CHAPTER 1: NATURE AND FORM OF THE CONTRACT

ART. 1458
​ Contract of Sale
-​ an agreement whereby one of the parties obligates himself to transfer ownership
or deliver a thing to the other party who binds himself to pay for the price or its
equivalent.
​ Perfection of the contract
-​ it is perfected the moment there is a meeting of minds for both parties, regarding
the thing, and its price.
​ Characteristics of a contract of sale
a.​ Consensual
-​ perfected by mere consent
b.​ Bilateral
-​ Both parties have to fulfill their obligation, for one to transfer ownership
and the other to pay.
c.​ Onerous
-​ the thing sold is conveyed in consideration of the price and vice versa
d.​ Commutative
-​ because the thing sold is considered the equivalent of the price paid and
vice versa. However, because the thing sold is considered the equivalent
of the price paid and vice versa, the contract may be aleatory as in the
case of the sale of a hope
e.​ Nominate
-​ “sale” is a designated name in the law
f.​ Principal
-​ does not depend on other contracts
​ Essential Requisites:
a.​ Consent
-​ if there is an offer and acceptance
-​ if there is a meeting of minds between both parties.
-​ Both parties must have legal capacity to give consent.
b.​ Object
-​ the object must be a determinate thing.
c.​ Cause or consideration
-​ the price certain or its equivalent
​ Kinds of Contract:
a.​ Absolute
-​ not subject to any condition and ownership passes to the buyer once the
thing is delivered.
b.​ Conditional
-​ the contract is subject to certain conditions, like ownership will only
transfer if the price has been fully paid.
ART. 1459
-​ the subject matter or the object of the contract must be licit.
-​ It should not be contrary to law, morals, good customs, or public policy.
-​ must be within the commerce of men
-​ If illicit, the contract is void.

Rights to transfer ownership

a.​ Seller must be the owner or is authorized to transfer ownership
-​ the seller must be the owner of the thing or must be authorized to transfer
the ownership of the thing sold.
-​ nemo dat quod non-habet - one can sell only what one owns or is
authorized to sell
b.​ Right must exist at the time of delivery
-​ it is not required that the seller must be the owner of the thing sold at the
perfection of the contract of sale, however, it is required that he must be
the owner or is authorized to transfer ownership at the time the obligation
to deliver arises.

ART. 1460
a.​ Determinate thing
-​ A thing is determinate or specific (not generic) when it is particularly
designated or physically segregated from all others of the same class.
b.​ 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. It is sufficient that the thing is determinable or
capable of being made determinate without the necessity of a new or
further agreement between the parties

