Sales TSN - Final Coverageword

SALES TSN Atty.
Jazzy Sarona (3
RD
COVERAGE)
Compiled by: Arafol, Canada, Cervantes and Javier (ADDU College Of Law Class of 20!"
By: Madel Malone-Cervantes
CONSUMMATION STAGE
So we are now with the 3
rd
stage in a Contract of Sale
(CoS).
As we have emphasized last time, sa consummation
stage what you have is the parties exercising their
respective oligations. !or the seller to transfer, ased
on "#$%, the possession and deliver the ownership of
the su&ect matter and for the uyer to pay the price.
'ow let(s go speci)cally to the oligations of the seller.
*viously, nandyan na yong "#$%, diba+
ART. 145. ,y the contract of sale one of the
contracting parties oligates himself to transfer the
ownership of and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its
e-uivalent.
A contract of sale may e asolute or conditional.
("##$a)
,ut of course there are also other oligations of the
seller. .ememer, we are still dealing with a CoS. So, we
can still apply the provisions under *liCon.
*ne oligation of the seller, of course, he still has the
oligation is to preserve the su&ect matter (S/). 0hat is
under ""13.
ART. 11!". 2very person oliged to give something is
also oliged to ta3e care of it with the proper diligence
of a good father of a family, unless the law or the
stipulaton of the parties re-uires another standard of
care. ("45#a)
6i3ewise, if you rememer under ""1#, ""11 in your
contract, delivery of the fruits as well as its accessories.
ART. 11!4. 0he creditor has a right to the fruits of the
thing from the time the oligation to deliver it arises.
7owever, he shall ac-uire no real right over it until the
same has een delivered to him ("45$)
ART. 11!!. 0he oligation to give a determinate thing
includes that of delivering all its accessions and
accessories, even though they may not have een
mentioned. ("458a)
3
rd
, of course delivery of the S/ as provided in "#$% as
well as you can also see it under "#88.
ART. 14##. 0he ownership of the thing sold shall e
transferred to the vendee upon the actual or
constructive delivery thereof.
.ememer that what is involved in a CoS is a .2A6
oligation. So it is susceptile of speci)c performance.
Again, while a CoS is a consensual contract perfected y
mere consent it involves real oligations. .ememer
when you had olicon you must e ale to distinguished
9yung perfection of a contract is a real $ontra$t
perfected y mere delivery. ,ut it(s di:erent when we
say real o%l&'at&on. 7ere in a contract of sale we have
a consensual contract involving real oligations.
#
th
oligation of a seller is to warrant the S/. ;f you loo3
at the outline we will get to that with regard to
warranties and conditions.
And then lastly, with regards to the expenses and
executions and registrations of the thing sold the
general rule is that the seller ears the expenses
thereof.
'ow, where not going to dwell much on the preservation
the oligation to preserve and the oligation to deliver
the fruits and accessories. <e now go directly to the
oligation to delivery the su&ect matter.
Actual and Constructive Tradition/Delivery
<hy is it necessary for the su&ect matter to e
delivered, rememer ownership is transferred upon
actual or constructive delivery. 0hat is, as provided
under "#88.
'ow ta3e a loo3 at "#51, ownership of the su&ect
matter is ac-uired y the vendee from the moment it is
delivered to him in any of the ways speci)ed in Articles
"#58 and "$4".
ART. 14(!. 0he ownership of the thing sold is ac-uired
y the vendee from the moment it is delivered to him in
any of the ways speci)ed in Articles "#58 to "$4", or in
any other manner signifying an agreement that the
possession is transferred from the vendor to the
vendee.
ART. 14(#. 0he thing sold shall e understood as
delivered, when it is placed in the control and
possession of the vendee.
ART. 15)1. <ith respect to incorporeal property, the
provisions of the )rst paragraph of Article "#5% shall
govern. ;n any other case wherein said provisions are
not applicale, the placing of the titles of ownership in
the possession of the vendee or the use y the vendee
of his rights, with the vendor(s consent, shall e
understood as a delivery.
"#58, you have there actual delivery, physical delivery
of the thing sold. So that(s very easy to understand. ,ut
of course there are things, na even though gusto mo
man ng actual or physical delivery you cannot do so.
7ow will you deliver physically, a house or a parcel of
land+ Isa-isahin mo? Diba hindi.
<e have here constructive deliveries. Constructive
deliveries come in the form as provided in "#5%, "#55
as well as "$44.
ART. 14(. <hen the sale is made through a pulic
instrument, the execution thereof shall e e-uivalent to
the delivery of the thing which is the o&ect of the
contract, if from the deed the contrary does not appear
or cannot clearly e inferred.
<ith regard to movale property, its delivery may also
e made y the delivery of the 3eys of the place or
depository where it is stored or 3ept.
ART. 14((. 0he delivery of movale property may
li3ewise e made y the mere consent or agreement of
the contracting parties, if the thing sold cannot e
transferred to the possession of the vendee at the time
of the sale, or if the latter already had it in his
possession for any other reason.
ART. 15)). 0here may also e tradition constitutum
possessorium.
'ow with regards to the, when you say tradition that
refers to delivery ha. Again don(t forget that delivery or
the oligation to deliver is at consummation stage na,
does not a:ect the perfection of the contract.
;n other words, even though the S/ has already een
delivered to another person. 'o valid title can e
conveyed unless there is a valid contract.
<hen the sale is void or )ctitious, no valid title over the
S/ can e conveyed to the uyer even with delivery. So
again important pa rin na valid 9yong contract. <hen
the seller had no ownership. Also ta3e note, no
ownership over the S/ at the time of delivery, then no
valid title can pass in favor of the uyer. .ememer the
#age 1 of 33
SALES TSN Atty. Jazzy Sarona (3
RD
COVERAGE)
latin maxim, =nemo dat quod non habet > no one can
give that which he does not have.
So with regard to tradition or delivery as mentioned it
can e actual or constructive. 7owever ta3e note that
there is that CoS as provided in "#8%. As the parties
may stipulate that ownership shall not pass to the uyer
until he has fully paid.
;n other words, even if there was already delivery, as
long as the parties agreed that ownership will not e
transferred until it has een fully paid, then you only
have a contract to sell and no transfer of ownership.
<hen we tal3 aout delivery, it contemplates the
asolute giving up of the control and custody. 0a3e note,
control and custody of the property on the part of the
vendor and the assumption on the part of the vendee of
such control and custody. So control and custody from
the vendor, y virtue of delivery, is transferred to the
vendee.
0here is have to e delivery if and when the thing sold is
placed in the control and possession of the vendee.
.ememer, delivery or tradition produces natural
e:ects in law the most important of which is the
conveyance of ownership. ,ut this is without pre&udice
to the right of the seller to claim payment of the price.
;n other words, dini-liver mo na, kulang yong binayad
nang uyer you still have an action to compel the uyer
to pay the price.
!ailure of the uyer to ma3e good of the price does not
cause ownership to revert ac3 in the vendor, unless
the CoS is )rst rescinded. 0hat(s why you have
rescission. Again, when there has already een delivery,
hindi nakabayad, hindi mo pwedeng basta na lang
kunin at angkinin na ikaw ulit ang may-ari. ?ou have to
resort to rescission )rst as provided in ""5" or you can
compel the uyer to pay the unpaid price.
So "#58, tal3s aout actual or physical delivery. 'ow,
how aout constructive delivery+ <e have the execution
of a pulic instrument as provided in "#5%.
"#5% tal3s aout constructive delivery, execution of a
pulic instrument. ;n other words, a deed of sale which
has een duly notarized. 0hat is e-uivalent to delivery,
and when there is delivery, there is transfer of
ownership. 7ere, prior physical delivery or possession is
not legally re-uired since ownership and possession are
two entirely di:erent legal concept. 6et(s ta3e a loo3 at
the case of Santos vs. Santos. volunteer !ides"
SANTOS v. SANTOS
<as there a transfer of ownership in that case+ ,ut isn(t
it that there was this document that was, the deed of
sale was duly executed+ 7ow come we cannot "#5%
here, wherein execution of a pulic instrument is
e-uivalent to constructive delivery+
So again, don(t thin3 "#5% that there is execution of
pulic instrument, there is already constructive delivery.
Again aside from the fact we must ta3e into
consideration na merong valid sale, the delivery must
also e with intention to transfer the possession and
deliver ownership of the said thing. 'owhere in the civil
code provide execution of a deed of sale is a conclusive
presumption of delivery of possession. @resumptive
delivery can e negated y the failure of the vendee to
ta3e actual possession of the land or the continued
en&oyment of the possession y the vendor.
As to movales, in "#5% it also deals with delivery,
9yong second part ng "#5%. 0hat deals with delivery of
3eys or depository with regard to movales. And that is
sometimes 3nown as =traditio symbolica.A Symolic
tradition or symolic delivery.
'ow let us ta3e a loo3 at "#55 ecause it also deals with
delivery with regard to movales. #lassmate reads
provision"
"#5% madali lang 9yonB property S/ car you deliver the
3eys to the owner. <hat else, it tal3s aout li3e sac3s of
rice in a warehouse, you deliver the 3ey to the loc3 of
the warehouse so that ma3uha 9yong movales.
,ut "#55 tal3s aout two (C) types of constructive
delivery. ?ou have traditio longa manu and
traditio brevi manu. *ne thing you should )rst ta3e
note of, is that these C are not opposite of each other.
0hey are not opposite of each other.
What is a traditio longa manu? 2ssentially you
can interpret this as delivery y the extending of your
arms or long hand y pointing to the thing. 0his is what
is provided in "#55, delivery y consent of the parties if
S/ cannot e transferred to uyer at the time of the
sale. Car, tinuro mo, o3 sa(yo na yong 3otse dyan
pinaayos pa sa repair shop. So traditio longa manu, that
can still e considered as delivery. 0his is y consent or
agreement of the parties provided in "#55. 6onga manu,
if you try to interpret it, extending the arm.
'ow, as ; mentioned, brevi manu is not the opposite
of traditio longa manu. <hy+ 7ere, the second part sa
"#55, the uyer is already in possession of the S/
efore the sale.
<hat happens here+ 0he uyer, for example, is already
in possession of the cellphone. ,a3it nasa 3anya+ Dasi
hiniram nya. Suse-uently he decided to purchase it, he
paid the purchase price to the owner. Alangan naman
iali3 pa nya ang cellphone, oi ideliver mo yan sa a3in
ulit para ma>transfer sa a3in 9yong ownership. 0he
uyer is already in possession of that is considered
traditio revi manu. And therefore, delivery e-uals
transfer of ownership. 'ow let us loo3 at what happened
in the case of Ey vs. CA volunteer !adel #"
*+ vs. COURT O, A--EA.S
<as there delivery here of the tractor to the other
rother, <ilfredo+ So, that means there was a transfer
of ownership to him. <hat is the issue here with regard
to the possession of the tractor, which was still in 6ira(s
possession+ 7ow aout the issue with regard to the
chec3+ <ould that a:ect the constructive delivery here+
<hat you have here is a CoS etween the two rothers,
ut the tractor was not in possession of the owner. ;t
was in possession of the mortgagee, which was 6ira
!inance and ;nvestment Corp. 0his 6ira was the
mortgagee. So in other words, the tractor was mortgage
to secure the oligation of <ilfredo Ey 3ay 6ira. 'ow
rememer in a mortgage, in a mortgage, the mortgagee
is not considered as the owner of the property. Dasi nga
ang property is only to secure the oligation. So, the
right of ownership was not divested from <ilfredo Ey,
even if he defaulted on his oligation. .ememer
=pactum commissoriumA, di(a failure to pay will not
result to transfer of the collateral in favor of mortgagee.
So what we have in this case is constructive delivery.
<hile <ilfredo Ey was not in actual possession and
control of the su&ect tractor, his right of ownership was
not divested from him upon his default. 'either could it
e said that 6ira was the owner of the su&ect tractor,
ecause the mortgagee cannot ecome the owner or
convert or appropriate to himself the property
mortgaged ecause that would e =pactum
commissoriumA. And in fact here 6ira gave its consent
to the sale of the su&ect tractor.
'ow, with regard to the encashment of the chec3, that
will not a:ect the consummation of the sale. 0he
consummation of the sale depended upon the
encashment of the chec3 was untenale. Again, the
#age 2 of 33
RD
COVERAGE)
payment of the price is di:erent from the oligation to
deliver. 0he sale of the su&ect tractor was
consummated upon the execution of the pulic
instrument. And at this time constructive delivery was
already a:ected.
So that is with regard to movales, we have "#5%, "#55.
Another thing that we can also consider is "$"3, with
regard to negotiale documents of title. ;n our next
meeting we(ll have rief discussion sa documents of
title. 'ow, with the person to whom the negotiale title
has een negotiated ac-uires the right of the person to
whom delivery shall e maid y the terms of the
document.
So we have here already three (3) types of constructive
delivery.
'ow again rememer, revi manu is not the opposite of
longa manu ut what is the opposite of revi manu is
constituum possessorium. 0his is the opposite of
revi manu. Sa revi manu, the uyer is already in
possession of the property, so constructive delivery is
y traditio revi manu.
<hat happens in constituum possessorium+ 0hat
is what is provided in Article "$44. 0his is applicale sa
contract of lease, suse-uent to the sale. ;t also apply
not &ust movales ut as well as immovales. !or
example, 9yong cellphone 3anina. Danina si uyer
hiniram n(ya in possession, execution ng sale perfected,
delivery hindi na 3ailangan iali3 sa owner para iigay
sa 3anya. Ei(a+
<hat is constituum possessorium+ ; have the
cellphone, ; agree to sell it to you, ut you will let me
orrow it for a period of time and enter for example in a
contract of lease. So, what would happen there, again ;
will not deliver the phone to you and give ac3 to me so
; can orrow it. <hat will happen there is still delivery
y virtue of constituum possessorium, wherein the
original seller continues to e in possession of the S/
ut after the sale, hindi na s(ya owner ut lessor for
example. So that is the di:erence etween these four
(#).
0he other one is with regard to Article "$4",quasi
traditio, the delivery of rights, credits and incorporeal
property.
<hat will e an example here+ An example here would
e the certi)cates of stoc3. 0he certi)cates of stoc3 is
an evidence you eing a stoc3holder in a corporation.
,ut that is not really what you owned. <hat you own is
the right or interest over the corporation. 'ow, if you
want to sell that property then you deliver the shares of
stoc3s then there is delivery in the concept of -uasi
traditio. ?ou cannot deliver the interest as a stoc3holder
ecause that is an incorporeal right. ,ut what can you
deliver is the share of stoc3 or certi)cates of stoc3s
evidencing your right over the said corporation as a
stoc3holder. So that is -uasi traditio under "$4".
'ow "$4" can also e applied as to immovale. @lacing
the title or ownership in vendee(s possession with
vendors consent. @(wede siya incorporeal rights, p(wede
din siya with regard to immovale sa land. 'ow "#5%,
the one that we discussed earlier, again is also
applicale sa immovales. Still the pulic instrument
execution of the instrument, presumption is delivery,
unless the contrary appears.
;n case of immovale, ta3e note that when the sale is
made in pulic instrument, general rule, execution shall
e e-uivalent to the delivery of the thing which is the
o&ect of the contract. 2xception, when the intention of
the parties is contrary thereto. @rior physical delivery or
possession is not legally re-uired, since execution of the
deed is deemed e-uivalent to delivery. 7owever we
should ta3e into consideration some re-uirements. *ne
of this is provided in the case of Addison vs. !elix.
volunteer $ay"
A**ISON v. ,E.I/
7ow is this di:erent from the case of Ey+ ;n Ey, there
was a pulic instrument, a deed of sale, the su&ect
matter was in possession of a third person, ut in that
case delivery was upheld. 7ow come here, there was an
execution of the deed, pulic instrument, in possession
of a third person ut there was no delivery as
contemplated in this case. <hat(s the di:erence+ 7ow it
is di:erent from the Ey case+ 0he earlier cited case of
Ey. <hat ma3es the di:erence+ ,a3it dito hindi inupheld
ang delivery+
<hat(s the di:erence etween the case of Addison and
Ey, iyong impediment. Eoon sa case ng Ey, 3aya in
possession ang 6ira sa tractor is ecause of that
mortgage. Sa mortgage, walang transfer of ownership.
2ssentially may control pa talaga ang mortgagor, in fact
the mortgagee cannot prohiit the mortgagor from
selling the property ecause the mortgagor is still the
owner. Eito, while pareha sila there was execution of a
deed of sale in a pulic instrument and the property is
in possession of a third person, sa case ng Addison
meron 3asing impediment that would hinder 9yong
transfer of ownership. ;n order that this symolic
delivery of execution of pulic document produced the
e:ect of tradition, it is necessary that the vendor shall
have such control over the thing sold, that at the
moment of the sale its material delivery could have
een made. Eito hindi mangyari iyong material delivery
dahil may impediment.
Sa case ng Ey actually p(wede n(yang ma3uha sa
mortgagee, 3asi walang re-uirement sa law on
mortgage that, unless may agreement, the mortgagee
would e in possession. @ero ang important doon with
regard to mortgage, the mortgagee cannot prohiit the
mortgagor from selling the property. ,ecause the
mortgage does not transfer ownership its merely a
collateral or security of an oligation. 0he mere
execution of the instrument in the case of Addison was
not a ful)llment of the vendor(s oligation to deliver the
thing sold. 7ow aout the case of Eanguilan+ volunteer
%run&"
*AGUI.AN vs. IAC
;s there any re-uirement with regard to control as to
how long should the control remain after the execution
of the instrument or deed of sale+
So the same with the case of Addison, it is necessary
that the vendor shall have that such control over the
thing sold that at the moment of sale its material
delivery could have een made. Again don(t confuse
9yong control sa re-uirement sa perfection, sa
consummation stage na s(ya. inaudible someone
coughs" B confer as mention upon the purchaser the
ownership and the right of possession. 0he thing sold
must e placed in his control. <hen there is no
impediment whatever to present the thing sold tac3ing
into the tenancy of the purchaser y the sole will of the
vendor, symolic delivery through the execution of a
pulic instrument is suFcient. ,ut if, notwithstanding
the execution of the instrument the purchaser cannot
have the en&oyment and material tenancy of the thing
and ma3e use of it to himself or to another in his name,
ecause such tenancy and en&oyment are oppose y the
interposition of another will, then )ction yields to reality
and delivery has not een e:ected.
As you can see here 9yong control, the SC did not
specify or no law speci)es that control will remain for a
speci)c period of time after the execution of the deed of
sale. <hat you should consider is reasonale period.
Such control should remain within a reasonale period
#age 3 of 33
RD
COVERAGE)
after the execution of the instrument. ;f there is no
control, then there could e no delivery.
'ow what is ovious here in the cases with regard to
delivery+ ?ou must rememer the followingG
'o. ", the seller must have control over the thing. 0hat(s
very clear.
C
nd
, of course the uyer must e put in control over the
thing upon delivery. ;t(s useless 3ung si seller may
control, dineliver n(ya 3ay uyer, pero si uyer has no
control over the thing.
And of course as emphasized, there must e that
intention to deliver for the purpose of transferring
ownership. So ta3e note of thoseH
'ow of course it is still possile that y agreement of
the party, even if there has already een delivery or
even if in the asence of delivery the uyer, di pa na>
deliver sa 3anya, there is an agreement, that the uyer
will assume the ris3 of ownership or possession, p(wede
yon. *r for example sa contract to sell, there is delivery,
with no intention to transfer ownership, ut the uyer
assumes the ris3 of possession and ownership. 7ow
aout in the case of Chua+ <hat happened here+
volunteer #arissa"
C0UA vs. COURT O, A--EA.S
<hat do we have here a CoS or a contract to sell+ ,ut
there was already a deed of sale executed here etween
the parties+ ,ut isn(t it he already executed a contract
herein in Iuly "3+ So valid tender of payment is re-uired
for a perfection of CoS or contract to sell+
0here was a document here, two (C) deeds of asolute
sale. *ne covered the movale property, the other one
covered the immovale. 'ow ta3e note what is involved
here is a contract to sell. <hy was it important to
distinguish whether we have a contract to sell or a CoS
here+ ,ecause we said di(a sa CoS executed in a pulic
instrument it would constitute constructive delivery
which will transfer ownership. 7ere walang transfer of
ownership ecause what is involved is a contract to sell.
.ememer here that Chua cannot compel Jaldez Chuy
to register the property in the name of Chua ecause
that is not the oligation of the seller, general oligation
of the seller in a CoS.
Again if it was registered in the name of Chua, it does
not necessarily mean that ownership has een
transferred to Chua, ecause that title is only an
evidence of ownership, and ownership ta3es e:ect y
virtue of delivery. Dung walang delivery, 3ahit na
ipangalan pa yong property 3ay Chua, it would not y
itself transfer ownership to Chua. Again what is needed
is 9yong delivery, since we are aout immovale here,
most proaly through execution of a pulic instrument.
;n the asence thereof, there can e no transfer of
ownership. So please ta3e note of the case of Chua.
'ow we go to special rules on completeness of delivery.
<e have article "$C3, the rules on delivery to carrier.
classmate reads provision"
ART. 151". <here, in pursuance of a contract of sale,
the seller is authorized or re-uired to send the goods to
the uyer, delivery of the goods to a carrier, whether
named y the uyer or not, for the purpose of
transmission to the uyer is deemed to e a delivery of
the goods to the uyer, except in the cases provided for
in Article "$43, )rst, second and third paragraphs or
unless a contrary intent appears.
Knless otherwise authorized y the uyer, the seller
must ma3e such contract with the carrier on ehalf of
the uyer as may e reasonale, having regard to the
nature of the goods and the other circumstances of the
case. ;f the seller omit so to do, and the goods are lost
or damaged in course of transit, the uyer may decline
to treat the delivery to the carrier as a delivery to
himself, or may hold the seller responsile in damages.
Knless otherwise agreed, where goods are sent y the
seller to the uyer under circumstances in which the
seller 3nows or ought to 3now that it is usual to insure,
the seller must give such notice to the uyer as may
enale him to insure them during their transit, and, if
the seller fails to do so, the goods shall e deemed to e
at his ris3 during such transit.
"$C3 provides us with the rule on delivery to carrier.
Leneral rule is delivery to a carrier is e-uivalent to
delivery to the uyer, that(s the L., ut su&ect to
numer of exceptions, as to what type of agreement has
een entered into y the carrier as well as the uyer.
0here are certain types of arrangement such asG
'.(.). (free along type)
'.*.%. (free on oard) and
#.I.'. (cost, insurance and freight) 6et(s ta3e a loo3 at
the case of ,ehn /eyer. volunteer !onica"
BE0N ME+ER vs. +ANGCO
<hat do you mean y C.;.!. arrangement+ C.;.!. means,
cost, insurance and freight, ut what type of
arrangement do that mean+ <ith the C;! arrangement,
when is there delivery to the uyer+ <hy was it
important to determine whether or not there was
already delivery here in favor of the uyer+
C.;.!., !.*.,., !.A.S. !AS, free along type, the seller here
pays all the charges and is su&ect to it. ;n other words
no transfer of ownership until the goods are placed
alongside the vessel.
7ow aout !.*.,., free on oard, the seller shall ear all
expenses until the goods are delivered according as to
whether the goods are to e delivered, it maye at the
point of shipment or at the point of destination.
<hen you have .o.b. destination, if you(re going to
have the goods delivered from /anila to Eavao and
then it is through a carrier, for example, oat. So, f.o..
destination, what would happen here+ 0ransfer of
ownership would e, when it reaches the destination.
