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OTHER PERSON RELATIVELY INCAPACITATED TO BUY Option to purchase if the goods prove satisfactory. The approval of
the buyer is a condition precedent to the contract of sale.
1. Guardian
2. Agents SALE OR RETURN SALE ON TRIAL OR APPROVAL
3. Executors and administrators Subject to resolutory condition. Subject to suspensive
4. Public officers and employees condition.
5. Justices, judges, prosecuting attorneys, clerks and employees of Depends on the will of the Depends on the character or
court buyer. quality of the goods.
6. Others disqualified by law Ownership of the goods passes Ownership remains with the
to the buyer on delivery, and seller until the buyer signifies
PROHIBITIONS EXTENDS TO SALES IN LEGAL REDEMPTION, reverts back to the seller when his approval or acceptance
the goods are returned.
COMPROMISES, AND RENUNCIATIONS
Risk of loss rests upon the buyer Risk of loss rest upon the seller
1. Legal redemption
2. Compromise
TRANSFER OF OWNERSHIP
3. Renunciation
General rule: Ownership of goods passes to the buyer
EFFECT OF LOSS OF THING AT THE TIME OF SALE
upon delivery.
1. Thing is entirely lost at the time of perfection of the contract
Exceptions:
- Inexistent and void
2. Thing is only partially lost 1. If seller reserves the right of possession or ownership
- Vendee may withdraw from the contract in the goods until certain conditions are fulfilled.
- Demand the remaining part, paying its price in proportion 2. If seller deliver the goods to carrier but failed to enter
to the total sum agreed upon. on behalf of buyer such contract as maybe reasonable
to prevent lost or damage to the goods.
EFFECT OF LOSS IN CASE OF SPECIFIC GOODS
3. If the seller fails to give notice to the buyer regarding
the necessity to insure the goods.
1. Buyer may avoid the sale.
4. If the goods are deliverable to the seller or his agent
2. May treat sale as valid with respect to the existing goods.
or the order of the seller as indicated in the bill of
PRINCIPAL OBLIGATIONS OF THE VENDOR lading.
5. If goods are shipped to the buyer but the seller
1. Transfer ownership of determinate thing retains possession of the bill of lading.
2. Deliver the thing 6. If the buyer transmit to the seller the bill of exchange
3. Warrant against eviction and hidden defects together with the bill of lading but does not honor the
4. Preserve thing from perfection to delivery bill of exchange.
5. Pay for the execution and registration of the sale unless there is
a contrary agreement.
RISK OF LOSS BY FORTUITOUS EVENT FUNCTIONS OF DOCUMENTS TITLE
General Rule: If the thing is lost by fortuitous event the risk is borne It serves as evidence of:
by the owner of the thing at the time of the loss.
1. Transfer of title
2. Transfer of possession
Exceptions:
3. Contract between parties who are bound by its terms
1. If goods are delivered to the buyer but seller retains ownership
merely to secure performance by the buyer of his obligations
MOST COMMON FORMS OF DOCUMENTS OF TITLE
under the contract.
2. If actual delivery has been delayed through the fault of either Bill of Lading
the buyer or the seller, the goods are at the risk of the party in
default. Contract or receipt for the transport of goods and their delivery to
the person named therein, to order, or to bearer.
SALE OF A PERSON NOT THE OWNER
Dock Warrant
General Rule:
Instrument given by the dock owner to an importer of goods
If the seller has no authority or consent from the owner the buyer warehoused on the dock recognizing the importer’s title to the said
acquires no better right or title to the goods than the seller. goods.
No one can give what he has not. Contract or receipt for goods deposited with a warehouseman
containing the latter’s undertaking to hold and deliver the said
No one can sell what he does not own.
goods to a specified person. to order, or to bearer.
Exceptions:
NETIOTIATION OF NEGOTIABLE DOCUMENT BY INDORSEMENT
1. If the owner of the goods is, by his conduct, precluded from
1. If indorsed in blank or to bearer
denying the seller’s authority to sell.
- The document becomes negotiable by delivery.
2. If the law enables the apparent owner to dispose of the goods
2. If indorsed to a specified person
as if he were the true owner thereof.
- it may again be negotiated by the indorsement of such
3. If the sale is sanctioned statutory or judicial authority
person in blank, to bearer, or to another specified person.