ART. 1461
​ Object of a contract of sale:
-​ a future thing may be the object of the sale provided that it has a potential or is
certain to come into existence and title passes to the buyer the moment it exists.
​ Sale of mere hope or expectancy
-​ hope can be the object of a sale and is subject to the condition that the thing
contemplated or expected will come into existence
​ EMPTIO REI SPERATAE
-​ 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
​ EMPTIO SPEI
-​ sale of the hope itself that the thing will come into existence, and buyer still has to
pay even if the thing did not exist.
ART. 1462
​ Existing goods:
-​ goods in the possession of the owner
​ Future goods:
-​ goods to be manufactured, raised, or acquired by the seller.
-​ valid only as an executory contract not as contract of sale
-​ no actual sale and transfer of ownership has yet taken place as long as the
future goods are not yet in the hands of the seller
ART. 1463
​ Sale of undivided interest:
-​ The legal effect of a sale of an undivided interest in a thing, is to make the buyer
co-owner.
-​ buyer may sell the thing but is limited to his portion only.
ART. 1464
​ Sale of an undivided share of a specific mass
​ ​ Fungible Goods:
-​ can be easily replaced
-​ goods - mass
​ ​ 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.
-​ buyer become co-owner with the owner of the whole mass
-​ the goods must be equal to the share bought, and in case the mass of the
goods is less than what was sold, buyer becomes full owner of the whole
mass and seller has to supply for the deficiency.
ART. 1465
​ Resolutory condition
-​ 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
​ Contract of agency
-​ a person binds himself to render service in representation of another or a
principal, with the consent or authority of the principal.
-​ the agent receives the goods as the goods of the principal who retains his
ownership over them and has the right to fix the price and the terms of the sale
and receive the proceeds less the agent’s commission upon the sales made
ART. 1467
​ 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.
-​ Unlike a contract of sale wherein it is for the general market, a contract for a
piece of work is specially made because of the order of a buyer.
ART. 1468
​ 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
​ If the thing given in exchange consists partly in money and partly in another thing.
a.​ see if the intention is a sale or barter
b.​ if no intention present
-​ if the thing is more valuable than the money = Barter
-​ If the thing is equal or less than the money = sale
​ Sale distinguished form lease
-​ in a lease, the landlord or lessor transfers merely the tem- porary possession and
enjoyment of the thing leased. In a sale, the seller transfers ownership of the
thing sold.
​ DACION EN PAGO / DATION IN PAYMENT
-​ is the alienation of property to the creditor in satisfaction of a debt in money.
ART. 1469
​ When can price be certain
a.​ Stipulation
b.​ with references to another thing certain
c.​ The determination of the price is left to the judgment of a specified person or
persons and even before such determination
d.​ if third person cannot determine or acts in bad faith, contract becomes ineffective,
unless parties subsequently agree upon the price
e.​ If such a third person is prevented from fixing the price by the fault of the seller or
the buyer, the party not in fault may obtain redress against the party in fault which
consists of a choice between rescission or fulfillment, with damages in either
case. If the innocent party chooses fulfillment, the court shall fix the price.
ART. 1470
​ Effect of Gross inadequacy
​ GENERAL RULE:
-​ mere inadequacy of price does not affect the validity of the contract of sale
​ EXCEPTION:
a.​ Where Low Price Indicates A Defect In The Consent
-​ may indicate a defect in the consent such as when fraud, mistake, or
undue influence is present
b.​ Where price so low as to be“shocking conscience”
-​ where the price is so low that “a man in his senses and not under a
delusion” would not accept it, the sale may be set aside and declared an
equitable mortgage to secure a loan.
ART. 1471
​ Simulated Price
-​ if fictitious price or not real, contract is void, but may be disputed, subject to
reformation and valid as a donation
ART. 1472
Price on a given day at particular market.
-​ The above provision follows the principle in Article 1469 that a price is considered
certain if it could be determined with reference to another thing certain, “provided
said amount be certain.”
 -​ When an amount is fixed above or below the price on a given day or in a
particular exchange or market, the said amount must be certain; otherwise, the
sale is inefficacious (Art. 1474.) because the price cannot be determined.
ART. 1473
​ GENERAL RULE:
-​ Fixing of price cannot be left to the discretion of one party.
​ EXCEPTION:
-​ If the price is accepted by the other party
​ Reason why price fixing cannot be left to the discretion of one of them:
-​ the other could not have consented to the price, for he did not know what it was.
ART. 1474
​ Effect of failure to determine price
a.​ if an executory contract, the contract is ineffective.
b.​ where delivery has been made
-​ the buyer must pay a reasonable price therefore.
-​ Reasonable price or value of goods is generally the market price at the
time and place fixed by the contract or by law for the delivery of the goods
ART. 1475
​ Perfection of contract of sale
-​ the moment there is consent and there is a meeting of minds upon the thing
which is the object of the contract and upon the price, the reciprocal obligations
of the parties arise even when neither has been delivered.
​ Transfer of ownership
-​ the moment the thing is delivered to the buyer, ownership transfer even if price
has not been fully paid, unless it is subject to conditional sale.
-​ When contract is thru correspondence or thru telegram, there is perfection when
the offeror receives or has knowledge of the acceptance by the offeree.
-​ When a sale is made subject to a suspensive condition, perfection is had from
the moment the condition is fulfilled
When definite agreement on manner of payment essential.
-​ parties, however, still have to meet and agree on how and when the down
payment and installment payments are to be made
​ Effect of failure to pay price
-​ remedies of a vendor
a.​ demand specific performance
b.​ rescission with damages
ART. 1476
​ Sale by auction
-​ Where separate lots are the subject of separate biddings and are separately
knocked down, there is a separate contract in regard to each lot
-​ perfected by the fall of the hammer or in other customary manner.
Before perfection:
-​ 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.
​ Seller has the right to bid if:
-​ the right to bid was expressly reserved
-​ notice was given to the bidders
-​ it is not prohibited by law or stipulations
​ The owner of property which is offered for sale, either at public or private auction, has
the right to prescribe the manner, conditions, and terms of such sale. He may provide that all of
the purchase price or any portion thereof should be paid at the time of the sale, or that time will
be given for that payment, or that any or all bids may be rejected.

ART. 1477
​ Ownership of the thing sold transfers upon actual or constructive delivery to the vendee