Euring this voyage here y the carrier, why is it
important to determine delivery+ ,ecause delivery
transfers ownership. And =res perit dominoA, owner
ears the loss.
So if it(s .o.b. shipping point, shipping point here is in
/anila. So if you have f.o.. shipping point, anything
that happens during the voyage that would result to the
loss or damaged to the goods, it would e the uyer
who would ear the loss. So again, why is it important to
determine whether there is delivery or not+ ,ecause of
transfer of ownership. Again if there(s a transfer of
ownership, then owner ears the loss. ,ut of course we
have to consider if meron pang other types of
arrangement etween the seller and the uyer.
So ta3e note of the case of ,ehn /eyer vs. ?angco
ecause it discuss the rules on delivery with regard to
carrier speci)cally 9yong c.i.f. 7ere the uyer, since
there is a reachB then he will not ear the loss. 7e can
resort to rescission ecause there is sustantial reach.
Donti na lang 9yong nadeliver sa 3anya.
Another thing that we should consider with regard to
delivery is the concept of sale on approval! trial or
satisaction as provided in "$4C. classmate reads
provision"
ART. 15)1. <hen goods are delivered to the uyer =on
sale or returnA to give the uyer an option to return the
goods instead of paying the price, the ownership passes
#age 4 of 33
RD
COVERAGE)
to the uyer on delivery, ut he may revest the
ownership in the seller y returning or tendering the
goods within the time )xed in the contract, or, if no time
has een )xed, within a reasonale time.
<hen goods are delivered to the uyer on approval or
on trial or on satisfaction, or other similar terms, the
ownership therein passes to the uyerG
(") <hen he signi)es his approval or acceptance to the
seller or does any other act adopting the transactionM
(C) ;f he does not signify his approval or acceptance to
the seller, ut retains the goods without giving notice of
re&ection, then if a time has een )xed for the return of
the goods, on the expiration of euch time, and, if no
time has een )xed, on the expiration of a reasonale
time. <hat is a reasonale time is a -uestion of fact.
0he concept of sale or return, sale on approval. 0hese
are special arrangement etween the uyer and the
seller and it must have een duly agreed upon y the
parties. <hat happens in sale or return+ 0he ownership
here passes to the uyer upon delivery, &ust li3e a
perfected CoS. 7owever, the uyer is given the right to
return the goods to the seller within which the
suse-uent return of the goods reverts the ownership
ac3 to the seller. ;n this case tradition as a mode of
ac-uiring ownership must e in conse-uence of a
contract.
So here seller return, nagsaot 3ayo, alright, ; will sell to
you this property on sale or return asis. Kpon delivery,
who owns the goods+ ;t would e the uyer, so uyer
ears the loss. ,ut he is given the right, li3e for
example, when you )nd the product not in accordance
with your li3eness, then you can return it to the seller.
Eapat 3laro 9yong agreement.
<hat is the period to return the "#+ !ixed, as agreed
upon y the parties or within a reasonale time. 7indi
naman pwede ginamit na n(ya, halos mauos na, doon
pa n(ya inali3. Again, ta3e note, )xed or within a
reasonale time the uyer may return the goods and
revest the ownership ac3 to the seller. ,ut again this
must e clearly agreed upon y oth parties. Dung
walang sale or return agreement then you cannot force
the seller to accept the delivery of the thing &ust
ecause you do not li3e it anymore. ?ou resort to
rescission ut not on the asis on sale or return.
'ow sale on approval! also $no%n as sale on
acceptance! sale on trial or sale on satisaction.
7ere there is delivery ut delivery of the thing to the
uyer does not transfer ownership since the delivery
was not for purposes of transferring ownership over the
property.
<hat would happen here+ 0here would e transfer of
ownership upon approval of the uyer. ;f he )nds the S/
to his satisfaction or to his li3eness, then it is only from
that time, from that approval, can there e delivery,
which should transfer ownership to the said uyer. 7ere,
while the uyer retains goods still su&ect to approval,
wala pang ownership si uyer, so it(s the seller who
ears the loss, unless they agree, na sige sa(yo muna
9yan pero 3ung ano ang mangyari i3aw ang ear ng loss.
Dung may ganon silang agreement, walang prolema.
As you have oserved with regard to contract, asta
mag>consent lang ang C parties, as a general rule, no
issue with regard to that.
So sale of approval does not transfer ownership upon
mere delivery, since delivery was not for purposes of
transferring ownership, since the prestation to e:ect the
meeting of the minds rise valid contract incument on
the uyer. Sale only happens upon approval or
acceptance or after, for example, trial period or upon
satisfaction. Again here, for the approvalB, time )xed
y the parties or within a reasonale period of time. ,ut
as ; have emphasized, for a sale on return or sale on
approval, don(t confuse one with the other. 0here must
e clear agreement to either or such e:ect. *therwise
Article "$4C cannot e invo3ed y either party to the
contract.
'ow another type of sale is the one provided in "#%",
sale by description or by sample. classmate reads
the provision"
ART. 141. ;n the contract of goods y description or y
sample, the contract may e rescinded if the ul3 of the
goods delivered do not correspond with the description
or the sample, and if the contract e y sample as well
as y description, it is not suFcient that the ul3 of
goods correspond with the sample if they do not also
correspond with the description.
0he uyer shall have a reasonale opportunity of
comparing the ul3 with the description or the sample.
<hat are the types of sale involve here. 0here are
actually are three (3). "ale by description, using your
imagination, i>descrie lang sa inyo ng seller, sige ilhin
3o yon, description lang. Second is, sale by sample!
may pina3ita sa(yo si seller and ased on that you agree
to enter into a CoS. ,ut what was shown to you is not
really what will e delivered to you. <hat you only saw
was the sample. And the other one, comination, sale
by description and sample.
So sale y sample, small -uantities B y the seller as a
fair specimen of the ul3, which is not present, and
there is no opportunity to examine the same and the
parties treated the sample as a standard of -uality and
that they contracted with reference to the sample, with
the understanding that the products to e delivered
would correspond with the sample. So here, the uyer is
given a reasonale opportunity to expect of the S/ has
een delivered is in accordance shown or to what has
een descrie. ;f what has een descrie or shown is
di:erent from what has een delivered, then the
remedy here on the part of the uyer is rescission.
Again ta3e note, sale y description, y sample, or y
description and sample.
<hat happen if what is delivered is in accordance with
the description as provided in the sales contract. 0he
uyer cannot refuse to pay the purchase price or the
alance of the purchase price, if it proves that the
machine cannot e use for the purposes for which he
ought, ecause, even if what was ought was not for
the purpose to which he intended to use it. Again what
was delivered was in accordance with the sample or the
description. Dasalanan na yon ng uyer, unless of
course, the uyer has shown or has indicated to the
seller the purpose for the said S/. ;n the asence
thereof, as long as what was delivered was in
conformity to the description or the sample, then the
uyer cannot refuse to pay the purchase price. 6et see
what happen in the case of 6a !uerza. volunteer $ethro"
.A ,UER2A vs. COURT O, A--EA.S
<as there delivery here+ 7ow was delivery made+ 7ow
was it placed in the control of 6a !uerza+ <as it
accepted y 6a !uerza+ So, the 1>month prescriptive
period, several trial run+ <hen will the 1>month period
egin to run+
7ere rememer you had several trial runs, which is
delivery is important ecause here, the action for
rescission, prescriptive period to )le an action for
rescission shall e arred after 1 months from delivery
of the thing sold. So you have to determine, when was
the conveyor delivered. 0here are several trial runs. ;n
other words, you can put it in the perspective that there
were installment, noh, when we are tal3ing aout
delivery in several installments you count the
#age 5 of 33
RD
COVERAGE)
prescriptive period from the last delivery of the S/. So
here Iuly "514. <hen they )led this case it was already
eyond, arred already after 1 months.
.ememer that the conveyor here was actually already
in the possession and control of 6a !uerza. <hy,
ecause it was already installed in their premises. 0he
failure of 6a !uerza to express categorically whether
they accepted or re&ected the conveyors does not
detract that the same were already actually in his
possession and control. Accordingly, that the same was
already actually in his possession and control.
Accordingly, already een delivered y the plainti:, the
date Iuly "514 and that the period prescrie in "$8"
had already egan to run.
Article "3%5, with regard to #>year prescriptive period
applies to contract generally, ut since "$8" is
applicale to sales in particular, then we have to apply
"$8", the 1>mos. delivery prescriptive period. So ta3e
note of this case of 6a !uerza.
'ow, with regard to sale y description, y sample or
acceptance, the uyer ta3e note, has the right to
inspect the S/ efore acceptance. 0his was provided in
"#%" and "$%#.
;n fact, in the case of 6a !uerza this is very clear, 6a
!uerza could have refuse to accept the thing
immediately, ut failed to act and therefore nag>
prescrie na 9yong 3anilang right to -uestion the
delivery. 7owever, this right to inspect is su&ect to
exception when the carrier delivers cash on
deliveryNcollect on delivery (C*E). So you have there
Article "$%#. Again, we must give the uyer the right to
inspect efore acceptance, as a L..
"ale per unit price or number
7ow aout the case of immovales, you have to
consider a land, a parcel of land is the S/ in a CoS. 0he
parcel of land may e sold per unit or y numer, li3e
for example 3,444 per s- m, or it can e sold as a lump
sum, for this property covered y this title, the purchase
price is this much.
So you have Articles "$35 and "$#4 with regard to
immovales, which are sold per unit or numer. So
example, 3,444 per s- m parcel of land. ;n a unit price
sale, the statement of the area of immovale is not
conclusive and the price may e reduced or increase,
depending on the area actually deliver. So again, if your
agreement etween the seller and the uyer is per unit,
3,444 per s- m. Dahit for example sa contract ilagay
ninyo 3,444 per s- m, sa "44 s- m. 7ow much would
that e+ 344 thousand, tama+ Ei 3ayo sure+ So, "44 s-
m x 3,444, so 344 thousand.
;f upon delivery what was delivered is less than "44
s- m, if the vendor delivers less than the area agreed
upon, the vendee may oliged the vendor to deliver all
that is stated in the contract 9yong "44 s- m or demand
for the proportionate reduction of the purchase price.
<hat was deliver is only 54 s- m, then multiply it y the
purchase price per unit which is 3,444 per unit. 7ow
much+ 54 s- m x 3,444 O C843
<hat if it is more than the area stipulated in the
contract+ Agreement, "44 s- m. <hat was delivered is
""4 s- m. 0he vendee has the option to accept only
amount agreed upon or to accept the whole area,
provided he pays the additional area at the contract
sale. ;n other words, 9yong "4 additional area 3,444 per
s- m, mag>add si vendee.
0a3e note ha, in this case, the vendee may resort to
rescission if the di:erence is more than "N"4 of what
was agreed upon etween the parties.
Also ta3e note that if is more than, what was delivered
is more than what was agreed upon, the vendee cannot
withdraw from the sale. Ang choice n(ya is, to deliver
what was agreed upon, or to deliver everything ut the
vendee will have to pay the additional price.
&ump "um "ale
Ei:erentiate it from Article "$#C, where the property is
sold for a lump sum. ;n a lump sum sale when the land
delivered to the uyer is exactly as that descried and
covered within the oundaries designated, covered y
title numer. 0he di:erence in actual area would not
authorize the uyer to rescind the contract, ecause the
seller has complied with delivering S/ agreed upon,
9yong covered sa title. 'ow, this true when evidence
shows that the parties never gave importance to the
area of the land in )xing the price.
7owever, if it turns out that it was made 3nown to the
seller, na kung hindi ganito kalaki ang parcel of land,
li3e for example, the example, ; can give you is with
9yong mag>franchise ka ng gasoline station, ; thin3 they
have speci)c area and you(re going to purchase this
property and you inform the seller you are going to use
it as a gasoline station, that(s why you need this much
of land. ;f it turns out that yong 0C0 not speci)c as to
agreement as to the price is not to per s- m ut as to
the property itself. ,ut since your intention was made
3nown to the seller, if there is a discrepancy which
would result na hindi mo makuha yong franchise kasi
hindi s+ya e-uivalent to what is re-uired, then you can
as3 for rescission, otherwise, hindi p+wede. Again, show
your intention in a lump sum sale so that you can
-uestion if there is di:erence as to the -uantity of the
parcel of property.
7owever ta3e note, maye you(ve seen this in a deed of
asolute sale, when sold in gross or with a description
=more or lessA, it covers only reasonale excess or
de)ciency. So ta3e note, reasonale excess or
de)ciency will not a:ect a sale in lump sum unless of
course ali3 3ayo doon sa intention of the parties.
'o% about the place o delivery o "#? Article
"$C", as provided or agreed upon y the parties. *r,
3ung walang agreement, seller(s place of usiness or
residence.
;f you are tal3ing aout movable goods, at the time
where the speci)c goods are located, or place at the
time of the perfection of contract. 0his is similar to the
L. in contracts.
Double "ales
<e will start with doule sales (ES). @lease ta3e note,
ES is a very important topic in sales. ;f ever this would
e as3, if salew would e as3, the )rst thing that would
proaly e as3 is really doule sales. And in practice
magamit itong ES. So you have "$##. @lease read
Article "$## #lassmate reads provision"
ART. 1544. ;f the same thing should have een sold to
di:erent vendees, the ownership shall e transferred to
the person who may have )rst ta3en possession thereof
in good faith, if it should e movale property.
Should it e immovale property, the ownership shall
elong to the person ac-uiring it who in good faith )rst
recorded it in the .egistry of @roperty.
Should there e no inscription, the ownership shall
pertain to the person who in good faith was )rst in the
possessionM and in the asence thereof, to the person
who presents the oldest title, provided there is good
faith.
,efore you apply "$##, ma3e sure the following
()*+,",T)" are presentG
#age 6 of 33
RD
COVERAGE)
!irst, there must e two or more sales which are valid.
So again, important pa rin 9yon, so the C sales here
must e valid.
Second, these two or more sales must pertain exactly to
the same S/. Again, exactly the same S/.
0hird, the uyers must represent conPicting interest.
<hat do we mean y that+ ;f it turns out that the C
nd

uyer is an agent of the "
st
one, then there is no ES,
there is only " sale, in favor of the "
st
uyer.
!ourth, and of course the two or more uyers must have
ought from the very same seller.
Alright, now you apply "$## and we can summarize it as
follows, separate )rst when it involves personal
property/movables-
Who has a better right? 0he one who )rst ta3es
possession in good faith (L!). Eon(t( forget, in L!.
/adali lang ang personal property, )rst ta3es
possession in L!. Saan nag3a3a>prolema usually+ Saan
maraming 3aso+
Sa real property/immovables. <hen there is a D" o
a real property %ho has a better right?
!irst, tingnan ninyo who )rst registred the sale in L!.
Again, who )rst registered the sale in L!.
;f not one of the sales is registered, then ta3e a loo3 at
who has )rst possession of the immovale or the real
property, again in L!.
Dung wala naregister either of the uyers and walang in
possession of the property, then who has the oldest title
in L!.
0hat is the summary of "$##. @ersonal property, )rst
ta3es the possession in L!. .eal property, unang
tingnan, again hierarchy ito ha, unang tingnan, )rst
registered in L!, 3ung wala na>register, )rst in
possession in L!, 3ung walang registration or walang in
possession, oldest title in L!.
What do %e mean by oldest title? )ino yong unang
nag-perfection of CoS.
Eo not apply this "$## if not all elements on doule sale
are present, alright.
'ow, registration sa real property. <hat do we mean y
this+ 0his is the actual recording or su&ecting the
property under the 0orrens System. A deed of sale is
considered registered from the moment it is entered or
recorded in the entry or the oo3 of .egister of Eeeds.
@ossession, of course, actual or constructive possession.
?ou relate this with our discussion regarding delivery.
Actual or constructive, which re-uires control and
custody.
0itle relates to as a result of the sale and not any title or
mode of ac-uiring property. <hat do we mean y that+
Dung ang isa may title ecause of prescription,
possession for lapse of time, then you cannot apply
"$##.
;(ve emphasized that the one in possession, the one
who registered the sale must e in L!. What do %e
mean by good aith ./01? @urchaser in L! or
purchaser for value. *ne who uys the property of
another without notice that some other person has a
right to or interest in such property and pays a full and
fair price for the same. At the time of such purchase or
efore he has notice of the claim or interest of some
other person in the property.
*n the other hand, a person in bad aith .20) is a
person who uys the land which he 3nows has already
een promised to another. Since this involves fraud, this
must e alleged and proved.
'ow, if you loo3 at "$##, dali lang, simple lang. ,ut
what ma3es it complicated, in all other types, is how
you apply it. ,ut how is it applied+ 6et(s ta3e a loo3 at
the case of Coronel. Any volunteer+ <ala+ Stop na 3ayo
doon+ ,a3it+ @ag aralan n(yo ang ES. <e will have a
recitation on <ednesday.
By: 3r&st&ne C4an 5av&er
,efore we apply Art&$le1544 ta3e note of the
re-uisitesG
". ;nvolve C or more sales which are JA6;E
C. 0hese sales must pertain to the very
same su&ect matter
3. ,uyers must represent C*'!6;C0;'L
interest
#. And that they ought from the very
same seller
Summary of the articleG <ho has the etter rightB
;f what is involved is personal property Q the one
who has possession in good faith
;f real property
R <ho )rst registered in good faith, if none of
them registered then
R !irst in possession in good faithM if neither of
them then
R 6oo3 at the oldest title in good faith.
0he provision of doule sales presumes title or
ownership to pass to the )rst uyer however we have to
apply "$## when we tal3 aout doule sale (Sen toto,
ut ; don(t get it) so it(s very important that we discuss
this in the cases that we haveG
CORONE. vs. CA
0he "
st
contract which was entitled =.eceipt of Eown
@aymentA was executed on Ian. "5%$. 0he C
nd
contract
was a =Eeed of Asolute SaleA.
Can we apply "$##+ <hat is the rule+ <ere all the
re-uisites present regarding these C contracts for "$##
to apply+ 'o, ecause the "
st
re-uisite is that the C
contracts are valid contracts of sale. ?es oth were
valid, ut the "
st
was &ust a conditional contract of sale
while the C
nd
was perfected.
Can we say that the "
st
contract was a contract to sell+
'o, ecause there was no reservation of ownership.
As clearly orne out y the evidence in this case,
petitioner /aanag could not have in L!, registered the
sale entered into on !eruary "%, "5%$ ecause as early
as !eruary CC, "5%$, a notice of lis pendens had een
annotated on the 0C0 in the names of petitioners,
whereas petitioner /aanag registered the said sale
sometime in April, "5%$. At the time of registration,
therefore, petitioner /aanag 3new that the same
property had already een previously sold to private
respondents, or, at least, she was charged with
3nowledge that a previous uyer is claiming title to the
same property. @etitioner /aanag cannot close her
eyes to the defect in petitioners( title to the property at
the time of the registration of the property.
#age of 33
RD
COVERAGE)
<as the "
st
sale registered+ '*. 7ow aout the C
nd
was
it registered y /aanag+ ?es. ;n other words she was
already in ,!.
So here, ta3e note this case emphasized again the
distinction etween contract to sell and a contract of
sale. <hy is that important+ ,ecause we can only apply
"$## in a contracts of sale. 7ere, we were ale to
determine that what was involved was not contract to
sell ut a conditional contract of sale. Kpon ful)llment of
suspensive condition, the sale ecomes asolute and
this will de)nitely a:ect the seller(s title thereto. ;n a
conditional contract of sale, upon happening of a
condition there can e automatic transfer to uyer if
there(s already een previous delivery.
7ere the agreement would not have een a contract to
sell ecause the sellers made no express reservation of
ownership or title to the su&ect parcel of land. 0hus,
there is doule sale.
0he record of the case shows that the deed of asolute
sale dated Arpil "5%$, the one with /aanag was
registered on Iune $, "5%$ giving rise to a new 0C0
under his name. 7owever ta3e note that 3nowledge y
the "
st
uyer of the C
nd
sale cannot defeat the "
st
uyer(s
right except when the C
nd
uyer "
st
registers in L! the
C
nd
sale. )abihin dito ni /aanag, when ; registered the
sale the "
st
uyer already had notice that ; ought the
property. Can it defeat the "
st
uyer(s right+ Leneral
rule, '*, K'62SS the C
nd
uyer registers the same in L!.
;n the case of doule sale what )nds relevance or
materiality is not whether the C
nd
uyer was uyer in L!
ut whether the C
nd
uyer registered the same in L!. ;n
other words, she registered the same without
3nowledge of any defect in the title of the property sold.
7ere, /aanag could not have een in L! when he
registered in Iune ecause, a notice of lis pendens was
annotated as early as !e. CC. At the time of
registeration, /aanag already 3new or at least charged
with the 3nowledge that the property was previously
sold to private respondents, that the previous uyers
are claiming title to the same property. ;f a vendee of a
doule sale, registers that sale after he has ac-uired
previous sale of the same property to a 3
rd
person or
another person, the registration would constitute a
registration in ,! and would not confer any rights.
0a3e note, with regard to C
nd
uyer, the C
nd
uyer must
e in L! from the perfection of the sale to the
registration so that he can have a etter right over the
"
st
uyer. 2ssentially what defeats the right of the "
st

uyer is the registration of L! y the C
nd
uyer. ;f there
is no registration, then possession in L! y the C
nd

uyer. 'ow if no possession and no registration then
oldest title in L!, and in that case, if we apply =oldest
titleA it will e the "
st
uyer na. Aryt. <e have another
caseG
SAN .OREN2O *E6E.O-MENT COR-. vs. CA
6u spouses purportedly sol C parcels of land to
,aasanta. 0he latter gave a downpayent and several
other payments totaling to Ch 3. Suse-uently ,aasanta
wrote a letter to @acita 6u to demand execution of )nal
deed of sale in his favor so that he could e:ect full
payment of purchase price. 7e also noti)ed the spouses
aout having received information that the spouses sold
the same properties to another without his 3nowledge
and consent so on that same letter he demanded that
the C
nd
sale e cancelled.
'ow @acita 6u wrote a reply>letter to ,aasanta which
ac3nowledged that they were to sell it ut ,aasanta
ac3ed out ecause they did not agree to lower the
price which is @"4Ns-uare meter from p"$. @acita 6u
even added that they returned $43.
'ow ,aasanta )led a complaint for speci)c
performance and damages against the spouses and San
6orenzo )led a motion to intervene alleging that they
had legal interest in the S/ under litigation ecause the
C parcels of land were sold to them in an Asolute Eeed
of Sale and after such, they immediately too3
possession and asserted their rights are true owners as
opposed to ,aasanta who never exercised acts of
ownership.
So who has the etter right+
<hat was the "
st
contract entereted into+ ;t was the "
with aasanta on Aug "5%8. Suse-uently was with
San 6orenzo 7owever, we cannot apply "$## ecause
the contract entered into was a Contract to Sell. 0he "
st

re-uisite to apply "$## is not present. 0here are no =C
valid Contracts of SaleA. ;n this case, the contract
entered into y ,aasanta with the spouses was a
Contract to Sell while San 6orenzo has a Contract of
Sale.
So what rule should we apply+ So it is primus
tempore! potior 3ure or 78rst &n t&9e: stron'er &n
r&'4t;. 'ow who was "
st
in time and has stronger right+
SC said San 6orenzo. 0he asis was not "$##. <hile it
can e said that San 6orenzo registered after 3nowledge
of ,aasanta(s claim, again we do not apply "$##. So "
st
in time, ecause as early as !eruary "", "5%5, spouses
6u already executed an *ption 0o ,uy in favor of San
6orenzo. After latter paid more than T of purchase
price, a Eeed of Asolute Sale was already executed.
