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SALES
SALE 5. Commutative; In some
A nominate contract whereby one of cases, aleatory (emptio spei);
the contracting parties obligates 6. Onerous.
himself to transfer the ownership of
and to deliver a determinate thing * Aleatory contract: one of the parties or
and the other to pay therefor a price both reciprocally bind themselves to give
certain in money or its equivalent. or to do something in consideration of
what the other shall give or do upon the
NOTES: Delivery and payment in a happening of an event which is uncertain,
contract of sale are so interrelated and or which is to occur at an indeterminate
intertwined with each other that without time. (Ex: Sale of sweepstakes ticket)
delivery of the goods there is no
corresponding obligation to pay. The two Contract to sell
complement each other. It is clear that exclusive right and privilege to
the two elements cannot be dissociated, purchase an object.
for the contract of purchase and sale is a bilateral contract whereby the
essentially a bilateral contract, as it gives prospective seller, while expressly
rise to reciprocal obligations. (Pio reserving the ownership of the
Barretto Sons, Inc. vs. Compania subject property despite delivery
Maritima, 62 SCRA 167). thereof to the prospective buyer
Neither is the delivery of the thing binds himself to sell the said property
bought nor the payment of the price exclusively to the prospective buyer
necessary for the perfection of the upon fulfilment of the condition
contract of sale. Being consensual, it agreed upon, that is, full payment of
is perfected by mere consent. the purchase price.
more in keeping with the commutative 1. Buyer receives the 1. Agent receives
character of the contract goods as owner the goods as goods
of the principal who
Goods which may be Object of Sale retains his ownership
over them
a. Existing goods goods owned or
2. Buyer pays the 2. Agent delivers
possessed by the seller. price the price which in
b. Future goods goods to be turn he got from his
manufactured, raised or acquired by buyer
the seller after the perfection of the 3. Buyer, as a 3. Agent can return
contract. general rule, cannot the goods in case he
NOTES: return the object is unable to sell the
sold same to a third
A sale of future goods is valid only as person
an executory contract to be fulfilled 4. Seller warrants 4. Agent makes no
by the acquisition and delivery of the thing sold warranty for which
goods specified. he assumes personal
While there can be sale of future liability as long as he
property, there can generally be no acts within his
donation of future property (Article authority and in the
name of the seller
751 Civil Code)
5. Buyer can deal 5. Agent in dealing
Future inheritance cannot be sold. with the thing sold with the thing
A contract of sale or purchase of as he pleases being received, must act
goods to be delivered at a future the owner and is bound
according to the
time, if entered into without the
instructions of the
intention of having any goods pass principal
from one party to another, but with
an understanding that at the
appointed time, the purchaser is Contract for Piece
Sale
merely to receive or pay the of Work
1. The thing 1. The thing
difference between the contract and
transferred is one transferred is one
the market prices, is illegal. Such not in existence and which would have
contract falls under the definition of which never would existed and would
futures in which the parties merely have existed but for have been the
gamble on the rise or fall in prices the order of the subject of sale to
and is declared null and void by law. party desiring to some other person,
(Art. 2018, NCC) (Onapal Phil. acquire it even if the order
Commodities, Inc. vs. CA [1993]) had not been given
2. The services 2. The primary
dominate the objective of the
Instances when the Civil Code
contract even contract is a sale of
recognizes sale of things not though there is a the manufactured
actually or already owned by the sale of goods item; it is a sale of
seller at the time of the sale: involved goods even though
1. Sale of a thing having potential the item is
existence (Article 1461) manufactured by
labor furnished by
2. Sale of future goods (Article 1462)
the seller and upon
3. Contract for the delivery at a certain previous order of
price of an article which the vendor the customer
in the ordinary course of the business 3. Not within the 3. Within the
manufactures or procures for the Statute of Frauds Statute of Frauds
general market, whether the same is
on hand at the time or not (Article
1467)
1. Actual or real placing the thing 2. If no period for payment has been
under the control and possession of fixed in the contract
the buyer. 3. Even if a period for payment has been
2. Legal or constructive delivery is fixed in the contract, if the vendee
represented by other signs or acts has lost the right to make use of the
indicative thereof same.
a. delivery by the execution
of a public instrument. Sale or return
NOTE: Gives rise only to a prima Property is sold, but the buyer, who
facie presumption of delivery which is becomes the owner of the property
destroyed when actual delivery is not on delivery, has the option to return
effected because of a legal the same to the seller instead of
impediment (Ten Forty Realty vs. paying the price.