ART. 1478
​ Ownership of the thing transferred by delivery
​ GENERAL RULE:
-​ Payment of the purchase price is not essential to the transfer of ownership, as
long as the property sold has been delivered.
​ EXCEPTION:
-​ Stipulation
-​ pactum reservati dominii - stipulation of reservation of title
-​ Contract to sell
-​ Contract of insurance
ART. 1479
​ Policitation
-​ A unilateral promise or offer to sell or to buy a thing which is not accepted creates
no juridical effect or legal bond
​ Option
-​ is a privilege existing in one person for which he has paid a consideration which
gives him the right to buy/sell, if he chooses, at any time within the agreed period
at a fixed price, or under, or in compliance with certain terms and conditions.
​ Option Contract
-​ It is a preparatory contract, separate and distinct from the main contract itself
-​ It gives the party granted the option the right to decide, whether or not to enter
into a principal contract, while it binds the party who has given the option, not to
enter into the principal contract with any other person during the agreed time
-​ An option must be supported by a consideration distinct from the price.
-​ An option without consideration is void; the effect is the same as if there was no
option.
-​ A unilateral promise to sell or to buy a determinate thing for a price certain does
not bind the promissor even if accepted and may be withdrawn at any time. It is
only if the promise is supported by a consideration distinct and separate from the
price that its acceptance will give rise to a perfected contract.
 -​ The optionee (holder of the option), after accepting the option and before he
exercises it, has the right, but not the obligation, to buy or sell, as the case may
be. Once the option is exercised, i.e., offer is accepted before a breach of the
option, a bilateral promise to sell and to buy ensues and both parties are then
reciprocally bound to comply with their respective undertakings
​ Option Money
-​ a consideration for the promise to buy or to sell
-​ not part of the purchase price
ART. 1480
​ Risk of loss:
a.​ before perfection
-​ seller assumes the risk
b.​ at the time of perfection
-​ contract is ineffective or void
c.​ after perfection but before delivery
-​ buyer assumes the risks, an exception to the rule res perit domino(owner
assumes risks)
-​ For the seller is not liable for anything which happens without his fraud or
negligence.
d.​ after delivery
-​ buyer assumes the risks
e.​ sale of mass of fungible things
-​ the risk shall not be imputed to the vendee until they have been weighed,
counted, or measured, and delivered.
ART. 1481
​ Sale by Description
-​ buyer has not seen the actual thing but relies upon the description given by the
seller whether if the representations were true or not
-​ if the bulk does not correspond with the description given, the contract may be
rescinded.
​ Sale by sample
-​ parties contracted solely with reference to the sample, with the understanding
that the bulk was like it.
-​ if the bulk is not the same with the sample, contract may be rescinded.
ART. 1462
​ Earnest money
-​ a value given by the buyer that is part of the purchase price to bind the bargain
-​ partial payment and is deducted from the full price.
-​ The earnest money forms part of the consideration only if the sale is
consummated upon full payment of the purchase price.
ART. 1483
​ GENERAL RULE:
-​ Contract of sale may be entered into any form, whether orally or in writing.
​ EXCEPTION:
 -​ Contracts under the statute of frauds, where it needs to be in writing or in a public
instrument for it to be enforceable.
a.​ Sale of personal property at a price not less than P500.00;
b.​ Sale of real property or an interest therein regardless of the price involved
-​ A sale of a piece of land or interest therein when made through an
agent is void unless the agent’s authority is in writing.
-​ For the sale of real property to be effective against third persons,
the sale must be registered in the Registry of Deeds (or Property)
of the province or city where the property is located. The sale must
be in a public document
c.​ Sale of property not to be performed within a year from the date thereof
regardless of the nature of the property and the price involved.
-​ Where form is required only for the convenience of the parties.
ART. 1484
​ Remedies of vendors in sale of personal property payable in installments.
a.​ demand fulfillment, if vendee failed to pay one installment
b.​ cancel the sale, if the vendee failed to pay 2 or more installments. Buyer can
demnad the return of payments made unless there is a stipulation about
forfeiture.
c.​ foreclose the chattel mortgage,if one has been constituted, if the vendee shall
have failed to pay two or more installments. Seller is not obligated to return
payment made by the vendee but he shall have no further action against
the vendee for the recovery of any unpaid balance of the price remaining
after the foreclosure and actual sale of the mortgaged chattel, and any
agreement to the contrary is void.
​ Remedies are alternative
-​ if vendors choose one remedy, he cannot anymore choose the other remedy.
ART. 1485
​ Preceeding articles is also applicable to contract of leases.
ART. 1486
​ In sales of personal property by installments or leases of personal property with option to
buy, the parties may stipulate that the installments or rents paid are not to be returned. Such a
stipu- lation is valid “insofar as the same may not be unconscionable under the circumstances
ART. 1877
​ GENERAL RULE:
-​ Expenses for the execution of sale shall be borne by the seller
​ EXCEPTION:
-​ Stipulation
ART. 1488
​ The expropriation of property for pub- lic use is governed by special laws.