'ow when oth deeds were executed, San 6orenzo had
no 3nowledge of the prior transaction y spouses with
,aasanta. !rom the time of execution of the "
st
deed
upto the moment of delivery and transferG how was it
delivered+ @ulic instrument and possession Q so San
6orenzo has acted in L!, and the lis pendens y
,aasanta has no e:ect at all in the consummated sale
with spouses and San 6orenzo.
Again, even if San 6orenzo already had 3nowledge of
,aasanta(s claim when it registered, "$## was not
apply ecause there was no valid contract of sale
etween ,aasanta and the sellers 6u.
So =)rst in time, stronger in rightA was applied, )rst in
time in this case was to whom there was delivery.
.ememer, what was with ,aasanta was merely a
receipt. 0herefore he did not ac-uire ownership with
that and he was not ale to adduce any other evidence
to show actual nor constructive delivery. 0hus, it clearly
shows na contract to sell lang ang kanilang agreement.
*E .EON vs. ONG
0he properties were mortgage with .S6A; (.eal
Savings), and they executed Eeed of Asolute Sale with
Assumption of /ortgage. @ursuant to this, respondent
paid partial payment and petitioners handed the 3eys to
the properties and wrote letter to .eal Savings
authorizing it to receive payment from respondents and
release Certi)cate of 0itle. .espondents li3ewise
informed .eal Savings of their agreement that she(ll
assume outstanding loan of petitioners. 'ow .eal
Savings re-uired her to undergo credit investigation.
After /arch "4, "553 respondents learned that
petitioners again sold the same property to one Jilloria,
and changed the loc3s rendering he gave her useless.
So respondent went to .eal Savings to in-uire regarding
the C; ut was informed that petitioner already paid the
amount due and too3 ac3 the Certi)cate of 0itle. So
respondents )led complaint for speci)c performance,
nullity of C
nd
sale and damages.
@etitioner(s contentionG Since the transaction was
su&ect to a condition, condition that .eal Savings
#age ! of 33
RD
COVERAGE)
should approve the Assumption of /ortgage, hence they
entered into a Contract to Sell. ;n as much as
respondents applied loan, the condition did not arise
and conse-uently the Sale was not perfected therefore
he can freely dispose it.
.0CG Sale was never perfected. CAG Contract executed
did not impose condition and they entered into a
Contract of Sale. 7ence, petitioners no longer owned
the properties when they sold it to Jilloria.
So we have here C contracts. 0he "
st
was executed
/arch "553 in favor with .espondent *ng. 0he C
nd
was
after that, no date, in favor of Jilloria.
0he "
st
deed executed stated that petitioner sold the
property to respondent in a manner asolute and
irrevocale for the sum of @"." /. 'othing implied that
there was condition imposed or that petitioner reserved
ownership until full payment of purchase price. Also,
there was constructive ful)llment or transfer of
ownership. 0hus we can apply "$##. So who has etter
right+ *ngH <hat ruled was applied+ <hen neither
uyer registered with .egister of Eeeds, the one who
too3 prior possession shall e the one who has etter
right. ;t was *ng who has possession "
st
.
So far, loo3 at the re-uisites )rsts. 'ow careful, loo3 at
the deeds. 'ow in this case, in fact there was turn over
of the 3eys and there was totality of petioner(s acts
indication that there was -uali)ed delivery and transfer
of ownership to *ng. 'o issue with the sale in favor of
Jilloria it was a Contract of Sale as well. Since we have
C sales, we apply the rules in Eoule Sale.
'ow efore we go to other case let(s go to scenariosG
A sold in favor , Septemer "$, C4"3. 0he same
parcel of land was sold y A to C Septemer 34,
C4"3. <hat happens if today *ctoer C, "
st
uyer ,
registers the sale ut he already had 3nowledge
that it was sold to , last 34
th
. So who has etter
right+
Still ,H .ememer the re-uirement 9L! at time of
sale until registration( is only with regard to the C
nd

uyer. 7ere why will you ta3e it against , eh &a na
ang nauna talaga nag>purchase ng property. So
registration with 3nowledge of SK,S2UK2'0 sale,
such registration in L! will result to etter right in
favor of him, "
st
uyer.
Again if we tal3 aout 93nowledge of sale(, it is
3nowledge of @.;*. sale to e considered =,AE
!A;07A. ,uha+ Aryt.
<hat happens if instead of ,, it was C who
registered the sale today *ctoer C, with 3nowledge
of sale in favor of ,+ So who has etter right, still ,.
*viously C is in ,!. C had 3nowledge of =priorA sale
upon registration hence, ,!.
-AGA*UAN vs. S-OUSES OCUMA
After owner Cleto(s death widow .uperta Asuncion as
sole heir and new owner of the entire tract sold the
same to 2ugenia .eyes with 0C0 in the latter(s name. ,y
'ov. "51" .eyes executed a unilateral Eeed of Sale
where she sold the northern portion to *cuma sps. for
@",$44.44 and the southern portion to Agaton @agaduan
for @$44.44
*n Iune "51C .eyes executed another deed of sale, this
time the 2'0;.2 parcel of land including the southern
portion to *cuma sps. thus a new 0C0 was issued in
favor of the *CK/A sps.
*n Iune "5%5 *cuma sps. sudivided the land into C lots
which resulted to issuance of C di:erent 0C0s.
,y Iuly "5%5 @etitioners @agaduan instituted complaint
for re>conveyance of the southern portion, with
damages.
.0C favored petitioners.
CA however reversed the decision and ruled that while
the registration of the southern portion in the name of
*CK/A sps. had created an implied trust in favor of
Agaton @agaduan, petitioners, however, failed to show
that they had ta3en possession of the said portion.
7ence, the appellate court concluded that prescription
had set in, therey precluding petitioners( recovery of
the disputed portion.
So there was C valid Contract of Sale.
;n this case there was a "
st
sale y .2?2S to ALA0*'
@ALAEKA' and a C
nd
sale y .2?2S to *CK/A sps. !or a
C
nd
uyer li3e the *cuma sps. to successfully invo3e the
C
nd
paragraph of Article "$## of the Civil Code, it must
possess L! from the time of the sale in its favor until
the registration of the same. 0hey sorely failed to meet
this re-uirement of L! since they had actual 3nowledge
of .eye( prior sale of the southern portion property to
the petitioners, a fact antithetical to good faith.
0his cannot e denied since in the SA/2 unilateral Eeed
of Sale that .eyes sold them the northern portion to
*uma sps. and southern portion to @agaduan. 0hus the
suse-uent 0C0 to the extent that it a:ects the
@agaduan(s portion conferred no etter right that the
registration which was the source of the authority to
issue the said title. Dnowledge gained y respondents of
the )rst sale defeats their rights even if they were )rst
to register the second sale. 3no<led'e o= t4e 8rst
sale %la$>ens t4&s ?r&or re'&strat&on <&t4 %ad
=a&t4. G, 9@st $on$@r <&t4 t4e re'&strat&on.
T4ere=ore: %e$a@se t4e re'&strat&on %y t4e
res?ondents <as &n B,: &t a9o@nted to no
re'&strat&on at all.
So the etter right elongs to @agaduan in relation to
the southern portion.
So again, L! in C
nd
uyerG Ac-uisition of property, in
other words at the time it was executed until the time of
registration, C
nd
uyer must e in L!. Eistinguish that
with re-uirement with regard to "
st
uyerG So when "
st

uyer registered in his name and he has 3nowledge of
suse-uent sale, that would not men that he is already
in ,! ecause again what is important here is
=3nowledge of @.;*. saleA which will lac3en the
registration and ma3e such registration in !,. So again
when we say L! must concur with registration, it is
applicale only to the C
nd
uyer. 'ow we also have the
case ofG
CARBONE.. vs. COURT O, A--EA.S
So here, the C contracts of sale was in favor of Caronell
and ;nfante. ;n fact when Caronell annotated adverse
claim was aware of suse-uent sale, again that is '*0
e-uivalent of ,!. 'ow when ;nfante registered the sale,
she already had 3nowledge of previous or @.;*. sale
therefore even with such registration, Caronell has
etter right ecause ;nfante(s registration was made in
,!.
So, loo3ing at the cases and Art. "$##, again this is
simple. 0a3e note of the nuances as mentioned in the
cases. <e cannot apply it in Contracts to Sell ut we
have seen that it is applicale to Conditional Contracts
of Sale.
#age " of 33
RD
COVERAGE)
'ow with regard with L!N,!, this is the usual issue in
determining "$##. ;t is important to note that L!N,!,
how+ -ingnan kaninong L! ang gina>determine, whether
it(s with "
st
of C
nd
uyer. Also ta3e note, ,! will only
result if it was caused y 3nowledge of =priorA sale.
Again as ; emphasized last time, this is a very important
provision. ;t will most li3ely e as3ed in the ar (yayH)
and also important in practice ito yung maraming issues
noh you will most li3ely encounter this. Ksually ecause
the "
st
sale was not registered.
OB.IGATIONS O, T0E BU+ER0he C main oligations
under Art&$le 151:
". 0he vendee is ound to accept delivery
C. @ay the price of the thing sold at the
time and place stipulated in the contract
Another thing that we may also notice, another oli as
we go along is to
". @ay expenses with regard to delivery.
Art. 151. 0he vendee is ound to accept delivery and
to pay the price of the thing sold at the time and place
stipulated in the contract.
;f the time and place should not have een stipulated,
the payment must e made at the time and place of the
delivery of the thing sold. ("$44a)'ow Article "$%C C
nd

paragraph says if time and place should not have een
stipulated, the agreement must e made at the time
and place of delivery of the thing sold.
0a3e note, unless the parties of the sale agreed to the
payment of purchase price to any other party or 3
rd

person, then payment should e made to the seller for it
to e e:ective. 0his is in accordance with Art&$le 114)
under your *liCon which provides that payment shall
e made to the person in whose favor the oligation has
een constituted or his successors>in>interest or any
person authorized.
;f you will pay, pagpunta mo sa bahay wala si seller eh
ayoko ng bumalik kasi magastos kapy hago iniwan mo
sa kapitbahaypero hindi naman ibinigay dun kay seller.
Can the seller compel you to pay the purchase price+
?es ecause that was not a valid payment, the one to
the neighor. (ng problema mo habulin mo yung
kapitabahay. ,ut you cannot refuse to pay the seller as
you had not made valid payment yet.
.ememer that a CoS is a reciprocal contract as we(ve
discussed, so a vendor is not re-uired to deliver su&ect
matter until the price is paid nor the vendee to pay the
price efore the S/ is delivered to him. So general rule
it is reciprocal noh, delivery, bayad ka again sabi natin
noh reciprocal, if the other party is ready to comply with
oli and the other is not then rescission can e resorted
to.
.elate this to Art&$le 1514.
Art. 1514. 0he vendor shall not e ound to deliver the
thing sold, if the vendee has not paid him the price, or if
no period for the payment has een )xed in the
contract. ("#11)Jendor shall not e ound to deliver the
thing sold if the vendee has not paid him the price or if
no period to pay has een )xed in the contract. ;f
stipulated, the vendee is ound to accept delivery and
to pay the price in the place designated. ;f there is no
stipulation as to the time and place of payment the
vendee is ound to pay at the time and place of
deliveryM And in the asence of stipulation as to the
place of delivery, you apply Art&$le 1151.
Art. "C$". @ayment shall e made in the place
designated in the oligation.
0here eing no express stipulation and if the
underta3ing is to deliver a determinate thing, the
payment shall e made wherever the thing might e at
the moment the oligation was constituted.
;n any other case the place of payment shall e the
domicile of the detor.
;f the detor changes his domicile in ad faith or after
he has incurred in delay, the additional expenses shall
e orne y him.
0hese provisions are without pre&udice to venue under
the .ules of Court. (""8"a)@ayment shall e made in
the place designated in the oligation there eing no
express stipulation and if the underta3ing is to deliver a
determinate thing, payment shall e made wherever
that thing might e at the moment the oli was
constituted. ;n any other case, place of payment shall
e the domicile of the detor.
'ow if only the time of delivery of the thing sold has
een )xed in the contract, the vendee is re-uired to pay
even if efore the thing is delivered to him. 0his is with
regard to Conditional Sales.
'ow if only the time for payment has een )xed, the
vendee is entitled to delivery even efore the price is
paid y him. <hat will e an example+ Sales on Credit,
utang. *f course we 3now that there is already a
perfected CoS and that failure to pay the price do not
invalidate a CoS, Dung ang nangutang hindi nagayad
ut at the time agreed upon the vendee is nevertheless
entitled to delivery if their agreement was Sale on
Credit. Again we(ve discussed, kung na-deliver mo na
and hindi nagbayad si buyer, pede bang basta basta mo
lang bawiin ang property+ 7indi dia. ,uyer refuses to
return the property then your remedy is &udicial action
for rescission of the conract for the property to e
returned to you, or you can )le for speci)c performance
for the payment of the purchase price.
'ow let(s go to nextB
Art. 15". Knless otherwise agreed, the uyer of goods
is not ound to accept delivery thereof y installments.
<here there is a contract of sale of goods to e
delivered y stated installments, which are to e
separately paid for, and the seller ma3es defective
deliveries in respect of one or more instalments, or the
uyer neglects or refuses without &ust cause to ta3e
delivery of or pay for one more instalments, it depends
in each case on the terms of the contract and the
circumstances of the case, whether the reach of
contract is so material as to &ustify the in&ured party in
refusing to proceed further and suing for damages for
reach of the entire contract, or whether the reach is
severale, giving rise to a claim for compensation ut
not to a right to treat the whole contract as ro3en.
(n)GRG ;t is oth an oli and a right of the vendee to
receive delivery if the su&ect matter in full. ;n the same
manner the uyer has no right to pay the price in
installment nor can he e re-uired to ma3e partial
payments.
EA$e?t&onsG ;f there is a stipulation to deliver or to pay
in installments.
'ow what happens if, with regard to delivery of S/, and
the delivery turns out to e defective, what(s the rule+ ;f
the seller ma3es a defective delivery wherein delivery is
in installment, if the reach of such delivery a:ects the
<7*62 then an action for rescission can e )led plus
damages. 7owever if such defective delivery does not
a:ect the <7*62 agreement or the <7*62 C*'0.AC0,
then what happens is that you CA''*0 a:ect rescission
ut you can sue for damages arising from that speci)c
#age 1# of 33
RD
COVERAGE)
delivery. <hy is that important+ <hen the "
st

installment was o3, C
nd
was not, pede bang ipatuloy ang
iba, kung may remaining 3 pa. Dapat ideliver pa rin ang
remaining 3 installments if the defect or the reach
does not a:ect the <7*62 ut if it a:ects the whole
then the contract may e su&ect to rescission then
wala ng obli to deliver pa the suse-uent installments.
7ow aout if the uyer neglects or refuses without &ust
cause to pay for " or more installment, as a ruleG ?ou
cannot treat the whole contract ro3en. Again you can
see3 payment only of the installment not paid. *f
course an agreement may e enterted into, rememer
ACCE.ERATION C.AUSE. !ailure to pay " or C
installments may result to the whole oli to e
demandale.
'ow how aout ACC2@0A'C2 and E26;J2.?.
Art. 154. <here goods are delivered to the uyer,
which he has not previously examined, he is not
deemed to have accepted them unless and until he has
had a reasonale opportunity of examining them for the
purpose of ascertaining whether they are in conformity
with the contract if there is no stipulation to the
contrary.
Knless otherwise agreed, when the seller tenders
delivery of goods to the uyer, he is ound, on re-uest,
to a:ord the uyer a reasonale opportunity of
examining the goods for the purpose of ascertaining
whether they are in conformity with the contract.
<here goods are delivered to a carrier y the seller, in
accordance with an order from or agreement with the
uyer, upon the terms that the goods shall not e
delivered y the carrier to the uyer until he has paid
the price, whether such terms are indicated y mar3ing
the goods with the words Vcollect on delivery,V or
otherwise, the uyer is not entitled to examine the
goods efore the payment of the price, in the asence
of agreement or usage of trade permitting such
examination. (n)Again ta3e note delivery may e actual
or constructive and it(s what transfers ownership over
the property. 'ow syempre sa delivery, merong
acceptance. 'ow this refers to 9accept on the part of the
vendee to ecome the owner of the speci)c goods
which are the S/ when delivery is o:ered to the said
uyerA.
'ow, with regard to inspection and examination of the
goods, if the uyer examines the S/ and duly accepts
them then there is transfer of ownership. <hy is it
important to determine ownership+ ,ecause we need to
determine who ears the loss., aryt+
'ow what happens if the uyer has not previously
examined the goods+ 0he seller must give him a
reasonale opportunity to examine the goods to
determine if the goods are in conformity with the
contract. .ight to examination or inspection is a
condition precedent to the transfer of ownership. ;f the
seller denies such right to uyer, then ownership shall
not pass to the uyer and therefore the seller will still
ear the loss ecause uyer in that case can refuse to
accept.
'ow if the seller is authorized or re-uired to send the
goods to the uyer , delivery of the goods to the carrier
as we have discussed last time, for the purpose of
transmission of the uyer, is deemed delivery of the
goods to the uyer himself. ,ut ta3e note of the terms
that may e agreed upon y the parties.
'ow ta3e note of C*E. Sometimes again Cash>on>
Eelivery or Collect>on>Eelivery. ;f that is the
arrangement, the uyer is '*0 entitled to examine the
goods efore payment of the price in the asence of any
agreement or usage of trade. So what happens if &t &s
CO*. I= t4e %@yer &s den&ed t4e r&'4t to eAa9&ne
ta>e note t4e o<ners4&? <&ll st&ll ?ass to t4e
%@yer. So in that case, uyer ears the loss.
'evertheless the uyer is still given the opportunity to
examine the goods A!02. payment. 'ow if the goods
are inconsistent with the contract then he can ma3e the
seller liale for reach. 0a3e note on this arrangement
with regard C*E.
'ow when we say =right to examineA it is '*0 an
asolute right in the sense that it can only e made y
re-uest of the uyer. ;f the uyer exercises acts which
are already acts of ownership, then that is already
considered delivery wherein ownership is transferred in
favor of the uyer.
0a3e note that failure of the uyer to inspect if due to
un&usti)ed refusal of the seller, the uyer /A? rescind
the contract and may even recover the price paid.
*f course this right to examine must e made within a
reasonale time. ;t may depend on the circumstances of
each case.
*f course ta3e note also this right to inspect /A? ,2
<A;J2E y stipulation. So when you receive goods,
ma3e sure that when you sign wala xang waiver. *r
when you signed it ma3e sure that you(ve already
examined and inspected it.
'ow let(s go to Art&$le 155.
Art. 155. 0he uyer is deemed to have accepted the
goods when he intimates to the seller that he has
accepted them, or when the goods have een delivered
to him, and he does any act in relation to them which is
inconsistent with the ownership of the seller, or when,
after the lapse of a reasonale time, he retains the
goods without intimating to the seller that he has
re&ected them. (n)So here, acceptance may e 2W@.2SS
or ;/@6;2E. 0his article only deals with a disputale
presumption. ;f you have evidence contrary to "$%$
then it may result in your favor. 0his is not a conclusive
presumption.
Art. 15!. ;n the asence of express or implied
agreement of the parties, acceptance of the goods y
the uyer shall not discharge the seller from liaility in
damages or other legal remedy for reach of any
promise or warranty in the contract of sale. ,ut, if, after
acceptance of the goods, the uyer fails to give notice
to the seller of the reach in any promise of warranty
within a reasonale time after the uyer 3nows, or
ought to 3now of such reach, the seller shall not e
liale therefor. (n)So don(t e afraid to accept in the
sense that you(re afraid you are going to waive the
warranties and other conditions.
GRG Acceptance y uyer E*2S '*0 E;SC7A.L2 seller
from liaility in damages or other legal remedy for
reach of promise or warranty. .ememer the case
regarding conveyor elt+ 0here was already delivery+
And only for a period of time pa &a nag-.le ng case for
reach of warranty. <alang -uestion noh in that case it
was already deemed accepted. ,ut that acceptance will
not result to a waiver of liaility for example for hidden
defects. 0a3e note, in that case, nag>prescie nga alng
ang kanyang action.
E/CG ;f there is ;'AC0;*' of the uyer for a considerale
length of time. Linamit na nya, hindi pa rin nya 3i>
nwesrtion. So even if there is a reach of warranty,
inaction will result to estoppel, laches or prescription.
Art. 15#. Knless otherwise agreed, where goods are
delivered to the uyer, and he refuses to accept them,
having the right so to do, he is not ound to return them
to the seller, ut it is suFcient if he noti)es the seller
#age 11 of 33
RD
COVERAGE)
that he refuses to accept them. ;f he voluntarily
constitutes himself a depositary thereof, he shall e
liale as such. (n)So the oligations of the uyer in this
article will not e as a uyer already ut as a
9depositaryA, that(s contract of deposit. 0a3e note he
does not have the oli to deliver ac3 to the seller ut
as long as it is in his possession it is considered as
depositary which is essentially he still has to pay a XXXX
or the said goods.
Art. 15. ;f there is no stipulation as speci)ed in the
)rst paragraph of article "$C3, when the uyerYs refusal
to accept the goods is without &ust cause, the title
thereto passes to him from the moment they are placed
at his disposal. (n)So 3ung walang stipulation then ang
agreement is delivery to carrier, if the uyer has no
&usti)ale reason to refuse acceptance then 3ahit
naali3 sa carrier ang goods 3asi nga hindi nag>accept
si uyer, title already passes to the uyer and thus in
case of loss it is the uyer who shall ear it. Aryt+
Art. 15(. 0he vendee shall owe interest for the period
etween the delivery of the thing and the payment of
the price, in the following three casesG
(") Should it have een so stipulatedM
(C) Should the thing sold and delivered produce fruits
or incomeM
(3) Should he e in default, from the time of &udicial
or extra&udicial demand for the payment of the price.
("$4"a)0his one is with regard to ;'02.2S0. 0he vendee
shall hold interest for the period etween the delivery of
the thing and the payment of the price in 3 casesG
". ;f it has een stipulatedM
C. Should the thing sold and delivered
produce fruits or incomeM
3. Should he e in default from time of
&udicial or extra&udicial demand for payment of
the price.
Art. 15(). Should the vendee e distured in the
possession or ownership of the thing ac-uired, or should
he have reasonale grounds to fear such disturance,
y a vindicatory action or a foreclosure of mortgage, he
may suspend the payment of the price until the vendor
has caused the disturance or danger to cease, unless
the latter gives security for the return of the price in a
proper case, or it has een stipulated that,
notwithstanding any such contingency, the vendee shall
e ound to ma3e the payment. A mere act of trespass
shall not authorize the suspension of the payment of the
price. ("$4Ca)0his article gives the uyer a ground to
suspend the payment of the price. <hen will this
happen+ ;f the vendee is distured in his possession or
ownership of the thing ac-uired or reasonale grounds
to XXXX such disturance y reindivicatory action or
foreclosure of mortgage. 0his is '*0 rescission of the
sale o3, this is suspension of what is due with regard of
the price. 7e can do so until the vendor has caused the
disturance or danger to cease.
7owever, if the (") vendor gives security for the return
of the price in the proper case or (C) it has een
stipulated etween parties that even if such
contingency, the vendee should still e ound to pay
the price then payment cannot e suspended.
0a3e note, distinguish disturance of possession or
ownership from trespass. ,ung meron kang manga
doon merong nagnakaw nag-akyat kuha ng manga
trespass na man yan, now that is '*0 a ground for the
uyer to suspend payment.