Cruz, 10 Sept. 2003)
b. traditio symbolica - to
effect delivery, the parties make NOTES:
use of a token or symbol to It is a kind of sale with a
represent the thing delivered condition subsequent.
c. traditio longa manu The buyer must comply with the
seller pointing out to the buyer express or implied conditions
the things which are transferred, attached to the return privilege;
which at the time must be in otherwise, the sale becomes
sight. absolute.
d. traditio brevi manu Buyer, being the owner, bears
buyer simply continues in the risk of loss
possession of the thing but under
title of ownership. Sale on trial, approval, or satisfaction
e. traditio constitutum A contract in the nature of an option
possessorium seller continues in to purchase if the goods prove to be
possession but under a different satisfactory, the approval of the
title other than ownership. buyer being a condition precedent.
3. Quasi-tradition delivery of rights,
credits or incorporeal property, made
by: Rules:
a. placing titles of ownership in the 1. title remains in the seller
hands of buyer 2. risk of loss remains with seller
b. allowing buyer to make use of except when the buyer is at fault or
rights has agreed to bear the loss
4. Tradition by operation of law 3. buyer must give goods a trial, except
where it is evident that it cannot
Constructive delivery requires three perform the work
things before ownership may be 4. period within which buyer must
transferred: signify his acceptance runs only when
1. The seller must have control over the all the parts essential for the
thing operation of the object have been
2. The buyer must be put under control delivered.
3. There must be the intention to 5. if it is stipulated that a third person
deliver the thing for purposes of must satisfy approval or satisfaction,
ownership the provision is valid, but the third
person must be in good faith. If
When is the vendor not bound to refusal to accept is not justified,
deliver the thing sold: seller may still sue.
1. If the vendee has not paid him the 6. Generally, the sale and delivery to a
price buyer who is an expert on the object
where they are F.O.B. The point Vendor is obligated to deliver all the
of F.O.B., either at the point of land included within the boundaries,
shipment or the point of regardless of whether the real area
destination, determines when the should be greater or smaller
ownership passes.
NOTE: the terms C.I.F. and F.O.B.
Ordinarily, there can be no rescission
or reduction or increase whether the
merely make rules of presumption
area be greater or lesser, unless
c. C.O.D. (collect on there is gross mistake.
delivery) the carrier acts for NOTE: The Civil Code presumes that the
the seller in collecting the purchaser had in mind a particular piece
purchase price, which the buyer of land and that he ascertained its area
must pay to obtain possession of and quality before the contract of sale
the goods. was perfected. If he did not do so, or if
having done so he made no objection and
SELLERS DUTY AFTER DELIVERY TO consented to the transaction, he can
CARRIER blame no one but himself (Teran vs.
1. To enter on behalf of buyer into such Villanueva Viuda de Riosa 56 Phil 677).
contract reasonable under the What is important is the delivery
circumstances of all the land included in the boundaries.
2. To give notice to buyer regarding
necessity of insuring the goods DOUBLE SALE (Art. 1544)
PAYMENT OF THE PURCHASE PRICE Requisites: VOCS
GENERAL RULE: The seller is not bound two or more transactions must constitute
to deliver the thing sold unless the valid sales;
purchase price has been paid. they must pertain exactly to the same
object or subject matter;
EXCEPTION: The seller is bound to
they must be bought from the same or
deliver even if the price has not been
immediate seller; AND
paid, if a period of payment has been
two or more buyers who are at odds over
fixed.
the rightful ownership of the subject
matter must represent conflicting
Sale of Real Property by Unit
interests.
Entire area stated in the contract
must be delivered Rules of preference:
When entire area could not be 1. Personal Property
delivered, vendee may: a. first possessor in good faith
1. Enforce the contract with 2. Real Property
the corresponding decrease in a. first registrant in good
price faith
2. Rescind the sale: b. first possessor in good
a. If the lack in area is at faith
least 1/10 than that stated or c. person with oldest title in
stipulated good faith
b. If the deficiency in quality
specified in the contract NOTES:
exceeds 1/10 of the price Purchaser in Good Faith one who
agreed upon buys the property of another without
c. If the vendee would not have notice that some other person has a
bought the immovable had he right to or interest in such property
known of its smaller area of and pays a full and fair price for the
inferior quality irrespective same at the time of such purchase or
of the extent of lack of area before he has notice of the claim or
or quality interest of some other person in the
property (Veloso vs. CA).
Sale for a Lump Sum (A Cuerpo Cierto)
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
San Beda College of Law
127
at the time of its loss represents the 3. Sale by virtue of authority in fact or
damage suffered by the vendee and law
the amount which the vendor
enriched himself at the expense of Caveat Venditor (Let the seller
the vendee beware): the vendor is liable to the
If the vendor acted in bad faith: vendee for any hidden faults or defects in
vendor shall pay damages to the the thing sold, even though he was not
vendee aware thereof.