CHAPTER 2: CAPACITY TO BUY OR SELL

ART. 1489
​ Who may enter into contract of sale:
​ GENERAL RULE:
-​ any persons who are authorized or can bind themselves may enter into contract
of sale.
​ EXCEPTION:
-​ Incapacitated persons
-​ EXCEPTION:
-​ Necessaries - if the thing is needed for sustenance, sale is valid.
​ Kinds of Incapicity
a.​ Absolute Incapity
-​ those who cannot bind themselves(minors, insane or demented persons,
deaf-mute who cannot write)
-​ effect - voidable
b.​ Relative Incapacity
-​ pertain only to certain persons or a certain properties( spouses)
-​ effect - void
ART. 1490
​ GENERAL RULE:
-​ Husband and wife cannot sell property to each other
​ EXCEPTION:
-​ When a separation of property was agreed upon in the marriage settlements
-​ When there has been a judicial separation of property
​ Reason:
-​ for the protection of third persons who, relying upon supposed property of either
spouse, enters into a contract with either of them only to find out that the property
relied upon was transferred to the other spouse.
ART. 1491
​ The following cannot sell each other property:
a.​ The guardian with regards to the property of his ward.
-​ effect - VOIDABLE
b.​ Agents, with regards to the principal, unless there is consent
-​ effect - VOIDABLE
c.​ Executors and administrators, the property of the estate under administration
-​ effect - VOIDABLE
d.​ Public officers or employees, with regards to the property that is under their
custody, aside from that they can buy/sell.
-​ effect - VOID
e.​ Justices, judges, lawyers, with regards to the property of the person they are
handling the case.
-​ effect - VOID
f.​ others specially disqualified by the law.
-​ effect - VOID
​ Reason for disqualification
 -​ grounded on public policy considerations which disallow the transactions entered
into by them, whether directly or indirectly, in view of the fiduciary relationship
involved or the peculiar control exercised by these individuals over the proper-
ties or rights covered.
ART. 1492
​ Compromise
-​ Is a Contract whereby The Parties,by reciprocal concessions, avoid litigation or
put an end to one al- ready commenced.
​ Renunciation
-​ a creditor gratuitously abandons his right against his creditor. The other terms
used by the law are condonation and remission.

CHAPTER 3: EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST

ART. 1493
​ Effect of loss of things at the time of sale
a.​ thing is entirely lost
-​ contract is void
b.​ thing is partially lost
-​ vendee may, withdraw from the contract
-​ vendee may, demand the remaining part paying its proportionate price
​ Thing is considered lost if it perishes or goes out of the commerce of man.

ART. 1494
​ Effect of loss in case of specific goods(bulk,mass)
a.​ Divisible sale
-​ as valid in all of the existing goods or in so much thereof as have not
deteriorated, and as binding the buyer to pay the agreed price for the
goods in which the ownership will pass
b.​ Indivisible sale
-​ buyer pays for the proportionate price

CHAPTER 4: OBLIGATIONS OF THE VENDOR

SECTION 1. GENERAL PROVISIONS

ART. 1495
​ Principal obligations of the vendor:
a.​ to transfer the ownership of the determinate thing
-​ the seller need not be the owner at the time of perfection of the contract,
however at the time of the delivery, he must have the authority or must be
the owner of thing.
 b.​ to deliver the thing, with its accessions and accessories, if any
-​ if the seller does not deliver at the time stipulated, the buyer may ask for
the rescission of the contract or fulfillment with the right to damages
c.​ to warrant against eviction and hidden defects
d.​ to take care of the thing with the diligence of a good father of a family
e.​ to pay for the expenses of the deed of sale, unless there is stipulation to the
contrary
ART. 1496
​ Ownership transfer upon delivery of the thing
​ Ways of delivery
1.​ Actual Delivery
-​ thing is placed in the control and possession of the buyer
-​ there is physical delivery
2.​ Constructive delivery
-​ have been held by construction of law
3.​ Quasi-traditio
-​ delivery of incorporeal rights
​ Kinds of constructive delivery:
a.​ by the execution of public instrument
-​ is equivalent to actual delivery
b.​ SYMBOLICAL TRADITION or TRADITIO SYMBOLICA
-​ Uses a symbol to represent the delivery
-​ key of a house
c.​ TRADITIO LONGA MANU
-​ delivery by mere consent of the parties or where the seller points to the
thing that is sold
-​ seller points to the cow that will be sold to the buyer
d.​ TRADITIO BREVI MANU
-​ buyer is already in possession of the thing and holds title not of an owner
-​ from lessee to an owner
e.​ TRADITIO CONSTITUTUM POSSESSORIUM
-​ from owner to lessee