Art. 15(1. Should the vendor have reasonale grounds
to fear the loss of immovale property sold and its price,
he may immediately sue for the rescission of the sale.
Should such ground not exist, the provisions of Article
""5" shall e oserved. ("$43)0a3e note when to apply
this article. .easonale ground to fear loss of
immovale property. So in "$54, disturance or
reasonale ground to fear disturance ut here in "$5",
it is the loss of immovale Q that is a ground to
immediately sue for rescission for the sale. So
distinguish one from the other. 'ow, should such ground
'*0 exist, the provisions of ""5" shall e oserved.
Art. 15(1. ;n the sale of immovale property, even
though it may have een stipulated that upon failure to
pay the price at the time agreed upon the rescission of
the contract shall of right ta3e place, the vendee may
pay, even after the expiration of the period, as long as
no demand for rescission of the contract has een made
upon him either &udicially or y a notarial act. After the
demand, the court may not grant him a new term.
("$4#a)0his is another one which ; want you to ta3e
note of. ,laro dito when is it applicale Q sale of
immovale property. 2ven if failure to pay at the price
agreed upon, rescission shall ta3e place, pede pa rin
daw magbayad si vendee, even after the expiration of
the period, until walang demand for rescission of
contract. And ta3e note, the demand for rescission must
e made upon such vendee (") &udicially so that is with
court action or a (C) notarial act unless after the
demand the court would not grant. So when to apply or
not+ So it is clear in a sale of immovale property. So if
it is Contract to Sell, we cannot apply this article.
Another thing, Sale of immovale property in ;nstalment
in which you apply /aceda 6aw, then you apply the
/aceda 6aw and not "$5C.
So again, "$5C is applicale to sale of immovale
property where the parties had stipulated )xed period
to pay price and failure to pay would result to automatic
rescission. Again 07A0 .2SC;SS;*' is '*0 AK0*/A0;C
despite stipulation. ,elangan pa rin ng demand for
rescission, either &udicial or notarial act ut you cannot
apply this is Contracts to Sell or sale of real estate or
real property on installments which are covered y .A
1$$C or /aceda 6aw.
'ow the last article with regard to oli of the uyerB
Art&$le 15(". <ith respect to movale property, the
rescission of the sale shall of right ta3e place in the
interest of the vendor, if the vendee, upon the
expiration of the period )xed for the delivery of the
thing, should not have appeared to receive it, or, having
appeared, he should not have tendered the price at the
same time, unless a longer period has een stipulated
for its payment. So &ust ta3e note of this, it is applicale
to movale property. So "$5C, immovaleM "$53,
movale and when will rescission ta3e place.
So "$%C to "$53, these are the provisions governing the
oligations of the uyer.
*OCUMENTS O, TIT.E TO GOO*S0hese includes
=-uedanA with regard to sugar, or warehouse receipts,
or order, or any other document used in the ordinary
course of usiness in the sale or transfer of goods. 0a3e
note, as proof of possession or control of the goods or
authorizing or purporting to authorize the possessor of
the document, the transfer received either y
endorsement or y delivery goods represented y such
document. Loods here include all chattels (+) personal,
ut not things in action or money of legal tender in the
@7. So this includes growing fruits or crops.
'ow when we say 9order( there must e an
endorsement on the documents.
#age 12 of 33
RD
COVERAGE)
(&ust read the provi elow, same as what she said)
Art. "131. ;n the preceding articles in this 0itle
governing the sale of goods, unless the context or
su&ect matter otherwise re-uiresG
(") VEocument of title to goodsV includes any ill of
lading, doc3 warrant, V-uedan,V or warehouse receipt or
order for the delivery of goods, or any other document
used in the ordinary course of usiness in the sale or
transfer of goods, as proof of the possession or control
of the goods, or authorizing or purporting to authorize
the possessor of the document to transfer or receive,
either y endorsement or y delivery, goods
represented y such document.
VLoodsV includes all chattels personal ut not things
in action or money of legal tender in the @hilippines. 0he
term includes growing fruits or crops.
V*rderV relating to documents of title means an order
y endorsement on the documents.
VUuality of goodsV includes their state or condition.
VSpeci)c goodsV means goods identi)ed and agreed
upon at the time a contract of sale is made.
An antecedent or pre>existing claim, whether for
money or not, constitutes VvalueV where goods or
documents of title are ta3en either in satisfaction
thereof or as security therefor.
(C) A person is insolvent within the meaning of this
0itle who either has ceased to pay his dets in the
ordinary course of usiness or cannot pay his dets as
they ecome due, whether insolvency proceedings have
een commenced or not.
(3) Loods are in a Vdeliverale stateV within the
meaning of this 0itle when they are in such a state that
the uyer would, under the contract, e ound to ta3e
delivery of them.'ow what is the purpose with these
documents of title+ 0hese are evidence of control and
accession or control of goods descried in the said
document. ;t is also a medium of transferring title or
possession over the goods descried in the said
document without having to e:ect 9actual delivery(.
.ememer when we tal3ed aout delivery ; referred to
scenarios with documents of title. <hen what was given
was document of title, that can e considered a
=constructive deliveryA in transferring ownership. So
they are also considered medium or transferring
possession of goods descried without having to
underta3e 9actual delivery( again li3e in warehouse
receipts, that goods are 3ept and stored in a warehouse
and what is given to you is merely a =warehouse
receiptA. ;f you want to transfer control or ownership
over the said goods, di mo na kelangan ilabas uli yung
goods you can transfer such goods y virtue of
warehouse receipt.
'ow what are the ty?es of E*CK/2'0S of 0;062+ <e
have negotiale and non>nego. ,ut these are di:erent
from negotiale instruments Q those are ills of
exchange and promissory notes including chec3sB
those are negotiale =instrumentsA.
7ere we are tal3ing ot =document of titleA in which we
can also classify them as negotiale or non>negotiale.
NEGOTIAB.E Q ;t is stated in the document of title that
the goods shall e delivered to the earer in which,
sinong may hawa3. 'egotiation y mere delivery, so
3ung 3anino mo ipasa yung goods, that is already a
negotiation of document of title.
;t is also negotiale y the order of " person. So what do
we mean y =orderA here, you have endorsement, my
signature for example, i3aw na3apangalan sa
warehouse receipt and na3alagay dun =it is negotialeA
so =y orderA (+), so para itransfer mo to another
person, you have to endorse it aFxing your signature
and deliver the document of title. Actually yung earer
and order it(s the same with negotiale instruments.
7owever, and di:erent sa doc of title is, even if may
na3alagay na sa doc of title na =non>negotialeA it can
still e negotiale as long as merong indication doon na
earer xa or 9order(. 0his is " of the distinguishing mar3
of doc of title sa negotiale instruments. /ere words sa
doc of title E*2S '*0 E2S0.*? negotiaility. ?ou cannot
assail the same thing sa negotiale instruments.
'ow what if we have =*.E2. ;'S0.K/2'0A sai 3o
3elangan merong endorsement, you aFx your
signature. ,ut what if it is an =*.E2. E*CK/2'0A ut it
was delivered wNo endorsement, so what is the e:ect+ ;t
is merely an assignment and not a negotiation.
'ow it is also possile that the document of title isB
NON-NEGOTIAB.E > ;t does not state that the goods
referred therein would e delivered to the earer or to
the order of any person. So merong word na earer of
order, 3ahit na may na3alagay &an ana =non>negotialeA,
negotiale par in yan xa. 'gayon once walang
na3alagay na =delivered to the earer or order to any
personA then that doc of title is considered non>nego.
'ow what happens if you have an =unauthorized
negotiationA+ 0he validity of the negotiaility of the
negotiale document is not impaired y the fact that
the negotiation was done in reach of duty or that the
owner of the doc was deprived y the same.
2x. ,earer doc xa, nawala, so sino ang talagang earer,
yung na3a3itaB what if yung earer magpunta sa
warehouse iclaim nya yung goods what is the e:ect+ ;f
the person to whom the doc was delivered was in good
faith and wNo notice of the said irregularity, in other
words si warehouse man pagtingin nya earer>
instrument pagtingin nya sino yung nagpresent dun nya
iigay ang goods. 0hus he will not e liale in this case.
Dc 3ung magrefuse din naman si warehouse man, xa na
rin ang may liaility. So that is the e:ect if it is a
negotiale doc of title.
0a3e note that the negotiation is a etter right than an
assignment ecause in assignment, you only step in to
the shoes of the assignor. ?ou cannot have etter rights
over the assignor. ,ut if it(s negotiation, you can have a
etter right than the one who negotiated it to you.
'ow what are the parties (+) on a negotiation of a doc of
title+
". 0hat the document is XXXX
C. 0he one who negotiated it to you had a
legal right to negotiate
3. 0he one who negotiated it to you had
3nowledge of no fact which could impair the
validity or worth of the doc
#. 0hat he has the right to transfer title to
goods
$. Loods are merchantale or XXXX
;f there(s any violation of those warranties, the one to
whom doc was negotiated can go after the person who
negotiated such doc of title to him.
So those are the general concepts with regard doc of
title so &ust ta3e note of that.
'ow with regard to delivery through carrier, &ust ta3e
note ofB
#age 13 of 33
RD
COVERAGE)
Art&$le 151". <here, in pursuance of a contract of
sale, the seller is authorized or re-uired to send the
goods to the uyer, delivery of the goods to a carrier,
whether named y the uyer or not, for the purpose of
transmission to the uyer is deemed to e a delivery of
the goods to the uyer, except in the case provided for
in Article "$43, )rst, second and third paragraphs, or
unless a contrary intent appears.
Knless otherwise authorized y the uyer, the seller
must ma3e such contract with the carrier on ehalf of
the uyer as may e reasonale, having regard to the
nature of the goods and the other circumstances of the
case. ;f the seller omit so to do, and the goods are lost
or damaged in course of transit, the uyer may decline
to treat the delivery to the carrier as a delivery to
himself, or may hold the seller responsile in damages.
Knless otherwise agreed, where goods are sent y the
seller to the uyer under circumstances in which the
seller 3nows or ought to 3now that it is usual to insure,
the seller must give such notice to the uyer as may
enale him to insure them during their transit, and, if
the seller fails to do so, the goods shall e deemed to e
at his ris3 during such transit.L.G delivery of goods to
carrier is delivery to uyer.
SA.E B+ NON-OBNER OR B+ ONE B0O 0AS
6OI*AB.E TIT.E<e 3now in Art&$le 14#5 that the
CoS is perfected the moment there is meeting of the
minds upon the thing which is the o&ect of the contract
and upon the price. And ta3e a loo3 at Art&$le 14##,
ownership of the thing sold shall e transferred to the
vendee upon actual or constructive delivery thereof.
'ow what is the e:ect if the one who sold the property
is not the owner of the S/ or does not have auth to sell
it in ehalf of the owner, so we apply Article "$4$.
Art. 15)5. Su&ect to the provisions of this 0itle, where
goods are sold y a person who is not the owner
thereof, and who does not sell them under authority or
with the consent of the owner, the uyer ac-uires no
etter title to the goods than the seller had, unless the
owner of the goods is y his conduct precluded from
denying the sellerYs authority to sell.
'othing in this 0itle, however, shall a:ectG
(") 0he provisions of any factorsY act, recording
laws, or any other provision of law enaling the
apparent owner of goods to dispose of them as
if he were the true owner thereofM
(C) 0he validity of any contract of sale under
statutory power of sale or under the order of a
court of competent &urisdictionM
(3) @urchases made in a merchantYs store, or in
fairs, or mar3ets, in accordance with the Code of
Commerce and special laws. (n)'othing in this
provision that tells us that such a sale is void. ;t
only tells us what the rights are of the uyer.
So ta3e note even if not the owner, sale is still valid ut
again the uyer has no etter right than the seller
ecause even if it is delivered to you y the seller, since
the seller has no ownership over the property, then he
cannot diba transfer ownership over something he does
not own.
7ow aout a voidale title+
Art. "$41. <here the seller of goods has a voidale title
thereto, ut his title has not een avoided at the time of
the sale, the uyer ac-uires a good title to the goods,
provided he uys them in good faith, for value, and
without notice of the sellerYs defect of title. (n)<hat is
voidale, it is valid until annulled.
7ow can we summarize it+
;f the sale is made y a non>owner, at the perfection
stage ownership is '*0 re-uired so the sale is valid.
*wnership is necessary only at the time of delivery. So
now when the non>owner delivers the S/, would that
result to transfer of ownership to uyer+ '* ecause
the seller has no title to transfer.
'ow what is the e:ect if suse-uently the seller
ac-uires title thereto+
Art. 14"4. <hen a person who is not the owner of a
thing sells or alienates and delivers it, and later the
seller or grantor ac-uires title thereto, such title passes
y operation of law to the uyer or grantee.So y
operation of law, title passes to the uyerH
'ow, in a CoS if it is a co>owned property, what the
vendee otains y virtue of such sale are the same
rights as the vendor as co>owner. So if T lang interest
nya, pede nyang iento yon so anong mtransfer 3y
uyer+ So yun lang din. Share ni vendor. 0he vendee
merely steps into the shoes of the vendor as co>owner.
2WC2@0 of course when the intention of the purchase
was really the property itself and not &ust the spiritual
share.
An agreement that purports a speci)c portion of an
unpartitioned co>owned property is '*0 void ta3e note.
;t shall e:ectively transfer the ideal share, yung T
interest dia 3asi pag co>owned dia wala namang
speci)ed portion dia na eto ang sayo. So ideal share
xa, T of the property and meron. 7owever ta3e note of
the exceptions wherein ownership can nevertheless e
transferred or soldG
;f the property is indivisile
;f there is consent of other co>owners
;f y operation of law he ecomes the owner of
the other parcels he co>owned.
So ta3e note of that. ;f it happens that the sale was
made y non>owner, and he delivers it even if he is not
the ownerB GR: 'o transfer of ownership. E/CE-TION:
<herein ownership is transferred y act of non>ownerG
". 2stoppel y true owner
C. 0orrens system
3. ,y order of courts
#. Sale of merchant store and mar3ets.
By: Glor&a Ara=ol
#age 14 of 33
r$
COVERAGE)
*o@%le Sales
Art&$le 1544. ;f the same thing should have een sold
to di:erent vendees, the ownership shall e transferred
to the person who may have )rst ta3en possession
thereof in good faith, if it should e movale property.
Should it e immovale property, the ownership shall
elong to the person ac-uiring it who in good faith )rst
recorded it in the .egistry of @roperty.
Should there e no inscription, the ownership shall
pertain to the person who in good faith was )rst in the
possessionM and, in the asence thereof, to the person
faith. ("#83)
L2'2.A6 .K62G @rior tempore, @rior Iure Z!irst in time,
stronger in right[
". .e-uisitesG ,efore you apply, you must ta3e note
of the re-uisites "
st
.
a.) C or more sales must e valid sales
.) C or more sales must pertain to exactly the same
su&ect
c.) C uyers must each represent conPicting interests
d.) C uyers must each have ought from the very same
seller
'ote G if one of these re-uisites is present, that(s the
time you apply "$##
.K62S ACC*.E;'L 0* 072 "$##
/*JA,62S
o ownership shall e con)rmed to the person who
may have ta3en possession in good faith
;//*JA,62S
o person who in good faith recorded it in .egistry
of @roperty
o if thereYs no inscription, person who in good
faith was )rst in possession
o in asence thereof, to the person who presents
the oldest title, provided there(s good faith
'ow, the provision of doule sales, presumes the title or
ownership passes to the "st uyer. 6et(s Lo to the cases
CORONE. 6S. CA
CA' <2 A@@6? 072 C*'0.AC0 *! SA62 72.2+ 7ere
ta3e note that, in this case it emphasis the distinction
etween a contract to sell and a contract of sale. <hat
transpire here is a conditional contract of sale> upon the
ful)llment of the suspensive condition, the sale ecomes
asolute and this will de)nitely a:ect the sellerYs title
thereto. ;n fact, if there had een previous delivery of
the su&ect property, the sellerYs ownership or title to the
property is automatically transferred to the uyer such
that, the seller will no longer have any title to transfer to
any third person. ;n this case, the agreement could not
have een a contract to sell ecause the sellers herein
made no e&press reservation o/ ownership or title to the
sub0ect parcel o/ land. 7aving these contracts, we have
a doule sale. 0he records of the case shows that the
deed of asuolote sale, the one with maanag, give rise
to the issuance of a title in name of maanag on &une $
"5%$.
7owever, 3nowledge of the "
st
uyer of the C
nd
sale
cannot defeat the "
st
uyer right except when the C
nd
uyer "
st
register in good faith the C
nd
sale.
;n the case of doule sale, what is relevant is not the C
nd
uyer uying the property in good faith, ut is if the C
nd
uyer register the sale in good faith. 7ere, it was
determined that maanag could not have registered it in
good faith when he registered the sale in &une ecause
in early Ianuary there is a notice of lis pendens on the
title. At the time of registration maanag 3new that the
property is previously sold to the private of the
respondent. So here the registration is in ad faith. So
again, with regrads to the C
nd
uyer, at the tiome of
purchase and until the time he registered the sale, he
must e in good faith.
0AD2 '*02G if the vendee in a doule sale (C
nd
uyer)
registered the sale after he had ac-uired 3nowledge of
previous sale to a 3
rd
person, that was a registration in
ad faith an could not ac-uire any etter right.
2ssentially, we can say that what defeats the right of the
"
st
uyer is a registration in good faith y the C
nd
uyer.
Dung walang registration eh di, possession in good faith
ng C
nd
uyer. @ag walang possession and registration,> sa
"
st
uyer na
E;L2S0 CORONE. vs. CA
,a$ts: 0he petition involves a complaint for speci)c
performance to compel petitioners to consummate the
sale of a parcel of land with its improvements located
along .oosevelt Avenue in Uuezon City entered into y
the parties sometime in Ianuary "5%$ for the price of
@",C#4,444.44.
*n Ianuary "5, "5%$, defendants>appellants .omulo
Coronel, et al. (Coronels) executed a document entitled
V.eceipt of Eown @aymentV in favor of plainti: .amona
@atricia Alcaraz (hereinafter referred to as .amona)
Clearly, the conditions appurtenant to the sale are the
followingG
". .amona will ma3e a down payment @$4,444.44 upon
execution of the document aforestatedM
C. 0he Coronels will cause the transfer in their names of
the title of the property registered in the name of their
deceased father upon receipt of the @$4,444.44 down
paymentM
3. Kpon the transfer in their names of the su&ect
property, the Coronels will execute the deed of asolute
sale in favor of .amona and the latter will pay the
former the whole alance of @","54,444.44.
*n the same date (Ianuary "$, "5%$), Concepcion E.
Alcaraz (Concepcion), mother of .amona, paid the down
payment of @$4,444.44.
*n !eruary 1, "5%$, the property originally registered
in the name of the CoronelsY father was transferred in
their names under 0C0
'o. 3C84#3.
*n !eruary "%, "5%$, the Coronels sold the property
covered y 0C0 'o. 3C84#3 to intervenor>appellant
Catalina ,. /aanag (Catalina) for @",$%4,444.44 after
the latter has paid @344,444.44. !or this reason,
Coronels canceled and rescinded the contract with
.amona y depositing the down payment paid y
Concepcion in the an3 in trust /or 1amona 2atricia
(lcara3.
*n !eruary CC, "5%$, Concepcion, et al., )led a
complaint for speci)c performance against the Coronels
and caused the annotation of a notice of lis pendens at
the ac3 of 0C0 'o. 3C8#43.
*n April C, "5%$, Catalina caused the annotation of a
notice of adverse claim covering the same property with
the .egistry of Eeeds of Uuezon City (2xh. V!VM 2xh. V1V).
*n April C$, "5%$, the Coronels executed a Eeed of
Asolute Sale over the su&ect property in favor of
Catalina to which a new title over the su&ect property
was issued in her name.
Iss@e: <*' the V.eceipt of Eown @aymentV emodied a
perfected contract of sale, which perforce, they see3 to
enforce y means of an action for speci)c performance
or signi)ed only a mere executory contract to sell,
#age 15 of 33
r$
COVERAGE)
su&ect to certain suspensive conditionsN <*' doule
sale applies.
0eld: 0he parties (Coronel and Alcaraz) had agreed to a
conditional contract of sale, consummation of which is
su&ect only to the successful transfer of the certi)cate
of title from the name of petitionersY father, Constancio
@. Coronel, to their names. 0hus, the sale of Coronel to
Catalina gave rise to a case of doule sale.
R@l&n':;t is essential to distinguish etween a contract
to sell and a conditional contract of sale specially in
cases where the su&ect property is sold y the owner
not to the party the seller contracted with, ut to a third
person, as in the case at ench. In a $ontra$t to sell:
t4ere %e&n' no ?rev&o@s sale o= t4e ?ro?erty: a
t4&rd ?erson %@y&n' s@$4 ?ro?erty des?&te t4e
=@l8ll9ent o= t4e s@s?ens&ve $ond&t&on s@$4 as t4e
=@ll ?ay9ent o= t4e ?@r$4ase ?r&$e: =or &nstan$e:
$annot %e dee9ed a %@yer &n %ad =a&t4 and t4e
?ros?e$t&ve %@yer $annot see> t4e rel&e= o=
re$onveyan$e o= t4e ?ro?erty. T4ere &s no do@%le
sale &n s@$4 $ase. 0itle to the property will transfer to
the uyer after registration ecause there is no defect in
the owner>sellerYs title per se, ut the latter, of course,
may e used for damages y the intending uyer.
;n a conditional contract of sale, however, upon the
ful)llment of the suspensive condition, the sale ecomes
asolute and this will de)nitely a:ect the sellerYs title
thereto. ;n fact, if there had een previous delivery of
the su&ect property, the sellerYs ownership or title to the
property is automatically transferred to the uyer such
that, the seller will no longer have any title to transfer to
any third person. A??ly&n' Art&$le 1544 o= t4e C&v&l
Code: s@$4 se$ond %@yer o= t4e ?ro?erty <4o 9ay
4ave 4ad a$t@al or $onstr@$t&ve >no<led'e o=
s@$4 de=e$t &n t4e sellerCs t&tle: or at least <as
$4ar'ed <&t4 t4e o%l&'at&on to d&s$over s@$4
de=e$t: $annot %e a re'&strant &n 'ood =a&t4. S@$4
se$ond %@yer $annot de=eat t4e 8rst %@yerCs t&tle.
In $ase a t&tle &s &ss@ed to t4e se$ond %@yer: t4e
8rst %@yer 9ay see> re$onveyan$e o= t4e ?ro?erty
s@%De$t o= t4e sale.
0he agreement could not have een a contract to sell
ecause the sellers herein made no e&press reservation
o/ ownership or title to the sub0ect parcel o/ land.
!urthermore, the circumstance which prevented the
parties from entering into an asolute contract of sale
pertained to the sellers themselves (the certi)cate of
title was not in their names) and not the full payment of
the purchase price. Knder the estalished facts and
circumstances of the case, the Court may safely
presume that, had the certi)cate of title een in the
names of petitioners>sellers at that time, there would
have een no reason why an asolute contract of sale
could not have een executed and consummated right
there and then.