Unless otherwise agreed upon, 5. if the vendee has fully paid the price
acceptance of the goods by the buyer
does not discharge the seller from REMEDIES FOR BREACH OF CONTRACT
liability for damages or other legal A. Remedies of the seller
remedy like for breach of any 1. Action for payment of the price (Art.
promise or warranty 1595)
2. Action for damages for non-
When vendee may suspend payment of acceptance of the goods (Art. 1596)
the price: 3. Action for rescission (Art. 1597)
1. If he is disturbed in the possession or B. Remedies of the buyer
ownership of the thing bought 1. Action for specific performance (Art.
2. If he has well-grounded fear that his 1598)
possession or ownership would be 2. Action for rescission or damages for
disturbed by a vindicatory action or breach of warranty (Art 1599)
foreclosure of mortgage
A. REMEDIES OF THE SELLER FOR
NOTES: BREACH OF CONTRACT
If the thing sold is in the possession IN CASE OF MOVABLES
of the vendee and the price is already 1. Ordinary Remedies
in the hands of the vendor, the sale is a. Movables in General
a consummated contract and Article Failure of the vendee to appear
1590 is no longer applicable. Article to receive delivery or, having
1590, presupposes that the price or appeared, failure to tender the
any part thereof has not yet been price at the same time, unless, a
paid and the contract is not yet longer period for its payment has
consummated. been stipulated
Under Article 1590, the vendee has action to rescind the sale
no cause of action for rescission (Art. 1593)
before final judgement, otherwise b. Sale of Goods
the vendor might become a victim of action for the price (Art.
machinations between the vendee 1595)
and the third person
action for damages (Art.
Disturbance must be in possession 1596)
and ownership of the thing acquired 2. Unpaid Seller
If the disturbance is caused by the Types:
existence of non-apparent servitude, a. The seller of the goods
the remedy of the buyer is rescission, who has not been paid or to
not suspension of payment. whom the price has not been
tendered
b. The seller of the goods,
When vendee cannot suspend payment in case a bill of exchange or
of the price even if there is disturbance other negotiable instrument has
in the possession or ownership of the been received as conditional
thing sold: payment, AND the condition on
1. if the vendor gives security for the which it was received has been
return of the price in a proper case broken by reason of the dishonor
2. if it has been stipulated that of the instrument, insolvency of
notwithstanding any such the buyer or otherwise.
contingency, the vendee must make
Remedies:
payment (see Article 1548 par.3)
1. Possessory lien over the
3. if the vendor has caused the
goods
disturbance or danger to cease
2. Right of stoppage in
4. if the disturbance is a mere act of
transitu after he has parted with
trespass
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
San Beda College of Law
133
2. Where the right to resell 3. If the goods are not yet identified
is expressly reserved in case the at the time of the contract or
buyer should make a default subsequently
3. Where the buyer delays B. REMEDIES OF THE BUYER FOR
in the payment of the price for BREACH OF CONTRACT
an unreasonable time
1. Action for specific performance
IV. Rescission (Art. 1598)
Types: W
1. Special Right to Rescind here the seller has broken the
Under Art. 1534 If the seller has contract to deliver specific or
either the right of lien OR a right ascertained goods
to stop the goods in transitu AND T
under either of 2 situations: he judgment or decree may be
a. Where the right to unconditional, or upon such terms
rescind on default has been and conditions as to damages,
expressly reserved payment of the price and otherwise
b. Where the buyer has as the court may deem just
been in default for an
unreasonable time 2. Remedies of buyer for breach of
2. Under Art. 1597 warranty by seller (Art. 1599):
(technical rescission) 1. Recoupment accept the goods and
set up the sellers breach to reduce
V. Action for the price or extinguish the price
When may be exercised: 2. Accept the goods and maintain an
action for damages for breach of
1. Where the ownership has
warranty
passed to the buyer AND he 3. Refuse to accept the goods and
wrongfully neglects OR refuses to maintain an action for damages for
pay for the price breach of warranty
2. Where the price is 4. Rescind the contract by returning or
payable on a day certain AND he offering the return of the goods, and
wrongfully neglects OR refuses to recover the price of any part thereof
pay for the price, irrespective of NOTE: These are alternative remedies.