SECTION 2. DELIVERY OF THE THING SOLD

ART. 1497
​ Traditio or tradition
-​ a mode of acquiring ownership
-​ intention is essential
​ Transfer of ownership
-​ The critical factor in all the different modes of effecting delivery which gives legal
effect to the act, is the actual intention of the creditor to deliver, and its
acceptance by the vendee.
​ Liability in case of loss
 -​ Whenthethingsubjectofthesale is placed in the control and possession of the
vendee or his agent, the delivery is complete and the vendee cannot avoid
liability in case the thing is subsequently lost without the fault of the vendor.
​ Right of vendor to claim payment
-​ delivery produces the obligation of the buyer to pay
ART. 1498
​ Execution of public instrument or document
-​ it shall be equivalent to actual delivery and buyer may use the document as
proof of his ownership of the property sold
-​ there is only a presumptive (not conclusive) delivery which can be rebutted by
evidence to the contrary.
​ Symbolic tradition
-​ the parties make use of a token symbol to represent the thing delivered.
ART. 1499
​ Traditio longa manu
-​ delivery takes place by the mere consent or agreement of the contracting parties
as when the vendor merely points to the thing sold which shall thereafter be at
the control and disposal of the vendee.
-​ this is qualified if the thing sold cannot be transferred to the vendee at the time of
sale
​ Traditio brevi manu
-​ vendee has already the possession of the thing sold by virtue of another title as
when the lessor sells the thing leased to the lessee. Instead of turning over the
thing to the vendor so that the latter may, in turn, deliver it, all these are
considered done by action of law.
ART. 1500
​ Traditio constitutum possessorium
-​ when the vendor continues in possession of the property sold not as owner but in
some other capacity, as for example, when the vendor stays as a tenant of the
vendee.
-​ opposite of longa manu
ART. 1501
​ Quasi-traditio
-​ delivery of rights of incorporeal property
​ Kinds of quasi-traditio
a.​ Execution of public instrument
-​ deed of sale
b.​ Placing title of ownership
-​ issuance of stock of certificate
c.​ by allowing the vendee to use his rights as new owner with the consent of the
vendor.
-​ stock has been sold, the new owner in the meantime can attend meetings
as proxy while transfer is being recorded in the stock transfer book
 In all forms of delivery, it is necessary that the act be coupled with the intention of
delivering the thing.

ART. 1502
​ Sale or return
-​ sale that depends on the discretion of the buyer, he has the option to return the
thing within the time fixed, on at a reasonable time.
-​ depends entirely on the will of the buyer
-​ If after the time, and he has not returned the thing, the sale becomes absolute
and he must pay the price is subject to a resolutory condition and requires an
express written agreement.
-​ buyer is already the owner so in case of loss he will be liable
​ Sale on trial or approval
-​ sale is subject to a suspensive condition and dependent on the quality of the
goods.
-​ depends on the quality of the goods
-​ the title remains to the seller until sale is absolute, which will happen if the buyer
approves of the goods within the time fixed or reasonable time or by failure to
give notice of dissatisfaction of the goods or returning it to the seller, or by doing
any other acts like selling it to 3rd person or mortgaging.
-​ Before the time expire he must give notice seller about his disapproval
-​ they may agree that a 3rd person can be the judge for the quality of the goods,
given he is in good faith.
ART. 1503
​ GENERAL RULE:
-​ delivery to the carrier is delivery to the buyer so ownership passes​
​ EXCEPTION
a.​ stipulation
b.​ Where right of possession or ownership of specific goods sold is reserved.
-​ seller or his agent is consignee
-​ under the bill of lading the goods are deliverable to seller or agent or their
order, the seller reserves ownership and the carrier is a bailee for him not
the buyer.
c.​ seller’s title is reserved only for the purpose of security.
-​ seller holds title as a security to ensure that the buyer pays
d.​ Seller retains bill of lading
-​ the bill of lading is retained by the seller or his agent, the seller thereby
retains a right to the possession of the goods as against the buyer.
ART. 1504
​ GENERAL RULE:
-​ Res perit domino ( risk of loss is borne by the owner at the time of loss)
​ EXCEPTION
-​ Where the seller reserves the ownership of the goods merely to secure the
performance by the buyer of his obligations under the contract, the ownership is
 considered transferred to the buyer who, therefore, assumes the risk from the
time of delivery
-​ Where actual delivery had been delayed through the fault of either the buyer or
seller, the goods are at the risk of the party at fault with respect to any loss which
might not have occurred but for such fault. In this case, the law punishes the
party at fault.
ART. 1505
​ GENERAL RULE:
-​ A person who is not the owner or is authorized to sell a thing, the buyer acquires
no better title than the seller had.
​ EXCEPTION:
a.​ where owner through his conduct, precluded from denying the seller’s authority
to sell (estoppel)
b.​ apparent owner is authorized by law to dispose the goods as if he were the rue
owner (agent)
c.​ Where the sale is sanctioned by statutory or judicial authority.
d.​ sale is made at merchant store (department store)
e.​ Where the seller subsequently acquires the title.
ART. 1506
​ Seller has a voidable title to the goods, the buyer acquires good title if:
a.​ before the title of the seller has been avoided
b.​ in good faith for value
c.​ without notice of the seller’s defect of title.
​ Basis for the rule
-​ where one of 2 innocent parties must suffer, he who placed the offender in a
position to do wrong must suffer.
ART. 1507 - ART. 1520