0hus, the parties did not merely enter into a contract to
sell where the sellers, after compliance y the uyer
with certain terms and conditions, promised to sell the
property to the latter. <hat may e perceived from the
respective underta3ings of the parties to the contract is
that petitioners had already agreed to sell the house and
lot they inherited from their father, completely willing to
transfer full ownership of the su&ect house and lot to
the uyer if the documents were then in order. ;t &ust
happened, however, that the transfer certi)cate of title
was then still in the name of their father. ;t was more
expedient to )rst e:ect the change in the certi)cate of
title so as to ear their names. 0hat is why they
undertoo3 to cause the issuance of a new transfer of the
certi)cate of title in their names upon receipt of the
down payment in the amount of @$4,444.44. As soon as
the new certi)cate of title is issued in their names,
petitioners were committed to immediately execute the
deed of asolute sale. *nly then will the oligation of
the uyer to pay the remainder of the purchase price
arise.
<hat is clearly estalished y the plain language of the
su&ect document is that when the said V.eceipt of
Eown @aymentV was prepared and signed y petitioners
.omeo A. Coronel, et al., the parties had agreed to a
conditional contract of sale, consummation of which is
su&ect only to the successful transfer of the certi)cate
of title from the name of petitionersY father, Constancio
@. Coronel, to their names.
0he Court signi)cantly notes this suspensive condition
was, in fact, ful)lled on !eruary 1, "5%$ (2xh. VEVM 2xh.
V#V). 0hus, on said date, the conditional contract of sale
etween petitioners and private respondent .amona @.
Alcaraz ecame oligatory, the only act re-uired for the
consummation thereof eing the delivery of the property
y means of the execution of the deed of asolute sale
in a pulic instrument, which petitioners une-uivocally
committed themselves to do as evidenced y the
V.eceipt of Eown @ayment.V
<ith the foregoing conclusions, the sale to the other
petitioner, Catalina ,. /aanag, gave rise to a case of
doule sale where Article "$## of the Civil Code will
apply, to witG
(rt. 4566. I/ the same thing should have been sold to
di7erent vendees, the ownership shall be trans/erred to
the person who may have .rst taken possession thereo/
in good /aith, i/ it should be movable property.
)hould i/ be immovable property, the ownership shall
belong to the person acquiring it who in good /aith .rst
recorded it in 1egistry o/ 2roperty.
)hould there be no inscription, the ownership shall
pertain to the person who in good /aith was .rst in the
possession8 and, in the absence thereo/ to the person
/aith.
0he aove>cited provision on doule sale presumes title
or ownership to pass to the )rst uyer, the exceptions
eingG (a) when the second uyer, in good faith,
registers the sale ahead of the )rst uyer, and ()
should there e no inscription y either of the two
uyers, when the second uyer, in good faith, ac-uires
possession of the property ahead of the )rst uyer.
Knless, the second uyer satis)es these re-uirements,
title or ownership will not transfer to him to the
pre&udice of the )rst uyer.
@etitioner point out that the notice of lis pendens in the
case at ar was annoted on the title of the su&ect
property only on !eruary CC, "5%$, whereas, the
second sale etween petitioners Coronels and petitioner
/aanag was supposedly perfected prior thereto or on
!eruary "%, "5%$. 0he idea conveyed is that at the time
petitioner /aanag, the second uyer, ought the
property under a clean title, she was unaware of any
adverse claim or previous sale, for which reason she is
uyer in good faith.
<e are not persuaded y such argument.
In a $ase o= do@%le sale: <4at 8nds relevan$e and
9ater&al&ty &s not <4et4er or not t4e se$ond %@yer
<as a %@yer &n 'ood =a&t4 %@t <4et4er or not sa&d
se$ond %@yer re'&sters s@$4 se$ond sale &n 'ood
=a&t4: t4at &s: <&t4o@t >no<led'e o= any de=e$t &n
t4e t&tle o= t4e ?ro?erty sold.
As $learly %orne o@t %y t4e ev&den$e &n t4&s $ase:
?et&t&oner Ma%ana' $o@ld not 4ave &n 'ood =a&t4:
re'&stered t4e sale entered &nto on ,e%r@ary 1:
1(5 %e$a@se as early as ,e%r@ary 11: 1(5: a
not&$e o= lis pendens 4ad %een annotated on t4e
trans=er $ert&8$ate o= t&tle &n t4e na9es o=
?et&t&oners: <4ereas ?et&t&oner Ma%ana'
re'&stered t4e sa&d sale so9et&9e &n A?r&l: 1(5.
#age 16 of 33
r$
COVERAGE)
At t4e t&9e o= re'&strat&on: t4ere=ore: ?et&t&oner
Ma%ana' >ne< t4at t4e sa9e ?ro?erty 4ad
already %een ?rev&o@sly sold to ?r&vate
res?ondents: or: at least: s4e <as $4ar'ed <&t4
>no<led'e t4at a ?rev&o@s %@yer &s $la&9&n' t&tle
to t4e sa9e ?ro?erty. @etitioner /aanag cannot
close her eyes to the defect in petitionersY title to the
property at the time of the registration of the property.
0hus, the sale of the su&ect parcel of land etween
petitioners and .amona @. Alcaraz, perfected on
!eruary 1, "5%$, prior to that etween petitioners and
Catalina ,. /aanag on !eruary "%, "5%$, was
correctly upheld y oth the courts elow.
SAN .OREN2O vs CA
CA' <2 A@@6? "$## 72.2+ So here chec3 the re-uisites.
!or one, dapat may valid contract of sales. 72.2, "$##
is not applicale. 7ere what we have is contract to sell
excuted in favor of ,aasanta and the one is in favor of
San 6orenzo as contract of sale. 7ere "$## is not
applicale so the rule to apply is the general rule, @rior
tempore, @rior Iure Z!irst in time, stronger in right[. S6EC
has the etter right here, according to the Supreme
Court. 0he asis is the the general rule. At the time that
oth deed was executed , S6EC has no 3nowledge of the
prior transaction of the spouses aasanta. !rom the
time of the execution of the "
st
deed up to the moment
transfer and delivery (execution of pulic document) of
possession to S6EC, it had acted in good faith and the
suse-uent issuance of the of lis pendins has no e:ect
at all on the consomated sale in favor of S6EC. 7ere,
"$## is not applicale 3asi nga no doule sale.
.ememer what was executed to aasanta was a mere
receipt so contract to sell sya therefore aasanta did
not have any etter right, in fact no other evidence was
produce other than the receipt in fact hindi rin sya in
possession of the property.
E;L2S0
SAN .OREN2O vs. CA
,ACTS: *n C4 August "5%1, the Spouses 6u purportedly
sold the two parcels of land to respondent @alo
,aasanta, (hereinafter, ,aasanta) for the price of
)fteen pesos (@"$.44) per s-uare meter. ,aasanta
made a downpayment of )fty thousand pesos
(@$4,444.44) as evidenced y a memorandum receipt
issued y @acita 6u of the same date. Several other
payments totaling two hundred thousand pesos
(@C44,444.44) were made y ,aasanta.
Sometime in /ay "5%5, ,aasanta wrote a letter to
@acita 6u to demand the execution of a )nal deed of sale
in his favor so that he could e:ect full payment of the
purchase price. ;n the same letter, ,aasanta noti)ed
the spouses aout having received information that the
spouses sold the same property to another without his
3nowledge and consent. 7e demanded that the second
sale e cancelled and that a )nal deed of sale e issued
in his favor.
;n response, @acita 6u wrote a letter to ,aasanta
wherein she ac3nowledged having agreed to sell the
property to him at )fteen pesos (@"$.44) per s-uare
meter. She, however, reminded ,aasanta that when
the alance of the purchase price ecame due, he
re-uested for a reduction of the price and when she
refused, ,aasanta ac3ed out of the sale. @acita added
that she returned the sum of )fty thousand pesos
(@$4,444.44) to ,aasanta through 2ugenio *ya.
*n C Iune "5%5, respondent ,aasanta, as plainti:, )led
efore the .egional 0rial Court (.0C), ,ranch 3", of San
@edro, 6aguna, a #omplaint /or )peci.c 2er/ormance
and Damages" against his co>respondents herein, the
Spouses 6u.
*n "5 Ianuary "554, herein petitioner San 6orenzo
Eevelopment Corporation (S6EC) )led a !otion /or
Intervention1 efore the trial court. S6EC alleged that it
had legal interest in the su&ect matter under litigation
ecause on 3 /ay "5%5, the two parcels of land
involved, had een sold to it in a Eeed of Asolute Sale
with /ortgage. S6EC stressed that after the execution of
the sale in its favor it immediately too3 possession of
the property and asserted its rights as new owner as
opposed to ,aasanta who has never exercised acts of
ownership. Since the titles ore no adverse claim,
encumrance, or lien at the time it was sold to it, S6EC
argued that it had every reason to rely on the
correctness of the certi)cate of title and it was not
oliged to go eyond the certi)cate to determine the
condition of the property.
*n the other hand, respondent ,aasanta argued that
S6EC could not have ac-uired ownership of the property
ecause it failed to comply with the re-uirement of
registration of the sale in good faith. 7e emphasized
that at the time S6EC registered the sale in its favor on
34 Iune "554, there was already a notice of lis
pendens annotated on the titles of the property made as
early as C Iune "5%5. 7ence, petitioner(s registration of
the sale did not confer upon it any right.
ISSUE: <ho etween S6EC and ,aasanta has a etter
right over the two parcels of land su&ect of the instant
case in view of the successive transactions executed y
the Spouses 6u.
0E.*: S6EC has a etter right.
<hat Spouses 6u and ,aasanta had was a contract to
sell. Since ,aasanta failed to pay the full purchase
price due to his failure to consign the same in court,
Spouses 6u(s oligation to transfer ownership to
,aasanta never materialized.
Assuming that what they had was a contract of sale,
,aasanta(s claim of ownership should nevertheless fail.
2xplicitly, the law provides that the ownership of the
thing sold is ac-uired y the vendee from the moment it
is delivered to him in any of the ways speci)ed in Article
"#58 to "$4".34 0he word VdeliveredV should not e
ta3en restrictively to mean transfer of actual physical
possession of the property. 0he law recognizes two
principal modes of delivery, to witG (") actual deliveryM
and (C) legal or constructive delivery.
Actual delivery consists in placing the thing sold in the
control and possession of the vendee.3" 6egal or
constructive delivery, on the other hand, may e had
through any of the following waysG the execution of a
pulic instrument evidencing the saleM3C symolical
tradition such as the delivery of the 3eys of the place
where the movale sold is eing 3eptM33 traditio longa
manu or y mere consent or agreement if the movale
sold cannot yet e transferred to the possession of the
uyer at the time of the saleM3# traditio brevi manu if
the uyer already had possession of the o&ect even
efore the saleM3$ and traditio constitutum
possessorium, where the seller remains in possession of
the property in a di:erent capacity.31
!ollowing the aove dis-uisition, respondent ,aasanta
did not ac-uire ownership y the mere execution of the
receipt y @acita 6u ac3nowledging receipt of partial
payment for the property. !or one, the agreement
etween ,aasanta and the Spouses 6u, though valid,
was not emodied in a pulic instrument. 7ence, no
constructive delivery of the lands could have een
e:ected. !or another, ,aasanta had not ta3en
possession of the property at any time after the
perfection of the sale in his favor or exercised acts of
dominion over it despite his assertions that he was the
rightful owner of the lands. Simply stated, there was no
delivery to ,aasanta, whether actual or constructive,
which is essential to transfer ownership of the property.
0hus, even on the assumption that the perfected
#age 1 of 33
r$
COVERAGE)
contract etween the parties was a sale, ownership
could not have passed to ,aasanta in the asence of
delivery, since in a contract of sale ownership is
transferred to the vendee only upon the delivery of the
thing sold.38
0he sale in favor of S6EC had long een consummated
insofar as the oligation of the Spouses 6u to transfer
ownership over the property to S6EC is concerned.
S@*KS2 E262*' JS *'L Q
in favor of ong
7ere "$## applies. 0here is a doule sale.
<e have two contracts here. 0he "
st
one is executed on
/arch "553 in favor of *ng. 0he C
nd
is on after /arch
"553. "
st
we have to loo3 if the C contracts of sale is
valid or not.
2WA/@62G A sold to , a property on Septemer "$ C4"3.
Conse-uently A sold the same property to C on
Septemer 34 C4"3. <hat happens if today *ctoer C ,
registered the sale ut , has the 3nowledge that the
property was sold to C on Septemer 34+ ,etween , or
C who has a etter right+ .ememer the re-uirement of
good faith at the time of registration is for the C
nd
uyer.
,a3it naman ; apply against the , na sya man ang "
st
uyer. So etter right 3ay si ,. when we tal3 aout
3nowledge this pertains to the 3nowledge of a =priorA
sale in so far as to consider the C
nd
uyer into ad faith.
<hat happens if, C registers the sale in *ctoer C with
the 3nowledge of the prior sale in favor of ,+ who has
the etter right+ *f course it is , 3asi nga C now is in
ad faith.
@ALAEKA' vs S@*KS2S *CK/A
0here was two valid of sale. 0he "
st
sale was in favor of
the @etitioner and the C
nd
in favor of the C
nd
spouses
ocuma. 7ere the su&ect lot was owned y " personG
sold half of it to another ut no deed was issued. So
suse-uently the entire lot was sold to the other person.
so here there was a doule sale. ,ut the C
nd
uyer
registered it )rst. <7* 7AS 072 ,2002. .;L70+ 0he "
st
uyer. 0he C
nd
uyer was in ad faith dia 3asi of his
prior 3nowledge of the prior sale.
C fold re-uirementG
R L! in ac-uisition
R L! in registration
So dapat L! and C
nd
uyer from ac-uisition to
registration.
Eigest
-AGA*UAN vs. S-S. OCUMA
,a$tsG A ig parcel of land originally elonged to Cleto.
0he ig parcel of land was the su&ect of two separate
lines of dispositions. 0he )rst line of dispositions egan
with the sale y Cleto to Cereso on "5C$. Cereso in turn
sold the land to the Antipolos on, "5#3. 0he Antipolos
sold the property to Agaton @agaduan, father of
petitioners, on /arch C#, "51". All the dispositions in
this line were not registered and did not result in the
issuance of new certi)cates of title in the name of the
purchasers.
0he second line of dispositions started on "5$#, after
Cleto(s death, when his widow .uperta Asuncion as his
sole heir and new owner of the entire tract, sold the
same to 2ugenia .eyes and a 0C0 'o. 0>"CC"was issued
under her name.
*n 'ovemer C1, "51", 2ugenia .eyes executed a
unilateral deed of sale where she sold the northern
portion to respondents and the southern portion to
Agaton @agaduan. 6ater, on Iune $, "51C, 2ugenia
executed another deed of sale, this time conveying the
entire parcel of land, including the southern portion, in
respondent(s favor. 0hus, 0C0 'o. 0>"CC" was cancelled
and in lieu thereof 0C0 'o. 0>$#C$ was issued in the
name of respondents.
@etitioners instituted a complaint for reconveyance of
the southern portion with damages, against respondents
efore the .0C.
0he trial court rendered a decision in petitioners( favor.
.uling that a constructive trust over the property was
created in petitioners( favor, the court elow ordered
respondents to reconvey the disputed southern portion.
Iss@e:<hether or not the @agaduans were the rightful
owner of the disputed portion of the land even though
the Sps. *cuma had it )rst registered.
0eld:An action for reconveyance respects the decree of
registration as incontrovertile ut see3s the transfer of
property, which has een wrongfully or erroneously
registered in other personsY names, to its rightful and
legal owners, or to those who claim to have a etter
right. 7owever, no trust was created under Article "#$1
of the new Civil Code which providesG
Art. "#$1. ;f property is ac-uired through mista3e or
fraud, the person otaining it is, y force of law,
considered a trustee of an implied trust for the ene)t of
the person from whom the property comes.
0he property in -uestion did not come from the
petitioners. ;n fact that property came from 2ugenia
.eyes. 0he title of the *cumas can e traced ac3 from
2ugenia .eyes to .uperta Asuncion to the original owner
'icolas Cleto. 0hus, if the respondents are holding the
property in trust for anyone, it would e 2ugenia .eyes
and not the petitioners.
/oreover, Article "#$1 refers to actual or constructive
fraud. Actual fraud consists in deception, intentionally
practiced to induce another to part with property or to
surrender some legal right, and which accomplishes the
end designed. Constructive fraud, on the other hand, is
a reach of legal or e-uitale duty which the law
declares fraudulent irrespective of the moral guilt of the
actor due to the tendency to deceive others, to violate
pulic or private con)dence, or to in&ure pulic interests.
0he latter proceeds from a reach of duty arising out of
a )duciary or con)dential relationship. ;n the instant
case, none of the elements of actual or constructive
fraud exists. 0he respondents did not deceive Agaton
@agaduan to induce the latter to part with the ownership
or deliver the possession of the property to them.
/oreover, no )duciary relations existed etween the two
parties.
0his lac3 of a trust relationship does not inure to the
ene)t of the respondents.
0he Court )nds that this is a case of doule sale under
article "$## of the Civil Code which provides that if the
same thing should have een sold to di:erent vendees,
the ownership shall e transferred to the person who
may have )rst possession thereof in good faith, if it
should e movale property. <here it is an immovale
property that is the su&ect of a doule sale, ownership
shall e transferredG (") to the person ac-uiring it who in
good faith )rst recorded it in the .egistry of @ropertyM (C)
to the person who in good faith was )rst in possessionM
and (3) to the person who presents the oldest title,
provided there is good faith. 0he re-uirement of the law
then is two>foldG ac-uisition in good faith and
registration in good faith."C
;n this case there was a )rst sale y 2ugenia .eyes to
Agaton @agaduan and a second sale y 2ugenia .eyes
to the respondents."3 !or a second uyer li3e the
respondents to successfully invo3e the second
paragraph, Article "$## of the Civil Code, it must
possess good faith from the time of the sale in its favor
#age 1! of 33
r$
COVERAGE)
until the registration of the same. .espondents sorely
failed to meet this re-uirement of good faith since they
had actual 3nowledge of 2ugenia(s prior sale of the
southern portion property to the petitioners, a fact
antithetical to good faith. 0his cannot e denied y
respondents since in the same deed of sale that 2ugenia
sold them the northern portion to the, 2ugenia also sold
the southern portion of the land to @agaduan. 0hus the
suse-uent issuance of 0C0, to the extent that it a:ects
the @agaduan(s portion, conferred no etter right than
the registration which was the source of the authority to
issue the said title. Dnowledge of the )rst sale lac3ens
this prior registration with ad faith. Lood faith must
concur with the registration.
As the respondents gained no rights over the land, it is
petitioners who are the rightful owners, having
estalished that their successor>in>interest Agaton
@agaduan had purchased the property from 2ugenia
.eyes on 'ovemer C1, "51" and in fact too3
possession of the said property. 0he action to recover
the immovale is not arred y prescription, as it was
)led a little over C8 years after the title was registered in
ad faith y the *cumas as per Article ""#" of the Civil
Code.
CA.,*'26 vs CA
7ere, the "
st
purchaser registered the sale after the
3nowledge of the C
nd
sale. 0his does not result to a
registration in ad faith. 0he fact that you registered it
after the C
nd
sale does not a:ect you position as good
faith. Caronel has a etter right here than infante.
SK//A.?
;t may sound so simple pero hindi sya. So all re-uisites
must e present. So here sa mga cases ,we have seen
that you cannot apply "$## in a contract to sell. ,ut we
have seen that it can e applied in a conditional contract
of sale. <ith regards to Lood faith and ad faith these
are the issues which is usually as3ed in "$##.
"
st
> tignan muna 3ong 3aninnong good faith or ad faith
and gina-uestion.
C
nd
>ad faith would only re-uest to a prior 3nowledge of
a prior sale.
LL'G ;f not all elements of doule sales are present
@.;'C;@62G
@rior tempore, @rior Iure
Z!irst in time, stronger in right[
Eo not apply this principle if all the elements of doule
sale are present.
,A. C44", C44$
". A sold land to , > Iune "$, "55$
C. A sold same land to C > Iune 34, "55$
3. <ho has a etter right ifG
o ,(s sale was registered efore C(s sale ut ,
3new the sale to C
o C(s sale was registered efore ,(s sale ut C
3new the sale to ,
A'S<2.
". , has a etter right ecause he was ale to
record the sale in good faith since he recorded efore
the sale to C happened
a. 2ven if , recorded the sale 3nowing of the
suse-uent sale to C, , is still in good faith since in
doule sale, what creates ad faith is 3nowledge of a
prior sale, not of a later sale
. , still has a etter right over C since C
undertoo3 registration in ad faith having 3nowledge of
the @.;*. sale to , (Art. "$##, Civil Code)
,A. C44#
a. A sold a lot to , ut the deed of sale was not
registered.
". *ne year later, A sold same lot to C and C was
ale to register the same and otain a 0C0 over the lot
in his name.

> <ho has the etter right over the lot+ 2xplain
the legal asis for your answer.
A'S<2.
(") C will have a etter right to the lot provided that
he was ale to register the lot under his name in good
faith.
". Knder the Civil Code, in case of doule sale of
real property, the one who was ale to register the
property in his name in good faith will e deemed the
owner
S2662. ;S '*'>*<'2.
S0A0KS>J*;E
a. Article "$4$ > goods are sold y a non>owner or
does not sell under authority or with the consent of the
owner, the uyer ac-uires no etter title to the goods
than the seller had
4. Status of the contract is void > D%2 v. #(, *ct.
49, 4::5
*,6;LA0;*' *! 072 ,K?2.
Article 4567. -he vendee is bound to accept delivery
and to pay the price o/ the thing sold at the time and
place stipulated in the contract.
I/ the time and place should not have been stipulated,
the payment must be made at the time and place o/ the
delivery o/ the thing sold.
'oteG "C#4
Article 4789. 2ayment shall be made to the person in
whose /avor the obligation has been constituted, or his
successor in interest, or any person authori3ed to
receive it.
;f you will pay the purchase price, iinigay mo sa
3apitahay dali wala sila. 'o valid payment here so
pwede 3a parin mag>demand.
Sale is a reciprocal contract so the vendor is not
re-uired to deliver the su&ect matter until the price is
paid. 'or the vendee to paid the price until the su&ect
matter is delivered to him in the asence of any
agreement.
Article 4578. -he vendor shall not be bound to deliver
the thing sold, i/ the vendee has not paid him the price,
or i/ no period /or the payment has been .&ed in the
contract.
if stiulated the vendee is ound to accept the
price at the time and place stipulated. ;f there(s none,
the vendee is ound to pay at the time and place of
delivery. ;n the asence of agreement of the place
delivery, follow article "C$"
#age 1" of 33
r$
COVERAGE)
Article 4754. 2ayment shall be made in the place
designated in the obligation.
-here being no e&press stipulation and i/ the
undertaking is to deliver a determinate thing, the
payment shall be made wherever the thing might be at
the moment the obligation was constituted.
In any other case the place o/ payment shall be the
domicile o/ the debtor.
I/ the debtor changes his domicile in bad /aith or a/ter
he has incurred in delay, the additional e&penses shall
be borne by him.
-hese provisions are without pre0udice to venue under
the 1ules o/ #ourt.
;f only the time of the delivery of the thing sold
is stipulated in the contract the vendee is re-uired to
pay even efore the thing is delivered. 0his is with
regard to conditional sales.
;f only the time of payment is made )x, the
vendee is re-uired to delivery even fore the price is
paid y him.
2xample, utang or sales on credit. Dung ung
detor di magayad ut at the time agreed upon, the
vendee nevertheless entitled to delivery , there was a
sale on credit. Dung nadelivery muna tapos di magayad
ang uyer, pwede mo ang asta3x 3unin ang property+
7indi. ;f the uyer refuses to return the property, you
remedy is a &udicial recession of the sale or speci)c
performance
Article 456:. ;nless otherwise agreed, the buyer o/
goods is not bound to accept delivery thereo/ by
installments.
