in the
execution and registration of the sale are borne by the vendor. However, if the vendee should have
paid for such expenses, he shall have the right to demand the same from the vendor.
5. Damages and interests. — The right of the vendee to demand “damages and interests and
ornamental expenses” is qualified by the condition that the sale was made in bad faith. If good faith is
presumed, the vendee is not entitled to recover damages unless bad faith on the part of the vendor is
shown in making the sale.

ART. 1556. Should the vendee lose, by reason of the eviction, a part of thing sold of
such importance, in relation to the whole, that he would not have bought it without said
part, he may demand the rescission of the contract; but with the obligation to return the
thing without other encumbrances than those which it had when he acquired it.

6
He may exercise this right of action, instead of enforcing the vendor’s liability for
eviction.
The same rule shall be observed when two or more things have been jointly sold for a
lump sum, or for a separate price for each of them, if it should clearly appear that the
vendee would not have purchased one without the other.

Alternative rights of vendee in case of partial eviction.


This article contemplates of partial eviction, while Article 1554 treats of total eviction. It states the
rule that if there is partial eviction, the vendee has the option either to enforce the vendor’s liability for
eviction (Art. 1555.) or to demand rescission of the contract. The above rule is applicable —
(1) When the vendee is deprived of a part of the thing sold if such part is of such importance to the
whole that he would not have bought the thing without said part (par. 1.); or
(2) When two or more things are jointly sold whether for a lump sum or for a separate price for
each, and the vendee would not have purchased one without the other. (par. 2.)

ART. 1557. The warranty cannot be enforced until a final judgment has been rendered,
whereby the vendee loses the thing acquired or a part thereof.

ART. 1558. The vendor shall not be obliged to make good the proper warranty, unless
he is summoned in the suit for eviction at the instance of the vendee.

Formal summons to vendor essential.


Another essential requisite before a vendor may be legally liable for eviction is that he should be
summoned in the suit for eviction at the instance of the vendee, to give the vendor an opportunity to
intervene and defend the title that he has transferred.

ART. 1559. The defendant vendee shall ask, within the time fixed in the Rules of Court
for answering the complaint, that the vendor be made a codefendant.

ART. 1560. If the immovable sold should be encumbered with any non-apparent
burden or servitude, not mentioned in the agreement, of such a nature that it must be
presumed that the vendee would not have acquired it had he been aware thereof, he may
ask for the rescission of the contract, unless he should prefer the appropriate indemnity.
Neither right can be exercised if the non-apparent burden or servitude is recorded in the
Registry of Property, unless there is an express warranty that the thing is free from all
burdens and encumbrances.
Within one year, to be computed from the execution of the deed, the vendee may
bring the action for rescission, or sue for damages.
One year having elapsed, he may only bring an action for damages within an equal
period, to be counted from the date on which he discovered the burden or servitude.

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