ART. 1521
​ Place of delivery
a.​ stipulation
b.​ no stipulation, determined by the usage of trade
c.​ seller’s place of business
d.​ seller’s residence
e.​ In case of specific goods, which to the knowledge of the parties at the time the
contract was made were in some other place
​ Time of delivery
a.​ stipulation
b.​ within a reasonable time
-​ a question of fact depending upon circumstances like the character of
goods, purpose, the ability of the seller to produce, distance and
transportation.
​ Hour of delivery
-​ within a reasonable time
​ Goods are in the possession of a third person
-​ the 3rd person must acknowledge that he holds the goods for the buyer
and not for the seller so he will not be liable to the buyer anymore.
​ Duty of seller to put goods deliverable condition
-​ seller bears expense, unless otherwise stipulated
ART. 1522
​ Quantity is less that agreed upon
a.​ Вuyer may reject the goods
b.​ Buyer may accept
-​ If with knowledge that the seller cannot perform, buyer will pay at CONTRACT
RATE or Agreed Price
-​ If he did not know, FAIR VALUE.
FAIR VALUE
-​ benefit that the buyer received from the goods
Quantity is more
a.​ may reject all if indivisible
b.​ may accept the goods agreed and reject the rest
c.​ may accept the whole, and pay at contract rate.
Mixed with goods of different Description
a.​ accept those in accordance with the contract
b.​ reject the rest if indivisible
ART. 1523
​ GENERAL RULE:
-​ If the seller is authorized or required to send the goods to the buyer, delivery of
the goods to the carrier constitutes delivery to the buyer.
​ EXCEPTION:
-​ Stipulation
​ Seller’s duty after delivery to carrier
-​ subject to special instructions of the buyer or any agreement
a.​ seller must make such a contract with the carrier on behalf of the buyer as
may be reasonable under circumstances. If seller did not, buyer may
decline general rule, and in case of lost or damages, seller is liable
b.​ seller must give notice regarding necessity to ensure goods
ART. 1524
​ Delivery, simultaneous with payment of price.
-​ vendor is not bound to make delivery if no period has been fixed and
vendee has not paid
-​ If the period is fixed, seller is bound to deliver even if there is no payment.
-​ Even if a period has been fixed for the payment of the price, the vendor is not
bound to deliver in case the vendee has lost the right to make use of the period
and still has not paid the price.
ART. 1525
​ Unpaid seller
 -​ one who has not been paid or tendered 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.
ART. 1526
​ Remedies or rights of an unpaid seller
a.​ a right of possessory lien
-​ right to retain ownership of the goods
b.​ a right to stop the goods in transitu
c.​ a right to resale
d.​ a right to rescind
e.​ a right for payment
ART. 1527
​ Possessory lien
-​ retain ownership of goods until payment or tender of the price
​ An unpaid seller can exercise the right to possessory lien:
a.​ Sale without stipulation as to credit
-​ the seller is entitled to the payment of the price at the time he delivers, he
always has lien upon the goods as long as he is unpaid.
b.​ Sold on credit
-​ If the buyer fails to pay after the expiration of the term, seller may
exercised the right
c.​ Buyer is insolvent
-​ If buyer becomes insolvent, seller may exercised lien even if the time of
payment has not arrive
ART. 1528
​ GENERAL RULE;
-​ If there is partial delivery, the seller may exercise lien on the remainder of what
has not been delivered.
​ EXCEPTION:
-​ The intent to make such waiver may be inferred from the circumstance.
ART. 1529
​ Unpaid seller loses his lien if:
a.​ Delivered to carrier, agent or baiter
b.​ Buyer or gent, has possession of the goods
c.​ by waiver
​ Revival of lien after delivery
a.​ if buyer refuses to receive the goods after they have been delivered to the carrier
b.​ if buyer returns the goods
ART. 1530
​ Right of seller to stop goods in transitu
-​ if he has parted with the goods and buyer becomes insolvent
​ 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 ti- tle, if any, issued by the
carrier or bailee
f.​ The seller must bear the Expenses Delivery Of The Goods after the exercise of
the right.
ART. 1531
​ Goods are in transit if:
a.​ after delivery to a carrier or other bailee and before the buyer or his agent takes
delivery of them; and
b.​ if the goods are rejected by the buyer, and the carrier or other bailee continues in
possession of them.
​ Goods are no longer in transit if:
a.​ After delivery to the buyer or his agent in that behalf;
b.​ If the buyer or his agent obtains possession of the goods at a point before the
destination originally fixed;
c.​ If the carrier or bailee acknowledges to hold the goods on behalf of the buyer;
and
d.​ If the carrier or bailee wrongfully refuses to deliver the goods to the buyer.
ART. 1532
​ Ways of exercising the right to stop
a.​ By taking actual possession of the goods
b.​ By giving notice of his claim to the carrier or bailee.
-​ If goods are covered by negotiable document, the carrier has no
obligation to redeliver the goods to the seller unless document is
surrendered.
ART. 1533
​ When resale is allowable
-​ if he has the right of lien ard stoppin
a.​ Goods are perishable in nature
b.​ Right is expressly reserved
c.​ Buyer is in delay of payment for unreasonable time
​ Effect of resale
a.​ Seller is not liable for an profit made, but if It is a loss, he can demand for
damages:
b.​ As against to the original buyer, new buyer has a good title to the goods
• Notice of resale is not essential, however prudent
•. Sale is required to exercise reasonable care.
• He cannot buy the goods directly or indirectly