<here there is a contract o/ sale o/ goods to be
delivered by stated instalments, which are to be
separately paid /or, and the seller makes de/ective
deliveries in respect o/ one or more instalments, or the
buyer neglects or re/uses without 0ust cause to take
delivery o/ or pay /or one or more instalments, it
depends in each case on the terms o/ the contract and
the circumstances o/ the case, whether the breach o/
contract is so material as to 0usti/y the in0ured party in
re/using to proceed /urther and suing /or damages /or
breach o/ the entire contract, or whether the breach is
severable, giving rise to a claim /or compensation but
not to a right to treat the whole contract as broken.
L.G Lenerally 'o Eelivery ,y ;nstallments .easonG
performance must generally e complete.
2xception to .uleG express provisions.
<hat if the delivery is defective, what are the rules+
a. ;f delivery is defective and it a:ect the totalityN
whole of installments of the S/, you may as3ed for
rescission and damages
. ;f delivery is defective only on parts on
installemsnt, you cannot resort to rescission ut only
damages arising on the defective delivry.
c. 2xample, if the "
st
installment is o3 then and C
nd
hindi, dapat parin idelivery yung 3
rd
and #
th
. So no
recession here. ,ut then you can as3 for damages sa
mga defective installments.
7*< A,*K0 ;! 072 ,K?2. .2!KS2S 0* @A? 072
.2/A;';'L ;'S0A6/2'0S+
L.> ?ou cannot treat the contract ro3en. Again, you can
still demand payment only to those installments
defective payments. *f couse an agreement can e
entered y the parties such as an acceleration clause.
.ememer, failure to pay " and C installments would
result to the demandaility of the whole oligation.
Article 4568. <here goods are delivered to the buyer,
which he has not previously e&amined, he is not
deemed to have accepted them unless and until he has
had a reasonable opportunity o/ e&amining them /or the
purpose o/ ascertaining whether they are in con/ormity
with the contract i/ there is no stipulation to the
contrary.
;nless otherwise agreed, when the seller tenders
delivery o/ goods to the buyer, he is bound, on request,
to a7ord the buyer a reasonable opportunity o/
e&amining the goods /or the purpose o/ ascertaining
whether they are in con/ormity with the contract.
<here goods are delivered to a carrier by the seller, in
accordance with an order /rom or agreement with the
buyer, upon the terms that the goods shall not be
delivered by the carrier to the buyer until he has paid
the price, whether such terms are indicated by marking
the goods with the words =collect on delivery,= or
otherwise, the buyer is not entitled to e&amine the
goods be/ore the payment o/ the price, in the absence
o/ agreement or usage o/ trade permitting such
e&amination.
Acceptance on the part of the vendee when
delivery is o:ered to the uyer. ;f there is an
examination of the uyer, then meron talagang delivery.
(rt. 45>6 accords the buyer the right to a reasonable
opportunity to e&amine the goods to ascertain whether
they are in con/ormity with the contract. )uch
opportunity to e&amine, however, should be availed o/
within a reasonable time in order that the seller may not
be sub0ected to undue delay or pre0udice in the payment
o/ his raw materials, workers and other damages which
may be incurred due to the deterioration o/ his
products. -he buyer is deemed to have accepted the
goods when, a/ter the lapse o/ a reasonable time he
retains them without intimating to the seller that he has
re0ected them.
<72' ,K?2. 7AS '* .;L70 0* 2WA/;'
<hen there is a stipulation to this e:ect. (Art.
"$%#, par. ").
<hen the goods are delivered C.*.E.( Cash on
delivery) \ unless there is an agreement or a usage of
trade @2./;00;'L such examination. (Art. "$%#, par. C).
;n case of a C*E, and the uyer is denies to his
right to examine, the ownership will still pass to the
uyer. 0herefore, the uyer will still ears the loss.
'evertheless, the uyer will e given an opportunity to
examine the goods after payment. And if he sees the
goods are inconsistent, it can ma3e the seller liale for
reach.
.;L70 0* 2WA/;'2> is not asolute right in the sense
that it can e made upon the re-uest of the uyer. ;f the
uyer refuses or waives this rights y exercising acts of
ownership over the matter, then that is considered as
delivery so may transfer nah.
'oteG failure of the uyer to inspect due to un&usti)ed
refusal of the seller, then there can e recession. *f
course this right must e made upon a reasonale time.
<hat is reasonale time+ ;t will depend of the
circumstances of the case.
Article 4565. -he buyer is deemed to have accepted
the goods when he intimates to the seller that he has
accepted them, or when the goods have been delivered
to him, and he does any act in relation to them which is
inconsistent with the ownership o/ the seller, or when,
a/ter the lapse o/ a reasonable time, he retains the
goods without intimating to the seller that he has
re0ected them.
2xpress acceptance
Article 456;. In the absence o/ e&press or implied
agreement o/ the parties, acceptance o/ the goods by
the buyer shall not discharge the seller /rom liability in
damages or other legal remedy /or breach o/ any
#age 2# of 33
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COVERAGE)
promise or warranty in the contract o/ sale. %ut, i/, a/ter
acceptance o/ the goods, the buyer /ails to give notice
to the seller o/ the breach in any promise o/ warranty
within a reasonable time a/ter the buyer knows, or
ought to know o/ such breach, the seller shall not be
liable there/or.
2ven if ,uyer Accepts, Seller Can Still ,e 6iale
.eason for the last sentence. 0o prevent
afterthoughts or elated claims.
0he uyer is allowed to set up the reach of
the war> ranty or promise as a set>o: or counterclaim for
the price.
2xceptionG ;f there has een an inaction on the part of
the uyer for a considerale length of time.
Article 456<. ;nless otherwise agreed, where goods
are delivered to the buyer, and he re/uses to accept
them, having the right so to do, he is not bound to
return them to the seller, but it is su?cient i/ he noti.es
the seller that he re/uses to accept them. I/ he
voluntarily constitutes himsel/ a depositary thereo/, he
shall be liable as such.
2:ect if ,uyer Iusti+aly .efuses to Accept the Eeliv> ery
uyer has no duty to return the goods to the
seller
mere noti+cation to seller of refusal will suf+ce
ut uyer may ma3e himself a voluntary
depositary QQ in which case he must safely ta3e care of
them in the mean time
Article 4566. I/ there is no stipulation as speci.ed in
the .rst paragraph o/ article 45@A, when the buyerBs
re/usal to accept the goods is without 0ust cause, the
title thereto passes to him /rom the moment they are
placed at his disposal
"$C3 refers to the delivery of carriage
2:ect if ,uyer Kn&usti+aly .efuses to Accept
the Eelivery Lenerally, the uyer ecomes the owner.
2xception \ when there is a contrary
stipulation or when the seller reserves the ownership as
a sort of security for the payment of the price.
Article 456=. -he vendee shall owe interest /or the
period between the delivery o/ the thing and the
payment o/ the price, in the /ollowing three casesC
4" )hould it have been so stipulated8
@" )hould the thing sold and delivered produce /ruits or
income8
A" )hould he be in de/ault, /rom the time o/ 0udicial or
e&tra0udicial demand /or the payment o/ the price.
a. 0his refers to the interest.
<72' ,K?2. 7AS 0* @A? !*. ;'02.2S0 *' 072 @.;C2>
0his Article answers the -uestionG =;n what cases is the
uyer liale for interest on the price+A
Llowing'oteG ;f the uyer fails to give the money after
the contract is notarized, although he had previously
promised to do so, there is default with liaility for legal
interest. (Ee la Cruz v. 6egaspi, 6>%4C#, 'ov. C5, "5$$).[
072 07.22 CAS2S C*'02/@6A02E
". ;n 'o. ("), no demand is needed.
C. ;n 'o. (C), the reason for the law is that the fruits
or income is suf+cient to warrant the payment of inter>
est.
3. ;n 'o. (3), =defaultA is mora, called =in delayA
under the provisions of the Civil Code.
.K62 !*. /*'20A.? *,6;LA0;*'S > ;n a monetary
oligation (li3e the oligation to pay the purchase price)
in the asence of stipulation, legal interest ta3es the
place of damages. 0his is so even if the damages are
actually more or less. 0he possiility of gain ecause of
an investment should e discountedM instead of a gain,
there might e a loss. 0herefore, the law has
compromised on legal interest. (Uuiros v. 0an Luinlay, 1
@hil. 18$).
Article 45=9. )hould the vendee be disturbed in the
possession or ownership o/ the thing acquired, or should
he have reasonable grounds to /ear such disturbance,
by a vindicatory action or a /oreclosure o/ mortgage, he
may suspend the payment o/ the price until the vendor
has caused the disturbance or danger to cease, unless
the latter gives security /or the return o/ the price in a
proper case, or it has been stipulated that,
notwithstanding any such contingency, the vendee shall
be bound to make the payment. ( mere act o/ trespass
shall not authori3e the suspension o/ the payment o/ the
price.
<72' ,K?2. /A? SKS@2'E 072 @A?/2'0 *! 072
@.;C2+ 0he uyer may SKS@2'E the payment of the
price ifG
". 0here is a well>grounded fear (fundado temor).
C. 0he fear is ecause ofG
a a vindicatory action or action to recover, or
a foreclosure of mortgage.
'*02G (a) 0he fear must not e the result of any other
ground, li3e the vendor(s insanity. () A mere act of
trespass is made y one claiming no legal right
whatsoever. 7ere, the uyer is not authorized to
suspend the payment of the price.[
-ROB.EM: S sold and delivered to , a parcel of land
for @C million payale within 34 days from the date of
the contract. Soon after the sale, W claims ownership
over the land y virtue of a prescriptive title. /ay ,
suspend the payment of price+ <hy+ ;f, in order to
avoid troule, , pays o: W to settle the latter(s claim to
the land, may , recover the amount paid as against S
upon S(s warranty in case of eviction+ .eason. ANS.G
?es, , may suspend the payment of the price ecause of
a reasonale fear that an accion reivindicatoria will e
rought against him. ;t is not necessary that the
vindicatory action has already een roughtG reasonale
fear thereof is suf+ cient. ("4 /anresa C8#>C81, C%4>
C%"). Should , and W come to an amicale settlement, ,
cannot recover from S ecause there really was no
eviction. , was indeed not deprived of the thing
purchased.
Article 45=4. )hould the vendor have reasonable
grounds to /ear the loss o/ immovable property sold and
its price, he may immediately sue /or the rescission o/
the sale.
)hould such ground not e&ist, the provisions o/ article
44:4 shall be observed.
a. 'oteG when can "$5" e applied+ *nly when
there is 6*SS of an immovale property. Anong meron
the "$54+ *nly disturance of possession or ownership
or reasonale fear for disturance.
. 7ere in "$5", there can e a ground for
rescission of the sale.
<72' S2662. /A? ;//2E;A026? SK2 !*. 072
.2SC;SS;*' *! 072 SA62 >0he seller must have
reasonale grounds to fearG
(a) 6*SS of the immovale property sold, and
() 6*SS of the price. So, if the uyer is s-uandering
his money, ut the immovale property remains
untouched, this article can> not apply.
;f neither ground exists, Art. ""5" applies. Art. ""5"
providesG =0he power to rescind oligations is implied in
reciprocal ones, in case one of the oligors should not
comply with what is incument upon him. 0he in&ured
party may choose etween the ful+llment and the
rescission of the oligation, with the payment of
damages in either case. 7e may also see3 rescission,
#age 21 of 33
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COVERAGE)
even after he has chosen ful+ llment, if the latter should
ecome impossile. =0he court shall decree the
rescission claimed, unless there e &ust cause
authorizing the + xing of a period. =0his is understood to
e without pre&udice to the rights of third persons who
have ac-uired the thing, in accordance with articles
"3%$ and "3%% and the /ortgage 6aw.A
Article 45=7. In the sale o/ immovable property, even
though it may have been stipulated that upon /ailure to
pay the price at the time agreed upon the rescission o/
the contract shall o/ right take place, the vendee may
pay, even a/ter the e&piration o/ the period, as long as
no demand /or rescission o/ the contract has been made
upon him either 0udicially or by a notarial act. (/ter the
demand, the court may not grant him a new term.
a. 0his is only applicale on sale of immovale
property. 2ven if there is a failure to pay the price
agreed uponXX rescsion ta3es place, pwede parin daw
magayad c vendee even after the expiration of period
until walang demand ng rescission of contract. Eemand
for rescission under "$5C must e made &udicially or
upon a notarial act. After the demand the court may not
grant him new term.
.e-uisitesG
". *nly to a contract of sale involving real property.
Eli pwede contract to sell.
C. ;f what is involved is a sale of immovale
property in installments , in which you will apply the
maceda law, then you apply the maceda law and not the
"$5C.
3. 7ere the rescicion is not automatic. Eapat may
demand parin.
LlowingLloria'oteG from @arasG 0his is only applicale to
a sale of real property, not to a contract 0* S266 real
property or to a promise 0* S266 real property, where
title remains with the vendor until ful+llment of a
positive suspensive condition, such as the full payment
of the price. (/anuel v. .odriguez, 6>"3#31, Iul. C8,
"514). ;n the contract 0* S266, where ownership is
retained y the seller and is not to pass until the full
payment of the price, such payment is a positive
suspensive condition, the failure of which is not a
reach, casual or serious ut an event that prevents the
oligation of the vendor to convey title from ac-uiring
inding force. 0o argue that in case of failure to pay
there is only a casual reach is to proceed from the false
assumption that the contract is one of asolute sale,
where non>pay> ment a mere resolutory condition.
a. 0his article applies whether or not there is a
stipulation for automatic rescission. 0he law says =even
though.A
. 0he demand may eG ") &udicial C) extra&udicial
(this must however e y notarial act).
c. the demand is not for the payment of the price,
ut for the .2SC;SS;*' of the contract. ("4 /anresa
C%%). ;f the demand for such rescission comes only
A!02. the o:er to pay the alance (accompanied y a
postal money order for the amount due), the automatic
rescission cannot of course legally ta3e place. (/aximo,
et al. v. !aian, et al., 6>%4"$, Eec. C3, "5$$). (e) 0he
demand is not for the payment of the price ,K0 for the
.2SC;SS;*' of the contract. (/anresa, Jol. "4, p. C%%).
E/AM-.E of this Article
*n Iul. ", A sold , a piece of land, payment and delivery
to e made on Iul. "$. ;t was stipulated that should
payment not e made on Iul. "$, the contract would
automatically e rescinded. *n Iul. C4, can , still pay+
A'S.G ?es, as long as there has een no &udicial or
notarial demand for the rescission of the contract. ,ut if,
for example on Iul. "%, A had made a notarial demand
for such a rescission then , will not e allowed to pay
anymore, and the court may not grant him a new term.
072 E2/A'E '22E2E> ,e it noted that the demand is
not for the payment of the price inasmuch as the seller
precisely desires to rescind the contract. 0o say that it
should e the demand for the price would lead to the
anomalous paradoxical result of re-uiring payment from
the uyer for the very purpose of preventing him from
paying. ;t is, therefore, a demand for rescissionM the
term having expired, the seller does not want to
continue with the contract. (Jillareal v. 0an Ding, #3 @hil.
C$", citing "4 /anresa C%%).
Article 45=:. <ith respect to movable property, the
rescission o/ the sale shall o/ right take place in the
interest o/ the vendor, i/ the vendee, upon the e&piration
o/ the period .&ed /or the delivery o/ the thing, should
not have appeared to receive it, or, having appeared, he
should not have tendered the price at the same time,
unless a longer period has been stipulated /or its
payment.
.2SC;SS;*' *! SA62 *! @2.S*'A6 @.*@2.0?> 0his
article should apply only if the o&ect sold has not een
delivered to the uyer.
;f there has already een delivery, other articles, li3e
Art. ""5" would e applicale. ;n this case automatic
rescission is not allowed. An af+ rmative action is neces>
sary (Luevarra v. @ascual, "C @hil. 3""), the action eing
one to rescind &udicially, if the uyer refuses to come to
amicale settlement. (2scueta v. @ando, #C *.L., 'o. "",
p. C8$5).
E/AM-.E O, T0E ARTIC.E 0he seller and the uyer
agreed that payment and delivery would e made on Iul.
"$, at the uyer(s house. ;f the uyer does not appear
on said day, or having appeared, he should not have
tendered the price at the same time, then the sale can
e considered as automatically rescinded.
RIG0T: NOT OB.IGATION: TO RESCIN* ;f in a
contract the seller is authorized to rescind the sale in
case of reach, this does not necessarily mean that he is
oliged to do so. (.amirez v. Court of Appeals ] /uller
'ease, 6>1$31, Ian. C$, "5$1, $C *.L. 885).
E*CK/2'0S *! 0;062
Article 4;:;. In the preceding articles in this -itle
governing the sale o/ goods, unless the conte&t or
sub0ect matter otherwise requiresC
4" =Document o/ title to goods= includes any bill o/
lading, dock warrant, =quedan,= or warehouse receipt or
order /or the delivery o/ goods, or any other document
used in the ordinary course o/ business in the sale or
trans/er o/ goods, as proo/ o/ the possession or control
o/ the goods, or authori3ing or purporting to authori3e
the possessor o/ the document to trans/er or receive,
either by indorsement or by delivery, goods represented
by such document.
=Doods= includes all chattels personal but not things in
action or money o/ legal tender in the 2hilippines. -he
term includes growing /ruits or crops.
=*rder= relating to documents o/ title means an order by
indorsement on the documents.
=Euality o/ goods= includes their state or condition.
=)peci.c goods= means goods identi.ed and agreed
upon at the time a contract o/ sale is made.
#age 22 of 33
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COVERAGE)
(n antecedent or pre-e&isting claim, whether /or money
or not, constitutes =value= where goods or documents o/
title are taken either in satis/action thereo/ or as
security there/or.
@" ( person is insolvent within the meaning o/ this -itle
who either has ceased to pay his debts in the ordinary
course o/ business or cannot pay his debts as they
become due, whether insolvency proceedings have
been commenced or not.
A" Doods are in a =deliverable state= within the
meaning o/ this -itle when they are in such a state that
the buyer would, under the contract, be bound to take
delivery o/ them. n)
<7A0 are the purpose of these title+ Eocuments of title
therefore serve two (C) functionsG
a As evidence of the possession or control of the
goods descried thereinM and
As the medium of transferring title and pos>
session over the goods descried therein, without
having to e:ect actual delivery thereof.
<hat are the two forms of Eocuments
i 'egotiale
ii 'on>negotiale
Ne'ot&a%le> A document of title in which it is stated
that the goods referred to therein are deliverale =to
earer,A or =to orderA of any person named in such
document, is a negotiale document of title. So stated
sya na sa contract. 'egotiation y mere delivery , this
will transfer possession, and control over the goods.
Eelivery to a speci)c person or his order (negotiation y
endorsement ^delivery). 'oteG even if on the face of the
documents may na3alagay non> negotiale sya, it is still
negotiale if na3alagay earer sya or order. 6imiting
words in the title does not destroy negotiaility.
<hat if my *rder instrument+ <ell if may order
instrument 3ailangan meron syang endorsement. <hat
if meron order instrument pero wala syang
endorsement+ 0he e:ect would e it would e treated
as an assignment and not a negotiation.
Non-ne'ot&a%le > a document of title which does not
state that the goods referred to therein are deliverale
either to earer or to the order of any person named
therein, is a non>negotiale document of title.
'oteG 3ung meron dyan earer or order 3ahit na3alagay
non>negotiale, negotiale parin sya. Dung walang
na3alagay dyan na delivery to the earer or order, that
document is considered as non>negotiale.
<7A0 <;66 7A@@2'S ;! <2 7AJ2 A' K'AK07*.;_2E
'2L*0;A0;*'+ 0he validity of the negotiation of a
negotiale document of title is not impaired y the
following factsG
a 0hat the negotiation was a reach of duty on the
part of the person ma3ing the negotiationM
() 0hat the owner of the document was deprived of the
possession of the same yG
` loss ` fraud ` theft ` conversion `
accident ` mista3e ` duress
2xample earer 3ah, nawala mo ung document, sino na
ang magging earer, ung na3a3ita+ <hat if i>claim nya
nong earer ang goods sa warehouse what is the e:ect+
a. ;f the person who acted in good faith and
without notice of any irregularities, then the warehouse
is not liale.
.
NEGOTIATION 6S ASSIGNMENT
'egotiation Assignment 0ransferorN holder ac-uires title
to goods . here you can have a etter right than the one
who negotiated /erely steps the shoes of the assignor.
Ac-uires title to goods against transferor ,ailee has
direct oligation to holder as if directly dealt with him
Ac-uires right to notify ,ailee so that he ac-uires
oligation of ailee to hold goods for him
<A..A'0;2S *' '2L*0;A0;*' A'E ASS;L'/2'0 *!
E*CK/2'0S *! 0;062
A person who for value negotiates or transfers a
document of title y endorsement or delivery, including
one who assigns for value a claim secured y a
document of title, unless a contrary intention appears,
warrants thatG
(a) 0he document is genuineM
() 7e has a legal right to negotiate or transfer itM
(c) 7e has no 3nowledge of any fact which would impair
the validity or worth of the documentM
(d) 7e has a right to transfer the title to the goodsM and
(e) 0he goods are merchantale or + t for a par> ticular
purpose, whenever such warranties would have een
implied if the contract of the parties had een to
transfer without a document of title the goods
represented therey.C"
0he warranties of one who negotiates a negotiale
document of title, and one who assigns a non>negotiale
document of title are the same.
Knli3e under the 'egotiale ;nstruments 6aw which
imposes warranties on the endorser, Article "$"8 of the
Civil Code expressly states that =Zt[he indorsement of a
document of title shall not ma3e the indorser liale for
any failure on the part of the ailee who issued the
document or previous indorsers thereof to ful+ll their
respective oligations.A
Since the assignment of a document of title is covered
y the species =assignmentA under Chapter % of the 0itle
on Sales of the Civil Code, under Article "1C% thereof,
the sellerNassignor of the document of title also warrants
the existence and legality of the documents of title at
the time of sale, unless it has een sold as doutfulM ut
that he does not warrant the solvency of the detor (i.e.,
the ailee), unless it has een so expressly stipulated or
unless the insolvency was prior to the sale and of
common 3nowledge.
E26;J2.? 0* 072 CA..;2.
Art&$le 1511. A negotiale document of title may e
negotiatedG
(") ,y the owner thereofM or
(C) ,y any person to whom the possession or custody of
the document has een entrusted y the owner, if, y
the terms of the document the ailee issuing the
document underta3es to deliver the goods to the order
of the person to whom the possession or custody of the
document has een entrusted, or if at the time of such
entrusting the document is in such form that it may e
negotiated y delivery. (n)
Art&$le 151". A person to whom a negotiale document
of title has een duly negotiated ac-uires thereyG
(") Such title to the goods as the person negotiating the
document to him had or had aility to convey to a
purchaser in good faith for value and also such title to
the goods as the person to whose order the goods were
to e delivered y the terms of the document had or had
aility to convey to a purchaser in good faith for valueM
and
(C) 0he direct oligation of the ailee issuing the
document to hold possession of the goods for him
according to the terms of the document as fully as if
such ailee had contracted directly with him. (n)
By: -earl Canada
B4en &s Ma$eda la< a??l&$a%leE
6A.ARAO v. COURT O, A--EA.S
#age 23 of 33
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COVERAGE)
<hat is important here is that the /aceda law is
applicale even to a contract to sell.
?ou have to distinguish /aceda law from Art "$5C(wNc
applies only to contract of sale)
<hat is really involve in this case is a Eeed of
Conditional Sale which has characteristics similar to
contract to sell, and is not within the coverage of article
"$5C.