the delivery or transfer of title
3. Where the goods cannot When rescission by buyer not allowed:
readily be resold for a reasonable 1. if the buyer accepted the goods
price AND the buyer wrongfully knowing of the breach of warranty
refuses to accept them even without protest
before the ownership of the 2. if he fails to notify the seller within a
goods has passed, if Article 1596 reasonable time of his election to rescind
is inapplicable. 3. if he fails to return or offer to return
the goods in substantially as good
VI. Action for damages condition as they were in at the time of
When may be exercised: the transfer of ownership to him
1. In case of wrongful neglect or
refusal by the buyer to accept or EXTINGUISHMENT OF SALE
pay for the thing sold (Art. 1596 1. Same causes as in all other
par.1) obligations
2. In an executory contract, where 2. Conventional Redemption
the ownership in the goods has 3. Legal Redemption
not passed, and the seller cannot
maintain an action to recover the CONVENTIONAL REDEMPTION
price (Art 1595) The right which the vendor reserves
to himself, to reacquire the property
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John
Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony
Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
San Beda College of Law
137
provide a dwelling place and the property a. If rent is paid daily: lease is from
becomes uninhabitable. day to day
b. If rent is paid weekly: lease is
Effects if Lessor fails to make Urgent from week to week
Repairs c. If rent is paid monthly: lease is
1. Lessee may order repairs at the from month to month
lessors cost d. If rent is paid yearly: lease is
2. Lessee may sue for damages from year to year
3. Lessee may suspend the payment of
the rent RULES ON EXTENSION OF THE LEASE
4. Lessee may ask for rescission, in case PERIOD:
of substantial damage to him 1) If a lease contract for a definite term
allows lessee to extend the term, there is
TRESPASS IN LEASE: no necessity for lessee to notify lessor of
1. Trespass in fact (perturbacion his desire to so extend the term, unless
de mere hecho): the contrary is stipulated.
2) May be extended as stipulation:
physical
lessee can extend without lessors
enjoyment is reduced
consent but lessee must notify lessor.
Lessor will not be 3) May be extended for 6 years agreed
held liable. upon by both parties as stipulation: This
2. Trespass in law (perturbacion de must be interpreted in favor of the
derecho): lessee. Hence, ordinarily the lessee at
A third person claims the end of the original period may either:
legal right to enjoy the premises a) leave the
premises; or
Lessor will be held liable
b) remain in
possession
NOTE: While the Japanese Occupation
4) In co-ownership, assent of all is
was a fortuitous event, the lessor is still
needed; otherwise, it is void or
not excused from his obligation to
ineffective as against non-consenting co-
warrant peaceful legal possession. Lease
owners.
is a contract that calls for prestations
5) Where according to the terms of the
both reciprocal and repetitive; and the
contract, the lease can be extended only
obligations of either party are not
by the written consent of the parties
discharged at any given moment, but
thereto, no right of extension can rise
must be fulfilled all throughout the term
without such written consent.
of the contract. (Villaruel vs. Manila
Motor Co.)
Rule if Lessor Objects to the Lessees
continued Possession:
Duration of Lease
1. Lease made for a determinate time Requisites:
or fixed Period 1. Contract has expired
2. Lessee continued enjoying the thing
Lease will be for the said
3. Lessor Objected to this enjoyment
period and it ends on the day
fixed without need of a demand If the three requisites are
present, the lessee shall be
2. If there is no fixed period considered a possessor in bad faith
A. For Rural Lands (Article 1680)
IMPLIED NEW LEASE (Tacita
it shall be for all time
Reconducion)
necessary for the gathering of
fruits which the whole estate lease which arises if at the end of the
may yield in 1 year, or which it contract the lessee should continue
may yield once enjoying the thing leased for 15 days
B. For Urban Lands (Article 1687) with the acquiescence of the lessor,
unless a notice to the contrary had which provides that the lease contract
previously been given by either party. shall continue for an indefinite period
provided that the lessee is up-to-date in
Requisites: the payment of his monthly rentals for
a. the term of the original the contract is one with a period subject
contract has expired to a resolutory condition.
b. the lessor has not given
the lessee a notice to vacate PURCHASE OF THE LEASED PROPERTY
c. the lessee continued GENERAL RULE: Purchaser of thing
enjoying the thing leased for at leased can terminate lease.
least 15 days with the EXCEPTIONS:
acquiescence of the lessor a. lease is recorded in
Registry of Property
When there is no implied new lease: b. there is stipulation in the
1. When before or after the contract of sale that purchaser
expiration of the term, there is a shall respect the lease
notice to vacate given by either c. purchaser knows the
party. existence of the lease
2. When there is no definite fixed d. sale is fictitious
period in the original lease contract
as in the case of successive renewals.
e. sale is made with right of
repurchase
Effects: GROUNDS FOR EJECTMENT UNDER ART.
a. The period of the new 1673: (ELVU)
lease is not that stated in the
1. Expiration of the period agreed upon
original contract but the time in
or the period under Arts. 1682 and
Articles 1682 and 1687.
1687;
b. Other terms of the
original contract are revived. 2. Lack of payment of the price
stipulated;
NOTE: Terms that are revived are only 3. Violation of any of the conditions
those which are germane to the agreed upon in the contract; and
enjoyment of possession, but not those 4. Unauthorized use or service by the
with respect to special agreements lessee of the thing leased.
NOTE: In Jespajo Realty vs. CA, 27 Sept. Grounds for judicial ejectment:
2002, the SC upheld a lease contract, SANORE
7. People v. Cortez