ART. 1534
when the seller may rescind
 a.​ Seller has a right of lien and stopping goods
b.​ the right to rescind is expressly reserved in case the buyer is in default
c.​ buyer is in delay in the payment for unreasonable time
Effect of recession
-​ seller resumes ownership and will not be liable to the buyer, however buyer can
be liable for loses
​ Manner of recission
-​ by notice or other overt act showing an intention to rescind to the buyer
ART. 1535
​ GENERAL RULE:
-​ If buyer already sold goods to third person, it will not affect the right of the unpaid
seller, unless he consented or assented.
​ EXCEPTION:
-​ if there's a negotiable document, it will prevail against the right.
ART. 1536
​ the debtor losses right if.
a.​ becomes insolvent, unless given a security for the debt
b.​ Fails to furnish guaranties he promised
c.​ guarantee is impaired.
d.​ violates an undertaking in consideration of which the creditor agreed to the period
e.​ attempts to abscond or exit.
ART. 1537
-​ Vendor is obliged to deliver the accessions and accessories of the thing sold.
Right of vender to the fruits
-​ from the time the obligation to deliver it arises, upon the perfection of the COS
​ Accessions
-​ all things that are produced by the thing sold or its fruits, (earphone for CP, shee
in profit.)
Accessories
-​ all things necessary for functioning or is attached to the principal thing (key sa
house)
ART. 1538
In case of loss
a.​ without the fault of the debtor, obligation extinguishes
b.​ With the fault, must pay for damages ​
In case of deterioration
a.​ Without the fault, creditors bears impairment
b.​ With the fạult of debtor, creditor can rescind or demand fulfillment with
indemnification
In case of Improvement
a.​ Improve by its nature, improvement will benerst coditor (vendee).
b.​ At the expense of the debtor, he has the right con the usufruct or the benefits.
ART. 1539
ART. 1540
 -​ If the delivered goods is greater than what was agreed upon, buyer may accept the
agreed and reject the rest. He may also accept the whole but price is the same and must
pay at contract rate.
ART. 1541
​ The provisions of the two preceding articles shall apply to judicial sales.
ART. 1542
​ sale of real estate in lump sum
-​ whether the actual thing within the boundary that was agreed upon, is greater or
lesser, there shall no be price increase or decrease
-​ the vendor is bound to deliver the whole even if its greater, lf he fails to do so, he
shall suffer reduction in price, unless rescinded.
ART. 1543
-​ Action for rescission shall prescribe 6 months counted from the day of delivery.
ART. 1544
Requisites for Double Sale
a.​ two or more valid COS
b.​ 2 or more buyers who are at odds of rightful ownership of the object must have
conflict of interest
c.​ must pertain exactly at the same de eat
d.​ has the same seller.
Rules of Preference
MOVABLE PROPERTY
a.​ first possesor in good faith
IMMOVABLE PROPERTY
a.​ First registrant in good faith
b.​ first possessor in good faith
c.​ person who has the oldest title in good faith
PRIMUS TEMPORE, POTIOR JURE
-​ first in time, strogngest in right