-AGTA.UNAN v. 6*A. *E MAN2ANO
<hat are the re-uirements under .A 1$$C+
;n this case the re-uisites were not complied.
Actual cancellation shall ta3e place after 34 days after
receipt y the uyer of the notice of cancellation or
demand for rescission. ;n this case, hindi yun yung
letter. .escission of the contract y a notarial act and
the second re-uisite upon full payment of rhe cash
surrender value.
<ith regard to installments, yung less than Cyears of
installments ang naayaran same din. 0he seller may
cancel after 34 days from receipt of notice of
cancellation, or demand of rescission y notarial act.
;n this case of @agtalunana there was already payment
of at least C annual installments that is why aside from
the re-uirement of notice there must also e the
payment of cash surrender value so that the
cancellation can ta3e e:ect.
Asence of any of those re-uisites walang cancellation.
Anong e:ect+ aaa @adayon ang contract +
(,ac3ground musicG +++ ^ rain..)
Ta>e note: cancellation does not ta3e e:ect upon
default of uyer in payment. ?ou are still entitled to a
grace period and kailangan pa ang notice of
cancellation and you count 34 days from the receipt of
that cancellation. And if it is C or more annual
instalments there must e payment of cash surrender
value.
CON*ITIONBARRANT+Condition is a future and
uncertain event which may or may not happen upon
which depends the rising or extinction of an oligation.;s
a collateral underta3ing in a contract of sale. ;nvolves a
real or personal property.0he existence of oligation
must e clearly stipulated y the parties.
Condition is attached upon the arrival of the oligation
of the seller to deliver the su&ect matter./ay e
express or implied, that if the property sold does not
possess the -ualities, the purchaser may even consider
the sale void or claim damages for reach of
warranty.<hen condition happens then the oligations
of the parties will arise..efers to the su&ect matter
itself.CATUNGA. v. RO*RIGUE2
0here was conditional deed of sale in this case and the
issue was whether there was violation on the principle
of mutuality of contracts.
Art&$le 1545. <here the oligation of either party to a
contract of sale is su&ect to any condition which is not
performed, such party may refuse to proceed with the
contract or he may waive performance of the condition.
;f the other party has promised that the condition should
happen or e performed, such )rst mentioned party
may also treat the nonperformance of the condition as a
reach of warranty.
<here the ownership in the thing has not passed, the
uyer may treat the ful)llment y the seller of his
oligation to deliver the same as descried and as
warranted expressly or y implication in the contract of
sale as a condition of the oligation of the uyer to
perform his promise to accept and pay for the thing.
(n);n this case the parties agreed that the alance shall
e payale in installments and then there is that
payale for $ million when the vendee has successfully
negotiated, secured and provided a .oad>right of way.
Fun yung condition ditto.
;f however, the ..o< could not e negotiated, the
vendee shall give notice to the vendor for them to re>
assess and solve the prolem and thin3 of other options.
Again you should ta3e not a condition imposed upon
perfection of the contract and condition imposed
merely on the performance of the oligation. !ailure to
comply on the )rst condition results in the failure of the
contract. !ailure on the second condition merely gives
the other party the option to not pursue the sale or to
waive the condition.
<e apply "$#$ here in the sense that, the party may
refuse to proceed with the contract. ;n other words, si
vendee hindi muna nya bayaran ang $ million kasi hindi
pa na negotiate ang road>right>of>way, or he may waive
the performance and voluntary sya magayad sa
vendor. Eitto the condition is imposed on the
performance of the oligation. So the contract of sale
was already perfected.
7ere it was not dependent on the sole will of the detor,
kailangan pa i-negotiate kasi may kailangan pa paalisin
for the road>right>of>way. So here, it was also dependent
upon the will of 3
rd
persons from whom the ..*< is
shall e negotiated. ;t is as well dependent on chance
ecause there is no guarantee that the vendee and the
3
rd
party landowners would come to an agreement with
regard to the ..*<.
!urther, in this case hindi naman na waive ang condition
y the vendee they &ust agreed to re>assess and solve
the prolem y ta3ing other options. So the court
decided that the action to rescind is not potestative. ,ut
here, .odriguez was given a 34>day period after )nality
of decision to negotiate the ..*<, ecause their
agreement did not )x for the period. So 3ung walang
ngyari within that period then there is another 34 days
to agree for another court of action. ;f discussions
proved futile after said 34 days then the vendee
(.odriguez) may exercise his right to rescind the
contract su&ect to the return of his downpayment. *r
with the ..*< and pay the alance of the purchase
price.
BARRANTIES - 1 Ty?es:
4. )>press-
Art&$le 154!. Any aFrmation of fact or any promise y
the seller relating to the thing is an express warranty if
the natural tendency of such aFrmation or promise is to
induce the uyer to purchase the same, and if the uyer
purchases the thing relying thereon. 'o aFrmation of
the value of the thing, nor any statement purporting to
e a statement of the sellerYs opinion only, shall e
construed as a warranty, unless the seller made such
aFrmation or statement as an expert and it was relied
upon y the uyer. (n).e-uisites for express warrantyG
a. AFrmation of fact or any promise y the
seller relating to the su&ect matter of saleM
. 'atural tendency of the aFrmation or
promise to induce the uyer to purchase the
sameM and
#age 24 of 33
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COVERAGE)
c. 0he uyer purchases the thing relying
on the aFrmation.
GoteG .e-uisites are important ecause in case of
reach, you can hold the seller liale for damages.
0ARRISON vs. NA6ARRO
0here was an express warranty in this case wherein
7arrison made an aFrmation that taxes were already
paid and such aFrmation was relied upon y the uyer.
7owever it turned out that di pa pala nabayran. So there
was reach of express warranty.
(ng nangyari ang uyer nalang ang nagbayad sa ,;.
and he demanded reimursement from 7arrison. ;n fact
he is also entitled to damages not &ust for the actual
with regard to the reimursement ut as well as other
damages ecause there was that reach of express
warranty.
7ere @. wouldn(t have purchase the su&ect matter
were it not for the petitioner(s assertion and assurance
that all taxes on its imported parts were already settled.
GoteG 'ot &ust in personal property ut especially in real
properties, chec3 the realty taxes para di na umabot sa
korte. /a3e a ac3ground chec3 efore entering into
contracts.
". ,mplied- <hether or not this is agreed
y the parties it exists in a contract of sale. ;t
constitutes a part of every contract of sale. *n
the other hand, implied warranties may e
modi)ed or suppressed y the agreement of the
parties.
Art&$le 154. 2viction shall ta3e place whenever y a
)nal &udgment ased on a right prior to the sale or an
act imputale to the vendor, the vendee is deprived of
the whole or of a part of the thing purchased.
0he vendor shall answer for the eviction even though
nothing has een said in the contract on the su&ect.
0he contracting parties, however, may increase,
diminish, or suppress this legal oligation of the vendor.
("#8$a)
a. Barranty t4at t4e seller 4as R&'4t
to Sell (Article "$#8 par"). 0his is the .ight to
sell at the time of consummation, warranty here
goes into the performance of the oligation.
Art&$le 154#. ;n a contract of sale, unless a contrary
intention appears, there isG
(") 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
uyer shall from that time have and en&oy the
legal and peaceful possession of the thingM
(C) An implied warranty that the thing shall e
free from any hidden faults or defects, or any
charge or encumrance not declared or 3nown
to the uyer.
0his article shall not, however, e held to render liale a
sheri:, auctioneer, mortgagee, pledgee, or other person
professing to sell y virtue of authority in fact or law, for
the sale of a thing in which a third person has a legal or
e-uitale interest. (n)
Art&$le 154. 2viction shall ta3e place whenever y a
)nal &udgment ased on a right prior to the sale or an
act imputale to the vendor, the vendee is deprived of
the whole or of a part of the thing purchased.
0he vendor shall answer for the eviction even though
nothing has een said in the contract on the su&ect.
a. 0he contracting parties, however, may
increase, diminish, or suppress this legal
oligation of the vendor. ("#8$a)Barranty
a'a&nst Ev&$t&on(Art "$#8 par." and Art "$#%)
1equisitesC
". 0here must already e a )nal &udgmentM
C. 0he vendee is deprived of the whole or
part of the thing purchasedM
3. ,asis of eviction is a right prior to the
sale or a right imputale to the vendor.
#. Seller has een summon in a suit for
eviction at the instance of the uyer and e
made a co>defendant or 3
rd
>party defendant y
the uyer who passed a 3
rd
>party complaint
(2scaler v CA)
ESCA.ER v. COURT O, A--EA.S
<hat is missing re-uisite in this case+ 6ast .e-.
;n this case the seller who reached the warranty
against eviction was made a party sa case.
7owever it is not suFcient the seller is noti)ed, here
they were ale to furnish the respondents with a copy of
the *pposition. ,ut they did not summon the seller in
the eviction case.
Again it is not suFcient that the seller has notice of that
)nal &udgment ut he must e summoned at the
instance of the vendee. ;n this case, wala, hindi siya
naging party sa case.
0he e:ect is there could e no reach of warranty
against eviction.
GoteG Associate last paragraph of Article "$#% with
"$$3. So, "$$3 is not contradictory sa last paragraph.
;t only tells us that when you exempt the vendor, or
such stipulation exempting the vendor from reach of
warranty against eviction such stipulation will only e
considered void if vendor acted in ad faith.
;n other words, aware sya na merong previous sale or
another person who has a right over the property. 0hey
agreed that in case of warranty against eviction walang
liaility si vendor. Since vendor is in ad faith pwede pa
rin syang habulin kasi aware sya of other persons who
have a right over the property.
Loing ac3 to other provisions, we have article "$#5
Art&$le 154(. 0he vendee need not appeal from the
decision in order that the vendor may ecome liale for
eviction. (n))ituationG A case for e&ectment against
vendee, na implead si vender as co>defendant. 0rial
court ruled that a 3
rd
party has a etter right over the
property. 'ow hindi inappeal ni uyer, can the seller
refuse to pay or e held liale for reach of warranty on
the asis na hindi inappeal ni vendee ang decision ng
lower court+ 'o.
<alang re-uirement sa # re-uisites na 3ailangan i>
appeal ni vendee para ma3ahaol ng reach of warranty
against eviction 3ay seller.
<hat is important is it must e y )nal &udgment
wherein the uyer is deprived y the property involved.
Another is Art "$$8G The %arranty cannot be
enorced until a ?nal 3udgment has been
rendered! %hereby the vendee loses the thing
acquired or a part thereo. .48691
#age 25 of 33
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COVERAGE)
<hen we say )nal &udgment it is )nal and executor. So
when there is appeal in CA or SC, pending that appeal
which may ta3e years wala pang )nal &udgment, then
you cannot yet go to the seller for reach of warranty.
Adverse -ossess&on o= -ro?erty
Art&$le 155). <hen adverse possession had een
commenced efore the sale ut the prescriptive period
is completed after the transfer, the vendor shall not e
liale for eviction. (n)<hy is the vendor here not liale
for eviction+ ,ecause as a general rule the uyer should
have interrupted the prescriptive period against the one
in adverse possession of the property.
,y virtue of inaction ng uyer he cannot say that the
seller already reached the warranty against eviction.
7owever the exception here is when the time left for the
interruption is too short for the uyer to e given full
opportunity to perform acts of interruption nevertheless
the seller is still liale for reach of warranty against
eviction.
So we are tal3ing aout properties here that are su&ect
to possession li3e adverse possession. 6i3e 3 years in
ad faith or "4 years in good faith.
6et say "4 years in good faith, efore the perfection of
the contract someody is already in adverse possession
thereof. $years for example, so may remaining na $
years. So the uyer has to interrupt this possession.
,ut if let us say, malapit na mag lapse yung period of
adverse possession li3e C months nalang ang naiwan for
a "4>yr prescriptive period now we can apply the
exception here. Since the tilme left is too short hindi na
mainterrupt ni uyer ang pagtakbo ng prescriptive
period he can still hold the seller liale for reach of
warranty against eviction.
So when is Art "$$4 applicale+
> <hen adverse possession started efore the
perfection of the sale and was completed after the
transfer.
> ;t is di:erent if the uyer 3new eforehand of
the ac-uisitive prescription, then the uyer has deemed
to have waived his right.
Art&$le 1551. ;f the property is sold for nonpayment of
taxes due and not made 3nown to the vendee efore
the sale, the vendor is liale for eviction. (n)
Art&$le 1551. 0he &udgment detor is also responsile
for eviction in &udicial sales, unless it is otherwise
decreed in the &udgment. (n)!ailure to pay real estate
taxes can e su&ect to sale y the government and the
vendor is liale for eviction.
<hat can the uyer demand from the seller in case of
reach of warranty against eviction+ Art "$$$
Art&$le 1555. <hen the warranty has een agreed
upon or nothing has een stipulated on this point, in
case eviction occurs, the vendee shall have the right to
demand of the vendorG
(") 0he return of the value which the thing sold
had at the time of the eviction, e it greater or
less than the price of the saleM
(C) 0he income or fruits, if he has een ordered
to deliver them to the party who won the suit
against himM
(3) 0he costs of the suit which caused the
eviction, and, in a proper case, those of the suit
rought against the vendor for the warrantyM
(#) 0he expenses of the contract, if the vendee
has paid themM
($) 0he damages and interests, and ornamental
expenses, if the sale was made in ad faith.
("#8%)!irst, so it is =return of the valueA at the
time of the eviction, it can e greater or less
than the price of the sale.
-art&al Ev&$t&on
<hat happens if there is partial eviction+
Art&$le 155!. Should the vendee lose, y reason of the
eviction, a part of the thing sold of such importance, in
relation to the whole, that he would not have ought it
without said part, he may demand the rescission of the
contractM ut with the oligation to return the thing
without other encumrances that those which it had
when he ac-uired it.
7e may exercise this right of action, instead of enforcing
the vendorYs liaility for eviction.
0he same rule shall e oserved when two or more
things have een &ointly 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. ("#85a);f the vendee could not have
ought the part to which he was evicted or the whole
without the part to which he is evicted, he can
rescission of the contract. ,ut he has to return the thing
wihout any encumrances when he ought it. *f course
he can choose to remain in possession of what he
purchased, ut he can demand the price of that portion
of which he has een evicted.
2wede rin i>rescind provided that he couldn(t have
ought the thing 3ung wala yung portion 3ung san na
evict sya. 7e may exercise his right of action instead of
enforcing vendor(s liaility for eviction.
0his is also applicale if you ought C or more thigns
&ointly sold for a lump sum.
2xG love irds> /amatay daw ang isa once mamatay din
ang isa.
Can there e a waiver of warranty against eviction+
?2S. ,ut the stipulation of waiver is void if the vendor
acted in ad faith.
Art&$le 1554. ;f the vendee has renounced the right to
warranty in case of eviction, and eviction should ta3e
place, the vendor shall only pay the value which the
thing sold had at the time of the eviction. Should the
vendee have made the waiver with 3nowledge of the
ris3s of eviction and assumed its conse-uences, the
vendor shall not e liale. ("#88)
1 ty?es o= <a&ver:
". #onsciente - if the vendee renounced
the right to warranty in case of eviction and
eviction should ta3e place, the vendor should
only pay the value which the thing sold had at
the time of eviction.
C. Intensionada H should the vendee have
made the waiver with the 3nowledge of the ris3s
of eviction and assumed its conse-uences, the
vendor shall not e laile.
So the voluntary renunciation without 3nowledge of the
ris3, that is only consciente.
Io3eG don(t confuse this with condensada. hala ka
uie. ?"
-OBER COMMERCIA. vs. CA
#age 26 of 33
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COVERAGE)
<hat do you really have here, warranty or condition+
<hy did it ecome an issue+ <as there a reach of
warranty against eviction+
So what we have here is a warranty against eviction.
,ut one re-uisite is missing which is deprivation of one(s
ownership hence, walang eviction na ngyari.
a. Barranty a'a&nst Non-a??arent
Serv&t@de
Art&$le 15!). ;f the immovale sold should e
encumered with any non>apparent urden or
servitude, not mentioned in the agreement, of such a
nature that it must e presumed that the vendee would
not have ac-uired it had he een aware thereof, he may
as3 for the rescission of the contract, unless he should
prefer the appropriate indemnity. 'either right can e
exercised if the non>apparent urden or servitude is
recorded in the .egistry of @roperty, unless there is an
express warranty that the thing is free from all urdens
and encumrances.
<ithin one year, to e computed from the execution of
the deed, the vendee may ring the action for
rescission, or sue for damages.
*ne year having elapsed, he may only ring an action
for damages within an e-ual period, to e counted from
the date on which he discovered the urden or
servitude. ("#%3a)<hat is an example of non>apparent
servitude+
>@rohiition against hig>rise uildings in particular
areas. 6i3e you can only up to $ storey high.
<hen is this non>apparent servitude applicale+
> ;mmovale sold should e encumered with any
non>apparent urden or servitude, not mentioned in the
agreement, of such a nature that it must e presumed
that the vendee would not have ac-uired it had he een
aware thereof.
2xG mag3apit>ahay, maganda ang view 3o so gawa ng
easement para meron prin a3ong view, speci)c height
lang. what happens if this immovale is sold to 3
rd

person and the easement is not mentioned in
agreement and hindi naman pwede i>assume ni uyer
na may ganung 3laseng servitude+
So there can e reach of warranty against non>
apparent servitude.
.emedies availaleG
a. .escission of the contractM or
. ;ndemnity
<hen to demand these remedies+
<ithin " year from the execution of the deed you can
demand rescission or damages. 7owever if more than "
year had lapsed, you can only )le an action for
damages. And the action for damages shall e counted
from the time you discover the urden or servitude.
> 7owever if the servitude is recorded in the
registry this warranty provided in "$14 does '*0 apply.
> 2xception to exceptionG nag express warranty si
vendor that the thing is free from all urdens and
encumrances.
a. Barranty a'a&nst 0&dden *e=e$ts
Art&$le 15!1. 0he vendor shall e responsile for
warranty against the hidden defects which the thing
sold may have, should they render it un)t for the use for
which it is intended, or should they diminish its )tness
for such use to such an extent that, had the vendee
een aware thereof, he would not have ac-uired it or
would have given a lower price for itM ut said vendor
shall not e answerale for patent defects or those
which may e visile, or for those which are not visile
if the vendee is an expert who, y reason of his trade or
profession, should have 3nown them. ("#%#a)<hen can
is there e reach against warranty of hidden defects+
". 0he defect must render the su&ect
matter un)t for the use for which it is intended
or diminished its )tness for such use.
a defect must e serious or importantM
defect must not e patentM
c defect exists at the time of the sale not
suse-uentlyM
d vendee must give notice of defect to
vendor within reasonale timeM and
e remedies must e rought within 1 mos
from delivery or #4 days from delivery in case of
animalsM and
". ?ou could have not ac-uired it or could
have given a lower price for it.
C. 7owever the vendor shall not e
answerale for patent defects or those which
are not visile if the vendee is an expert who y
reason of his profession should have 3nown
them.
3. 0here is no waiver of warranty against
hidden defects.
Art&$le 15!!. 0he vendor is responsile to the vendee
for any hidden faults or defects in the thing sold, even
though he was not aware thereof.
0his provision shall not apply if the contrary has een
stipulated, and the vendor was not aware of the hidden
faults or defects in the thing sold. ("#%$)So it is not a
defense for the vendor that he is not aware of the
hidden defects, he can still e liale for reach of
warranty even if he is not aware and even if he is in
good faith. Knless there is waiver and in good faith si
vendor, then you cannot sue anymore.
Re9ed&esG
Art&$le 15!#. ;n the cases of articles "$1", "$1C, "$1#,
"$1$ and "$11, the vendee may elect etween
withdrawing from the contract and demanding a
proportionate reduction of the price, with damages in
either case. ("#%1a)Art&$lesG
a. 15!1> warranty against hidden defects
. 15!1> implied warranty or condition to
the -uality or )tness of goods.
c. 15!4> -uality or )tness for a particular
purpose.
d. 15!5> implied warranty that the goods
are free from any defect that render them un>
merchantale which should not e apparent.
e. 15!!> hidden defaults wherein the
vendor is not aware thereof.
Re9ed&es:
#age 2 of 33
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COVERAGE)
a. <ithdraw from the contract (Accion
(eindivicatoria"M and
. @roportionate reduction of the price with
damages in either case (Accion *uanti
#inoris.
<hat happens if there is hidden defect however the
su&ect matter is eventually lost+
Art&$le 15!. ;f the thing sold should e lost in
conse-uence of the hidden faults, and the vendor was
aware of them, he shall ear the loss, and shall e
oliged to return the price and refund the expenses of
the contract, with damages. ;f he was not aware of
them, he shall only return the price and interest
thereon, and reimurse the expenses of the contract
which the vendee might have paid. ("#%8a)
Art&$le 15!(. ;f the thing sold had any hidden fault at
the time of the sale, and should thereafter e lost y a
fortuitous event or through the fault of the vendee, the
latter may demand of the vendor the price which he
paid, less the value which the thing had when it was
lost.
;f the vendor acted in ad faith, he shall pay damages to
the vendee. ("#%%a)Articles aove deal with the lost of
the property with hidden defects. 7owever ta3e note in
"$1%, the thing was lost ecause of the hidden defect
and the vendor was aware, so the vendor ares the lost.
;f the vendor was not aware of the defect ut the thing
was lost ecause of the defect then he shall only return
the price and the interest thereon and reimurse the
expenses of the contract which the vendee might have
paid.
2x. ?ou purchase an appliance with hidden defect in its
wirings li3e nasunog and so nawala. So you can apply
"$1%. Again distinguish whether the vendor was aware
of the hidden defect or not.
Sa "$15 the thing was lost either through fortuitous
event or fault of the vendee. 0he vendee may demand
from the vendor the price which he paid less the value
which the thing had when it was lost. ,ut if the vendor
acted in ad faith you can demand damages from him.
SU-ERCARS vs. ,.ORES
Article "$55 was also referred to in this case. So the
remediesG withdraw from the contract with damages
that is inhibitoriaM and demand the proportionate
reduction of the priceM demand from the seller the
return of the price and return the expenses from the
contract with damages. ;f the thing was lost ecause of
the hidden default and the seller was aware.
"$15 was also applied here.
Art&$le 15#). 0he preceding articles of this Susection
shall e applicale to &udicial sales, except that the
&udgment detor shall not e liale for damages.
("#%5a)
Art&$le 15#1. Actions arising from the provisions of the
preceding ten articles shall e arred after six months,
from the delivery of the thing sold. ("#54)Aove is self>
explanatory.
<e also have 4&dden de=e$ts on an&9als.
Art&$le 15#1. ;f two or more animals are sold together,
whether for a lump sum or for a separate price for each
of them, the redhiitory defect of one shall only give
rise to its redhiition, and not that of the othersM unless
it should appear that the vendee would not have
purchased the sound animal or animals without the
defective one.
0he latter case shall e presumed when a team, yo3e
pair, or set is ought, even if a separate price has een
)xed for each one of the animals composing the same.
("#5")
Art&$le 15#". 0he provisions of the preceding article
with respect to the sale of animals shall in li3e manner
e applicale to the sale of other things. ("#5C)
Art&$le 15#4. 0here is no warranty against hidden
defects of animals sold at fairs or at pulic auctions, or
of live stoc3 sold as condemned. ("#53a)
Art&$le 15#5. 0he sale of animals su:ering from
contagious diseases shall e void.
A contract of sale of animals shall also e void if the use
or service for which they are ac-uired has een stated
in the contract, and they are found to e un)t therefor.