4. If the sale is made at merchant’s store, fairs, or markets.
5. If the seller has voidable title which has not been avoided at the PERSON WHO MAY NEGOTIATE A NEGOTIABLE DOCUMENT
time of sale.
6. If the seller subsequently acquires the title to the goods. 1. The owner thereof
2. Any person to whom the possession or custody thereof has been
SALE BY ONE HAVING A VOIDABLE TITLE entrusted by the owner:
a. If the term of the document is to deliver the goods to the
The buyer acquires title to the goods provided the following
order of the person in possession thereof or to bearer
requisites are present:
b. If the document is in such form that it may be negotiated by
delivery
1. He buys them before the title of the seller has been avoided.
2. He buys them in good faith and for value.
RIGHT OF PERSON TO WHOM DOCUMENT HAS BEEN NEGOTIATED
3. Without notice of the seller’s defect of title.
1. The title of the person negotiating the document over the goods
CLASSES OF DOCUMENTS OF TITLE
covered by the document
2. The title of the person (depositor or owner) to whose order by
Negotiable Document of Title
the terms of the document the goods were to be delivered, over
A document of title in which it is stated that the goods referred to such goods.
therein will be delivered to the bearer, or to the order of any person 3. The direct obligation of the bailee to hold possession of the
named in such document. goods for him, as if the bailee had contracted to him directly.
1. Right to the goods as against the transferor PAYMENT OF THE PURCHASE PRICE
2. Right to compel the transferor to indorse the document
General rule:
WARRATIES ON SALE OF DOCUMENTS
The seller is not bound to deliver the thing sold unless the purchase
1. That the document is genuine price has been paid.
2. That he has legal right or negotiate or transfer it
3. That he has no knowledge which would impair the validity or Exceptions:
worth of the document
4. That he has the right to transfer title to the goods, and the The seller is bound to deliver even if the price has not been paid, if a
same are merchantable or fit for a particular purpose. period of payment has been fixed.
Rules: 1. When the whole of the price has not been paid
2. When a bill of exchange or other negotiable instrument has
1. Place and time of delivery agreed upon. been received as conditional payment, and the condition on
2. If no agreement, place of delivery is determined by usage of which it was received has been broken by reason of the
trade. dishonor of the instrument, insolvency of the buyer or
3. If no agreement or prevalent usage, place of delivery is seller’s otherwise.
place of business.
4. In any other case, place of deliver is seller’s residence. REMEDIES OF UNPAID SELLER
5. In case of specific goods, where it is located, in the absence of
1. Possessory lien over the goods
any agreement or prevalent usage.
2. Right of stoppage in transit after he has parted with the
RULES WHEN QUANTITY IS LESS THAN AGREED UPON possession of the goods and the buyer becomes insolvent
3. Right of resale
1. Buyer may reject the goods delivered
2. Buyer may accept what has been delivered, at the contract rate RIGHT OF UNPAID SELLER TO POSSESSORY LIEN
RULES WHEN GOODS MIXED WITH GOODS OF DIFFERENT May be exercised when:
DESCRIPTION
1. The goods have been sold without any stipulation as to credit.
Buyer may accept the goods which are in accordance with the 2. The goods have been sold on credit, but the term of credit has
contract and reject the rest expired.
3. The buyer becomes insolvent.
RULES WHEN QUANTITY IS MORE THAN AGREED UPON
WHEN SELLER LOSSES POSSESSORY LIEN
1. Buyer may reject all
2. Buyer may accept the goods agreed upon and reject the rest 1. Delivery of the goods to a carrier or bailee for the purpose of
3. Buyer may accept all and must pay for them at the contract transmission to the buyer without reserving ownership or right
rate. of possession.
2. When the buyer lawfully obtains possession of the goods
DELIVERY TO CARRIER 3. By waiver of the lien
Where the seller is authorized or required to send the goods to the Requisites:
buyer, delivery to the carrier is delivery to the buyer.
1. Seller must be unpaid
Exceptions: 2. Buyer must be insolvent
3. Goods must be in transit
1. When a contract intention appears
2. Implied reservation of ownership under pars. 1,2,3 of Art. 1503
4. Seller must either:
a. Actually take possession of the goods sold
b. Give notice of his claim to the carrier or other person in
possession.
5. Seller must surrender the negotiable document of title, if any,
issued by the carrier or bailee.
6. Seller must bear the expenses of delivery of the goods after the
exercise of the right.