CHAPTER 5: OBLIGATIONS OF VENDEE

ART. 1582
​ Principal obligations of vendee
1.​ Accept delivery
2.​ pay for the price
3.​ pay for expense if stipulated
ART. 1583
​ Delivery by installments
GEN RULE:
​ not bound to receive delivery of the goods in installments.
EFFECT IF BUYER ACCEPTS
1.​ if buyer accepts partial delivery, only pay for what is proportionate to what was delivered
2.​ if buyer
ART. 1584
​ Buyer rights to examine
GEN RULE
​ Buyer has reasonable oppurtunity
If buyer signs a waiver of the goods, seller is still liable given it is within a reasonable time
right of examination not absolute
-​ since it is on request
ART. 1885
​ Express acceptance
-​ written or oral acceptance
​ Implied Acceptance
-​ buyer does any act inconsistent with sellers ownership
-​ after a lapse of time, and buyer did not reject goods
ART. 1586
​ Buyer can always file for damages against seller incase of defects, except if stipulated
ART. 1587
​ Right to refuse
-​ buyer has right to refuse
-​ there is sufficient notification to seller that buyer refuses to accept goods
ART 1588
​ Refusal is not justified
-​ the effect is if there is delivery, title passes to buyer at the time of disposal to the
buyer, so any risk is borne by the buyer
ART. 1589
​ may delivery na but wala payment
vendee is liable for interest if
-​ interest is stiipulated
-​ for the fruits or income produced by the things
-​ if buyer is in default
ART. 1590
​ Real property
-​ buyer has the obligation to assess if the seller has the right to reansfer ownership
-​ buyer is required to check with the registry of deeds if who is the right owner of
the property, if the owner is not the occupant or the one in possession, buyer has
the obligation to check why(this action is the only allowed outside the
Buyer has the right to suspend payment if;
-​ buyer is disturbed in possession (pinapaalis ka sa property)
-​ buyer has well grounded fear that his possession will be disturbed later on (if may
nagfile)
​ Suspension not allowed
-​ vendor caused the di
ART. 1591
​ wala pang breach, but ginaanticipate na meron
-​ can rescind the sale as long as there is well grounded fear
ART. 1592
​ Automatic rescission
-​ there is non payment of price or expiration of credit date
a.​ must be stipulated

CHAPTER 6:

if there is the breach of contract of sale, the right of rescission can be exercised by the seller or
the buyer. for the buyer, if hgoods was not delivered, for seller if he was noyt paid.
Seller’s remedies
-​ payment of price with damages
-​ rescission with damages
Buyer’s remedies
-​ specific performance with damages
-​ rescission with damages
Remedies alternative, if you choose one, you cannot choose another

CHAPTER 7: EXTINGUISHMENT OF SALE

ART. 1600
​ Causes of extinguishment of sale
1.​ Common
-​ payment, loss on the thing, condonation, etc..
2.​ Special
-​ causes which are recognized by the law
3.​ Extra-special
-​ conventional and legal redemption

SUBSECTION 1. - CONVENTIONAL REDEMPTION

ART. 1601
​ Conventional Redemption/ PACTO DE RETRO
-​ 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 therefor and the necessary and useful expenses
made on the thing sold, and fulfills other stipulations which may have been
agreed upon
-​ getting back the property you already sold, and there is always stipulation that
the particular thing sold can be redeemed with a period of time
-​ time
-​ stipulated
-​ if none, 4 years
​ Pacto de Retro sale
-​ title or ownership of the property sold is immediately vested in the vendee a retro,
subject only to the resolutory condition of repurchase by the vendor a retro within
the stipulated period.
​ Nature of conventional redemption
a.​ purely contractual because it is created by virtue of an express contract
b.​ is an accidental stipulation
c.​ is a real right, because it binds 3rd persons
d.​ is potestative because it depends upon the will of the vendor
e.​ It is a resolutory condition because when Exercised ,the right of ownership
acquired by the vendee is extinguished.
f.​ a power or privilege that the vendor reserved for himself
g.​ reserved at the moment of the perfection of contract
h.​ The person entitled to exercise the right of redemption necessarily is the owner of
the property sold and not any third party.
i.​ It gives rise to reciprocal obligation that of returning the price of sale and other
expenses, on the part of the vendor, and that of delivering the property and
executing a deed of sale therefore, on the part of the vendee.
ART. 1602
​ Equitable Mortgage
-​ is one which lacks the proper formali- ties, form or words, or other requisites
prescribed by law for a mortgage, but shows the intention of the parties to make
the property subject of the contract as security for a debt and contains nothing
impossible or contrary to law.
-​ any other contract other than a contract of mortgage but their intention is to really
mortgage( contract of donation, but there is a loan, and within a period of time,
doner can reaquire the donation)
-​ entered into a contract to conceal the real intention and agreement isreally a
mortgage.
-​ the difference between a equitable and conventional is that, in a conventional
there is a stipulation to repurchase while in a equitable there is no stipulation
​ Contract shall be presumed to be an equitable mortgage:
​ Requisites;
1.​ that the parties entered into a contract denominated as a contract of sale with a
right of repurchase or purporting to be an absolute sale
2.​ and that their intention was to secure an existing debt by way of mortgage.
​ Six circumstances sufficient to presume
1.​ Price of the sale is unusually inadequate
2.​ Vendor remains in possession.
3.​ Period of redemption is extended after expiration
4.​ Purchaser retains part of the price
5.​ Vendor binds himself to pay taxes on the thing sold
6.​ The parties really intended an equitable mortgage
ART 1603
​ In case of doubt, a contract purporting to be a sale with right to repurchase shall be
construed as an equitable mortgage

ART 1604

​
ART. 1619
Legal Redemption
-​ does not need a specific stipulation
-​ Most common- foreclosure(chattel mortgage)
-​ loan was not paid, so it is sold in a public auction