("#5#a)
Art&$le 15#!. ;f the hidden defect of animals, even in
case a professional inspection has een made, should
e of such a nature that expert 3nowledge is not
suFcient to discover it, the defect shall e considered
as redhiitory.
,ut if the veterinarian, through ignorance or ad faith
should fail to discover or disclose it, he shall e liale for
damages. ("#5$)
Art&$le 15##. 0he redhiitory action, ased on the
faults or defects of animals, must e rought within
forty days from the date of their delivery to the vendee.
0his action can only e exercised with respect to faults
and defects which are determined y law or y local
customs. ("#51a)
Art&$le 15#. ;f the animal should die within three days
after its purchase, the vendor shall e liale if the
disease which cause the death existed at the time of the
contract. ("#58a)
Art&$le 15#(. ;f the sale e rescinded, the animal shall
e returned in the condition in which it was sold and
delivered, the vendee eing answerale for any in&ury
due to his negligence, and not arising from the
redhiitory fault or defect. ("#5%)
Art&$le 15). ;n the sale of animals with redhiitory
defects, the vendee shall also en&oy the right mentioned
in article "$18M ut he must ma3e use thereof within the
same period which has een )xed for the exercise of the
redhiitory action. ("#55)
Art&$le 151. 0he form of sale of large cattle shall e
governed y special laws. (n)So as a general rule yun
lang isang animal ang may warranty unless yung sa
case ng loveird, the vendee would not have purchase it
without the defect in one.
;n "$83, hindi kasali ditto ang uy>">ta3e>" ha. Anything
li3e you uy towels na i>gift sa wedding 7is]7er, so you
will not uy one if defective ang isa.
<hat is considered as redhiitory+ Article "$81.
<hat is prescriptive period+ 4) days ('oah(s time + )
Art&$le 15!1. ;n a sale of goods, there is an implied
warranty or condition as to the -uality or )tness of the
goods, as followsG
(") <here the uyer, expressly or y implication, ma3es
3nown to the seller the particular purpose for which the
goods are ac-uired, and it appears that the uyer relies
on the sellerYs s3ill or &udgment (whether he e the
grower or manufacturer or not), there is an implied
warranty that the goods shall e reasonaly )t for such
purposeM
(C) <here the goods are rought y description from a
seller who deals in goods of that description (whether
he e the grower or manufacturer or not), there is an
#age 2! of 33
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COVERAGE)
implied warranty that the goods shall e of
merchantale -uality. (n)
By: Ca9&lle Re9oroFa
Art&$le 15#4. 0here is no warranty against hidden
defects of animals sold at fairs or at pulic auctions, or
of live stoc3 sold as condemned.
Art&$le 15#5. 0he sale of animals su:ering from
contagious diseases shall e void. A contract of sale of
animals shall also e void if the use or service for which
they are ac-uired has een stated in the contract, and
they are found to e un)t therefor.
;n "$8$, we have discussed this in the su&ect matter
topic. <hy+ ecause the su&ect matter is not legal.
"$1C deals with implied warranties in the sale of goods.
this refers to )tness or -uality. 0hat is under warranty
against hidden defects on the things sold. <e have here
the case ofG
N@tr&9&A ,eeds vs CA
<hat was the su&ect matter here in the sale+
<as it the animals+ ;t is the feeds.
<hat was the contention regarding the deeds
here+
Can the spouses 2vangelista e still compelled
to pay the corporation+
0a3e note again for the reG@&s&tes =or 4&dden de=e$t
for reach of warranty and hidden defects to exist.
the defect must e hiddenM
the defect must exist at the time the sale was
madeM
the defect must ordinarily have een excluded
from the contractM
the defect, must e important (renders thing
K'!;0 or consideraly decreases !;0'2SS)M
the action must e instituted within the statute
of limitations
;n this case, the su&ect matter were the animal feeds.
@ina3ain nila yun sa animal, 3 months after the sale,
they were not ale to prove that the defect existed at
the time of the delivery. ;n fact, they were not ale to
prove that the cause thereof, the death of the animals
was the feed. 0a3e note that the defect must e present
at the time of the sale, proaility here of those feeds
to have een contaminated is very li3ely ecause it was
fed to the animals 3 mos after they were sold and
delivered. 7ere there was no liaility on the part of the
seller ecause the re-uisites are not present.
<ith regards to warranty, please also ta3e note of "$55G
Art&$le 15((. <here there is a reach of warranty y
the seller, the uyer may, at his electionG
(") Accept or 3eep the goods and set up against
the seller, the reach of warranty y way of
recoupment in diminution or extinction of the
priceM
(C) Accept or 3eep the goods and maintain an
action against the seller for damages for the
reach of warrantyM
(3) .efuse to accept the goods, and maintain an
action against the seller for damages for the
reach of warrantyM
(#) .escind the contract of sale and refuse to
receive the goods or if the goods have already
een received, return them or o:er to return
them to the seller and recover the price or any
part thereof which has een paid.
<hen the uyer has claimed and een granted
a remedy in anyone of these ways, no other
remedy can thereafter e granted, without
pre&udice to the provisions of the second
paragraph of article ""5".
<here the goods have een delivered to the
uyer, he cannot rescind the sale if he 3new of
the reach of warranty when he accepted the
goods without protest, or if he fails to notify the
seller within a reasonale time of the election to
rescind, or if he fails to return or to o:er to
return the goods to the seller in sustantially as
good condition as they were in at the time the
ownership was transferred to the uyer. ,ut if
deterioration or in&ury of the goods is due to the
reach or warranty, such deterioration or in&ury
shall not prevent the uyer from returning or
o:ering to return the goods to the seller and
rescinding the sale.
<here the uyer is entitled to rescind the sale
and elects to do so, he shall cease to e liale
for the price upon returning or o:ering to return
the goods. ;f the price or any part thereof has
already een paid, the seller shall e liale to
repay so much thereof as has een paid,
concurrently with the return of the goods, or
immediately after an o:er to return the goods in
exchange for repayment of the price.
<here the uyer is entitled to rescind the sale
and elects to do so, if the seller refuses to
accept an o:er of the uyer to return the goods,
the uyer shall thereafter e deemed to hold
the goods as ailee for the seller, ut su&ect to
a lien to secure the payment of any portion of
the price which has een paid, and with the
remedies for the enforcement of such lien
allowed to an unpaid seller y article "$C1.
($) ;n the case of reach of warranty of -uality,
such loss, in the asence of special
circumstances showing proximate damage of a
greater amount, is the di:erence etween the
value of the goods at the time of delivery to the
uyer and the value they would have had if they
had answered to the warranty. (n)
E/TINGUIS0MENT O, SA.E H1!))-1!1"I
Art&$le 1!)). Sales are extinguished y the same
causes as all other oligations, y those stated in the
preceding articles of this 0itle, and y conventional or
legal redemption. So what are the grounds under
olicon+
payment or performance
6oss of the su&ect matter
condonationNremission
confusionNmerger
compensation
novation
annulment
rescission
ful)llment of resolutory condition
conventional or legal redemption
#age 2" of 33
r$
COVERAGE)
'ow C 3inds of redemption, conventional discussed
under "14">"1"%, the other one legal.
Convent&onal: exercised y the seller, this right of
redemption. /ust e reserved and stipulated upon the
execution of contract of sale. Statute of frauds is
applicale, in other words it must e in writing. ;t cannot
e longer than "4years, however if the parties did not
provide for a period, the period provided y law is four
years.
Art&$le 1!)1. Conventional redemption shall ta3e place
when the vendor reserves the right to repurchase the
thing sold, with the oligation to comply with the
provisions of article "1"1 and other stipulations which
may have een agreed upon. ("$48) Jendor already
reserves the right to repurchase the thing sold. 0hey
entered into a contract of sale today. ;f we(re going to a
repurchase, dapat na3alagay doon a3o as seller shall e
entitled to repurchase or redeem the property from
today. ?an ang conventional redemption, agreed upon
y the parties and stipulated in the contract of sale.
ARTIC.E 1!)1. 0he contract shall e presumed to e
an e-uitale mortgage, in any of the following casesG
(") <hen the price of a sale with right to
repurchase is unusually inade-uateM
(C) <hen the vendor remains in possession as
lessee or otherwiseM
(3) <hen upon or after the expiration of the
right to repurchase another instrument
extending the period of redemption or granting
a new period is executedM
(#) <hen the purchaser retains for himself a
part of the purchase priceM
($) <hen the vendor inds himself to pay the
taxes on the thing soldM
(1) ;n any other case where it may e fairly
inferred that the real intention of the parties is
that the transaction shall secure the payment of
a det or the performance of any other
oligation.
;n any of the foregoing cases, any money, fruits, or
other ene)t to e received y the vendee as rent or
otherwise shall e considered as interest which shall e
su&ect to the usury laws. (n)<hy are we discussing
e-uitale mortgage here in conventional redemption+
you go to "143,
Art&$le 1!)". ;n case of dout, a contract purporting to
e a sale with right to repurchase shall e construed as
an e-uitale mortgage. (n)
Art&$le 1!)4. 0he provisions of article "14C shall also
apply to a contract purporting to e an asolute sale.
(n)<hat are the instances for the presumption of
e-uitale mortgage to arise+
".) @rice is inade-uate> we have discussed that gross
inade-uacy will not lead to invalidity of the contract of
sale. 7owever if it is unusually inade-uate, you can
have the prima facie presumption that what is entered
into y the parties is an e-uitale mortgage.
C.) Jendor remains in possession as a lessee> normally,
itransfer mo naman ang possession sa vendee.
3># refer to article
$.) Si vendor pa yung nagaayd ng taxes, paying the
taxes is the duty of the owner.
1.) <hen you say mortgage, collateral siya dia sa
oligation and when you prove that there is a det then
you can have that the contract was an e-uitale
mortgage.
3&n's -ro?ert&es vs Gal&do
0he SC said that it is not an e-uitale mortgage ut in
fact a perfected contract of sale.
<hat we have in "14C is only a presumption a prima
facie presumption, not conclusive. Again, you have to
provide proof that the intention of the properties was
really have that sale as a security of an oligation. So,
there must e an oligation efore you can raise the
presumption in "14C.
S?o@ses Ray9@ndo vs S?o@ses Bandon'
;S it necessary for all the circumstances under "14C e
present for an e-uitale mortgage e applicale+ NO.
0he presence of one instance along with the proof that
there is really an intention for the parties which is only
to secure the det of the vendor. ;n that case, you have
an e-uitale mortgage ecause the intention of the
parties was to secure the oligation. ?ou can apply "143
and "14# if may isa sa "14C.
0e&rs o= Reyes vs Reyes
;f you loo3 at this case, the issue is really with the
Dalusatang maiili muli executed y their heirs. 'ow
with that 3asulatan was it considered as a sale or
e-uitale mortgage+ 2-uitale mortgage.
Again if you loo3 at this case, ruled in C4"4, they were
tal3ing aout a contract executed years ago when the
redemption price was only $44 pesos and the ones who
)led were the heirs. <ith regard to property, conPicts
usually arise and sadly a numer of them involve the
relatives and na3asad pa yan, heirs na.
@lease ta3e note of "14C. Jery important provision.
<hat was entered into was an e-uitale mortgage ut
was denominated as sale with right of repurchase. *f
course the remedy here is reformation.
Art&$le 1!)5. ;n the cases referred to in articles "14C
and "14#, the apparent vendor may as3 for the
reformation of the instrument. (n)
Art&$le 1!)!. 0he right referred to in article "14", in
the asence of an express agreement, shall last four
years from the date of the contract.
Should there e an agreement, the period cannot
exceed ten years.
7owever, the vendor may still exercise the right to
repurchase within thirty days from the time )nal
&udgment was rendered in a civil action on the asis
that the contract was a true sale with right to
repurchase.0his deals with periods. Sale of right to
repurchase. ;f ;(m the seller, you(re the uyer and in the
contract stipulated ; had the right to repurchase the
property within C4 years from to day, up to ten years
lang ang valid. So ano ngayon+ *ctoer "8, C4"C, so
na3alagay dun up to C4 years, void a yung
#age 3# of 33
r$
COVERAGE)
repurchase+ 7indi. valid siya ut my right to repurchase
will end until C4CC. Alright, hindi C4 years, up to "4
years lang. 7e can stipulate, even &ust 1 months or two
wee3s for right of repurchase as long as it is clearly
stipulated.
7owever what happens if ; have the right to repurchase,
provided na siya sa contract ut, they did not provide
the period. 0he law says from the date of the contract.
So na3uha ninyo, yung # year and "4 year. @ag walang
na3alagay na right of redemption, conventional
redemption cannot exist, you cannot compel the uyer
to sell it ac3 to you. ecause again, there must e an
expressed reservation. 'ow if nag3aso 3ayo, lalis 3ayo
na right of repurchase, e-uitale mortgage. 'ow it turns
out na right of repurchase, saihin na uy "4 years na
man sora 3asi maagal ang 3aso from the time of
contract. 0a3e note of the )nal sentence, you still have
34 days from )nal &udgment to exercise the right of
repurchase.
Art&$le 1!)#. ;n case of real property, the consolidation
of ownership in the vendee y virtue of the failure of the
vendor to comply with the provisions of article "1"1
shall not e recorded in the .egistry of @roperty without
a &udicial order, after the vendor has een duly heard.
Art&$le 1!). 0he vendor may ring his action against
every possessor whose right is derived from the vendee,
even if in the second contract no mention should have
een made of the right to repurchase, without pre&udice
to the provisions of the /ortgage 6aw and the 6and
.egistration 6aw with respect to third persons.;n other
words, if you enter into a right of repurchase, it must e
annotated in the title, otherwise, si suse-uent uyer in
good faith cannot e compelled.
Art&$le 1!)(. 0he vendee is surogated to the vendorYs
rights and actions. ("$"")
Art&$le 1!1). 0he creditors of the vendor cannot ma3e
use of the right of redemption against the vendee, until
after they have exhausted the property of the vendor.
Art&$le 1!11. ;n a sale with a right to repurchase, the
vendee of a part of an undivided immovale who
ac-uires the whole thereof in the case of article #5%,
may compel the vendor to redeem the whole property,
if the latter wishes to ma3e use of the right of
redemption. ("$"3)
Art&$le 1!11. ;f several persons, &ointly and in the
same contract, should sell an undivided immovale with
a right of repurchase, none of them may exercise this
right for more than his respective share.
0he same rule shall apply if the person who sold an
immovale alone has left several heirs, in which case
each of the latter may only redeem the part which he
may have ac-uired. ("$"#)
Art&$le 1!1". ;n the case of the preceding article, the
vendee may demand of all the vendors or co>heirs that
they come to an agreement upon the repurchase of the
whole thing soldM and should they fail to do so, the
vendee cannot e compelled to consent to a partial
redemption. <hat you are entitled to redeem is only the
portion that you have sold. So, in other words if you are
a coowner of a property and you sold the property
undivided immovale property with right of repurchase
you can redeem only the portion you have sold. 2ven if
the original seller died, 3ahit ilang heirs pa yan after,
yung portion lang talaga ang pwede maredeem.
Art&$le 1!14. 2ach one of the co>owners of an
undivided immovale who may have sold his share
separately, may independently exercise the right of
repurchase as regards his own share, and the vendee
cannot compel him to redeem the whole property.;to
naman sa side ng vendee, he cannot compel the vendor
to redeem the entire property only that speci)c portion.
Art&$le 1!15. ;f the vendee should leave several heirs,
the action for redemption cannot e rought against
each of them except for his own share, whether the
thing e undivided, or it has een partitioned among
them.
,ut if the inheritance has een divided, and the thing
sold has een awarded to one of the heirs, the action for
redemption may e instituted against him for the
whole.So if the inheritance has already een divided. ;n
other words there has already een an extra&udicial
settlement, and the thing sold has een awarded to the
heirs, the action for redemption can e had against him
or the whole.
Art&$le 1!1!. 0he vendor cannot avail himself of the
right of repurchase without returning to the vendee the
price of the sale, and in additionG
(") 0he expenses of the contract, and any other
legitimate payments made y reason of the
saleM
(C) 0he necessary and useful expenses made on
the thing sold.<ith repurchase, not &ust the
price ut may also include the expenses of the
contract as well as necessary and useful
expenses.
Art&$le 1!1#. ;f at the time of the execution of the sale
there should e on the land, visile or growing fruits,
there shall e no reimursement for or prorating of
those existing at the time of redemption, if no indemnity
was paid y the purchaser when the sale was executed.
Should there have een no fruits at the time of the sale
and some exist at the time of redemption, they shall e
prorated etween the redemptioner and the vendee,
giving the latter the part corresponding to the time he
possessed the land in the last year, counted from the
anniversary of the date of the sale.<ith regards to
fruits, ta3e note when there was fruits. 2xecution of the
contract no reimursement. ;f at the time of
redemption, they shall e prorated.
Art&$le 1!1. 0he vendor who recovers the thing sold
shall receive it free from all charges or mortgages
constituted y the vendee, ut he shall respect the
leases which the latter may have executed in good faith,
and in accordance with the custom of the place where
the land is situated. <hat are the important things to
ta3e note of conditional redemption+
;t must e reserved.
*nly extinguishes oligations pertaining to the
contract of sale.
;t does not extinguish the contract of sale only
the oligations.
0his is *'6? A@@6;CA,62 to a contract of
sale.Eapat meron talagang purchase.
0he right to reac-uire the property sold in
conventional redemption provided he returns the price,
expenses necessary and useful and other stipulations
agreed upon y the party.
0he right to redeem must e incorporated in the
contract of sale, must e in writing ecause statute of
frauds is applicale.
@eriodG @eriod not provided ut stipulated na
may right of repurchaseG # years, Dung meron
#age 31 of 33
r$
COVERAGE)
stipulated, valid yan as long as hindi maglapas sa "4
years.
.EGA. RE*EM-TION J only a??l&$a%le to
$ontra$t o= sales
Art&$le 1!1(. 6egal redemption is the right to e
surogated, upon the same terms and conditions
stipulated in the contract, in the place of one who
ac-uires a thing y purchase or dation in payment, or
y any other transaction wherey ownership is
transmitted y onerous title. .ight to e surogated
upon the same terms and conditions stipulated in the
contract. <hen we tal3 aout legal redemption\
provided y law yung right to redeem. 'ow what are
these legal redemptions+
0he law provides for these instances ecause of pulic
policy as well as for pulic ene)t and convenience.
Art&$le 1). Should any of the heirs sell his hereditary
rights to a stranger efore the partition, any or all of the
co>heirs may e surogated to the rights of the
purchaser y reimursing him for the price of the sale,
provided they do so within the period of one month from
the time they were noti)ed in writing of the sale y the
vendor. Sai natin ,sale of future inheritance not valid.
@ag namatay na ang may ari ng property, the right of
the heir is already present. ;f they own the parcel of
land, 3ung wla pang partition, co>owner silang tatlo.
Anong meron sa "4%%, if e-ual silang lahat, for example
C sold the property to ?, ? is a stranger. 'ow what is the
e:ect+ A or , can redeem from ? as a co>heir.
<hen can they redeem it within 34 days upon notice of
the sale to the third person. 0hat is a situation of legal
redemption among co heirs. /ore or less ganun din with
regard to co>owners. sa "4%% 3asi sells his hereditary
rights, rights nya to a stranger efore partition. So any
or all co heirs can repurchase y reimursing the uyer.
@eriodG " month from the time the co>owners were
noti)ed y the sale.
Art&$le 1!1). A co>owner of a thing may exercise the
right of redemption in case the shares of all the other
co>owners or of any of them, are sold to a third person.
;f the price of the alienation is grossly excessive, the
redemptioner shall pay only a reasonale one.
Should two or more co>owners desire to exercise the
right of redemption, they may only do so in proportion
to the share they may respectively have in the thing
owned in common./ore or less same sya dito, instead
treating A , C as coheirs thay are co owners of such
property. So, what is the e:ect, i! one of the co owners
sells to ? a third person. A co owner may redeem the
property from ?. ;n fact, a and , can redeem the
property from ? in proportion to their share. ;f the price
of the redemption is grossly excessive, the
redemptioner should only pay the price that is
reasonale. <hat do you mean y that, a3a lang 3asi
gusto mag3apera sa C, 3si iredeem man, yung sora
paghatian nila ni ?.
Art&$le 1!11. 0he owners of ad&oining lands shall also
have the right of redemption when a piece of rural land,
the area o= <4&$4 does not eA$eed one 4e$tare, is
alienated, unless the grantee does not own any rural
land.
0his right is not applicale to ad&acent lands which are
separated y roo3s, drains, ravines, roads and other
apparent servitudes for the ene)t of other estates.
;f two or more ad&oining owners desire to exercise the
right of redemption at the same time, the owner of the
ad&oining land of smaller area shall e preferredM and
should oth lands have the same area, the one who )rst
re-uested the redemption.
ARTIC.E 1!11. <henever a piece of uran land which
is so s9all and so s&t@ated t4at a 9aDor ?ort&on
t4ereo= $annot %e @sed =or any ?ra$t&$al ?@r?ose
<&t4&n a reasona%le t&9e, having een ought merely
for speculation, is aout to e re>sold, the owner of any
ad&oining land has a right of pre>emption at a
reasonale price.
;f the re>sale has een perfected, the owner of the
ad&oining land shall have a right of redemption, also at a
reasonale price.
<hen two or more owners of ad&oining lands wish to
exercise the right of pre>emption or redemption, the
owner whose intended use of the land in -uestion
appears est &usti)ed shall e preferred.Ei:erentiate
"1C" and "1CC from co heirs and co owners. <ala pang
partition 3aya nga co>owned co heirs. 'gayon sa
ad&oining owners walang co ownership mag3tai lang
yung properties. 'ow one thing is to di:erentiate is the
type of land. ;a ang rule pag rural land "1C", ia pag
uran land "1CC.
RURA. .AN*: <hat happens here A and , ad&oining
owners, , sells property to W, what happens here when
can A exercise right to redeem+ .ural land should not
exceed more than " hectare unless the grantee does
not own any rural land .<hy do you have this+ ecause
it encourages maximum utilization of agri lands.
C or more ad&acent owners, you also have C on the
other side, , sold property to W, ".) owner of ad&oining
lot with smaller area shall e preferred. C.) if the sameG
the one who )rst re-uested.
Ei:erentiate sa co heirs ecause they can redeem it in
proportion to their share.
"1CCG URBAN .AN*: to lessen 4o@s&n' ?ro%le9s
Small uran land is situated that the portion cannot e
used or the protion ecome impracticale to use for a
certain period.
0he rule here is the one whose intended use is est
&usti)ed should e preferred. Ad&oining properties talaga
siya.
"1CC> .ight of preemption, you need not wait for the
sale to e perfected ago pag magexecute ang sale.
7indi na hintayin yung sale.
Art&$le 1!1". 0he right of legal pre>emption or
redemption shall not e exercised except within thirty
days from the notice in writing y the prospective
vendor, or y the vendor, as the case may e. 0he deed
of sale shall not e recorded in the .egistry of @roperty,
unless accompanied y an aFdavit of the vendor that
he has given written notice thereof to all possile
redemptioners.
0he right of redemption of co>owners excludes that of
ad&oining owners.0here must e notice in writing for the
34 day period to egin running.
AFdavit of the vendor, that is provided y the law ut is
not really done in practice.
#age 32 of 33
r$
COVERAGE)
;n case you are a co owner you are not informed you
can )le an action for reach of this provision.
A"",/@#)@T A@D &)A") @AT ,@C&+D)D.
#age 33 of 33

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